The Key to Better Math Education? Explaining Money.

I offer to pay you $200 in one year if you give me $190 today. Good deal or bad deal?

It’s the kind of math problem you might encounter in real life, as opposed to, say, whether the cosecant of a 30-degree angle is 1 or 2. You can imagine students perking up and paying attention when they realize that they need to know algebra to avoid being cheated on a loan.

Math and personal finance make a perfect fit. Students grasp concepts such as exponential growth and regression to the mean much better when they see how those subjects apply to their daily financial lives.

A survey in 2022 funded by the Bill and Melinda Gates Foundation found that 61 percent of parents of students said math education should be “relevant to the real world” but that only 21 percent said it was.

The drive for relevance goes beyond K-12 education. Some of America’s top universities are incorporating personal finance into their curriculums.

Harvard has a personal finance course in the economics department that’s taught by John Campbell, a past president of the American Finance Association. “Traditionally personal finance was regarded as a very sort of hands-on skill that you might teach to people who were going to a technical high school,” he told me. “There is, I would say, a modern movement to reconceive of personal finance as a subject with actually a lot more intellectual content.”

Last year Stanford hired Annamaria Lusardi, an expert in financial literacy, from George Washington University. In October she and other faculty members held a conference on teaching personal finance that included presenters from Dartmouth College, Loyola University in New Orleans, Pennsylvania State University, the University of Pennsylvania’s Wharton School and the Yale School of Management.