Why don't we teach personal finance in school?

[finaidgirl]

It would be great if kids could learn about personal finance in school, but it would have to be taught very well and made directly applicable to the student's life for it to have any impact on the student. If a teacher had told me about balancing a checkbook, interest rates, and credit when I was in high school, I would have no clue what they were talking about and wouldn't really care. If they talked about how if I saved $50 a month in an account with 5% interest, I could have a lot more money in a few years, I might pay more attention. Or if I took out up to $20,000 in student loans throughout college, I would automatically lose about $200 of my hard earned income for the next fifteen or whatever years while my smarter peers would graduate debt-free and buy houses and new cars without financial difficulty in their early twenties.

Also students should be encouraged to talk to their parents about everything, including money. Teenagers already want to prove their parents wrong about everything, they should be encouraged to challenge their parents spending and saving habits and understand how they manage the family finances and how to do it better.

[The Honest Dollar]

I think this class would be a huge burden on schools. To implement this class correctly, schools would need to hire new teachers or train their current ones in the curriculum. I remember reading a couple of news articles on this exact issue that mentioned school districts who had history teachers or math teachers leading personal finance classes. Some of the teachers were great, but others had no idea what to teach!

I can also say that had this class been offered at my high school, I certainly wouldn't have taken it. This class probably would have been an elective and ineligible for the extra grade points that my school offered for honors, AP, and IB classes. This means it would have hurt my GPA, which, though it doesn't seem to matter that much now, meant the world to me back then.

Luckily, I had a couple of good mentors in college (for example, an older and wiser law student who helped me pick my first credit card and told me how to use it responsibly). But unless schools make this class mandatory for all students and train their teachers to teach the class effectively, I don't think kids will be that much better off.

[n_vizion]

Perhaps they should include it as part of the math curriculum. They teach us how to graph lines (like we'd ever use that information again) but not how to manage our finances in the real world. I do remeber something in school about balancing a check book, but I was not all that interested at the time. I became interested in personal finance after high school when I started having to worry about bills.

So maybe it should be taught in colleges instead as a requirement. It makes more sense because they are being introduced to credit for the first time and are held more accountable for their spending habits then one is during their teenage years.

[windycindy]

Hello, I agree that it is partly a job of a child's parents to teach them money skills, but what if they don't. My family was just middle class when I was growing, up but I was so much younger than my two siblings that I was really spoiled. Then, when I got married, I thought I could still spend like when I was at home. Luckily, my marriage in intact, but it took a lot of effort on both of our parts! I needed to be taught money management before age 30!!!!

[amandajane]

This post got me thinking. I need to teach my almost 10 year old son the value of food. He tends to be quite wasteful but moans if I put less on his plate. I think I'll cook smaller amounts from now on, that might work.

Here's an extract from my blog post today that I thought fitted well with this thread:

Canteen Price List

“This is how it works. We write down the actual cost of the snack food. Each child has a daily ‘junk food’ allowance of $1.00 to buy food for their lunch box, when they get home from school, and so on.

“For example, if I bought 20 packs of chips for $4.99, they are added to the canteen price list as Chips $0.25c per pack. Items such as Roll-Ups are more expensive, around $0.50c each. This way the kids understand the cost of the food they are eating.”

There's more info and some interesting downloads re saving and being frugal here

Simple Savings - Free Stuff

It's where I got this original idea from, I'm sure they won't mind me providing the link :0)

[VaranusK]

Can't agree more. But same applies to self organization, and in general all the subjects you have to learn in places like this, if you are lucky enough to know they exist...

[quitejaded]

Everyone knows debt is bad and saving is good, but there is more to finance than that. What about renting, owning, leasing? What about different accounts, credit cards? What about employment, taxes? What about stocks, investments, realestate, and liquidations? There's more to it than just what you said alifeelemental!

[rorich]

I really agree that they should teach personal finance in school. However, I believe that it can be done as early as the elementary school level, not just starting at high school. I beleive the minute children learn to count, they should begin learning the importance of saving. If emphasis is put on this at at early age, people would probably be more inclined to stay out of debt.

[rcard7878]

Great thread. I teach Personal Finance to 11th and 12th grade students. And I realize I have a unique situation, but here it is. I teach Personal Finance I and II and in order to take the class my students come to class at the school before school starts and the class is voluntary. I have 5 students in one and 4 in another and although some of them were "encouraged" by their parents to come to class I find they have all been very actively participating. I have come up with a semester project and teach the following:

- Saving
- Reducing Debt
- Budgeting
- Money's effect on Relationships
- Credit Reporting
- Real Estate
- Purchasing Large Items (Negotiation)
- Retirement & College Planning
- Investing

It has been wonderful overall and after not taking any type of personal finance class until college (and that was only having a friend of mine tell me I "Had To" take it as an elective) and I hope that by learning these lessons early they can make better choices for the rest of their lives. And just to compare, when is the last time you used the Pythagorean theorem and when is the last time you paid a bill?

[rstlne]

Parents should take more responsibility for the financial education of their children. Really. They have to manage their own money all the time anyway so how hard is it to show their children how to balance a checkbook and make a budget? If we wait for schools to add personal finance to the curriculum, we'll never get anywhere.