Why don't we teach personal finance in school?

[lucille]

My son in high school is currently taking consumer math. Our state also made taking a personal finance course mandatory for graduation. They are covering all sorts of things I didn't think they would. They went through all the details of how checking & savings accounts operate, potential pitfalls, fees and how to use one properly. They also went through credit cards in detail, loans, insurance, health insurance, mortgages, taxes, filling out a tax return and student loans.

There are clearly too many parents who don't understand finances. If there weren't we wouldn't have so many people with 32% interest credit cards and the sub prime meltdown. In a way mandatory personal finance classes help assure the nations stability.

[farley2k]

Originally Posted by 72Tiger

Finance is such a personal subject. Not as much as religion, but close, I would think. What version would you want taught in school? What if they taught your kids something you disagreed with?

I can't think of a single thing about finance which is personal. When I went to the site http://www.helpwithmybank.gov/faqs/banking.html and looked at the list I can't find one thing open to personal choice or belief. "ATMs and Electronic Transfers", "Bank Fees", "Funds Availabilty" nothing is personal about facts...they are facts.

[Banker101]

First of all it's called personal finance because you are a person or a group of persons on an account with other persons; as opposed to commercial finance accounts which are about the business not the person or persons on the account. It's not personal finance because it's personal in a secretive way. Banking is anything but sacred, if it were all you sinner's (aka overdrafters, or defaulters) wouldn't be able to start over every seven years when the statute of limitations pass by. I wish god would forgive me without me having to ask him - oh wait he does. But when it comes to banks there is no mercy yet it's personal?? Playing on this fact that banking is just like religion. Well let's just imagine that everyone stopped mentioning god as if he was never known. Well let's just imagine that everyone stopped mentioning credit responsibility and banking. Well what a way to learn about hell, by just not knowing better because nobody ever told you about god so all you did was sin. Heaven would be very lonely. Well what way to learn about credit, by just not knowing any better 'cause no one taugh you differently - oh and wait you're still responsible cause they'll find you later - yet all you did was spend. At least god forgives. Your right credit and banking are just like religion. Only when it comes down to it nobody speaks the word of god, I mean personal finance and credit responsibility. Now is a time for redemption, preach the word of personal finance and accept credit responsibility as your personal savior and you to shall walk down a path of financial enlightenment.

Originally Posted by 72Tiger

Finance is such a personal subject. Not as much as religion, but close, I would think. What version would you want taught in school? What if they taught your kids something you disagreed with?

That said, it would be nice if it could be done - I learned too many financial lessons the hard way.

[Julia_Shoeboxed]

I think we're all in agreement that financial education is the key to managing your finances (or anyone else's) well. The problem with teaching it in schools, is that there are many different philosophies on what is responsible money management.

For example: teaching students to SAVE money, is controversial because others think students should learn to INVEST it

In business school, I learned the latter, which goes against much of what parents teach their children.

Does anyone else think that financial education would become controversial?

Let me know! Cheers.

[Banker101]

Responsibility when it comes to maintaining an account and the importance of not accumulating debt beyond your financial capability to repay as agreed. That is what needs to be taught before a diploma is ever issued. Also the importance of making sure that your cost of living doesn't leave you broke before your next paycheck (ie living within ones means). College students and even those with just a GED or HS diploma are literally accumulating more debt than they can afford to repay as agreed. I wonder why? I think that if your adult child falls under this category, you as a parent should feel a certain level of guilt for not better preparing your child for the real world; as should the school system. To be honest this topic sounds optimum for a good episode of Boston Legal.

And to the topic of Investing, investing should be taught in college and all methods should be laid out on the table. Its complex but it's more scientific than religion, and far less controversial than religion. Although a good amount of investing, if not most of it is based on hope and faith. If your child is old enough to invest, then it's time for you to let go. Your adult child is old enough to make his own decisions. Those decisions based on the skill he learned from you and his education. And again the key is to never invest what you can't afford to lose. But if you as a parent don't agree with certain investment methods then share your concerns.

If your not going to teach your children about personal finance than at least make them study www.helpwithmybank.gov and make 'em volunteer at a homeless shelter. Maybe they'll put the two together and strive for personal excellence - unlike the majority of todays youth who blindly learn lessons via the crash and burn method because they are taught nothing about responsibility and accountability of finance. What a way to learn, it's reverse evolution if you ask me. No wonder history repeats itself. The only thing controversial about education finance is the lack of it's presence in our school systems. The definition between poverty and wealth is widening and eventually their will be no middle class. When that happens we'll see a true depression. Right now is merely a recession. If we want this economy to get better, we have to make it happen. And that isn't going to happen by making personal finance personal when it truly isn't in the first place. I think those that think that finance is a personal subject should get a job in a banking call center so they can truly come to respect that finances are anything but personal.

Originally Posted by Julia_Shoeboxed

I think we're all in agreement that financial education is the key to managing your finances (or anyone else's) well. The problem with teaching it in schools, is that there are many different philosophies on what is responsible money management.

For example: teaching students to SAVE money, is controversial because others think students should learn to INVEST it

In business school, I learned the latter, which goes against much of what parents teach their children.

Does anyone else think that financial education would become controversial?

Let me know! Cheers.

[wildgift]

We got taught a little bit in high school. Just the basics - pay stubs, interest, budgeting, writing checks, insurance. Not much, but, how do you really teach this stuff to high school kids who live at home?!

Banker101 mentioned that they have to define poverty and wealth. That could be a touchy subject when you have diverse schools where some parents are affluent, middle class, and other parents are poor.

A useful course would be "how to stop being impoverished," but, how does one really teach that? Poverty is only partially a personal problem -- sometimes, poverty is "built-in" in situations, like rural communities, or cities undergoing economic decline, or in communities with histories of racism. How will the local businesses treat the school if they teach kids about how to form labor unions?

They could teach finance in college, but, then again, that would leave out 2/3 of the population from fiscal education. Clearly, every adult needs fiscal education, not just those who go to college.

Speaking of college: many kids need education on how to afford an education. I remember teachers telling me that there's financial aid and loans, but, was so afraid of debt that it took a leap of faith to go into debt for college. My personal experience was kind of limited, and it didn't include the idea of masses of working folks making decent money, getting raises, or even earning the median household income.

It turns out that taking a loan for college, and going full-time, makes sense, and it can be proven with some simple spreadsheets. They could have told us this 20 years ago, and more kids would have gone to better colleges instead of wasting their great talents at some community college while they tried to transfer.

Then again... these teachers probably didn't understand that themselves.

[breadandbutter]

In my opinion, I think finance is taught in school but maybe not directly. It may be instilled by the parents and the teachers at home and school like through their allowance etc.

As parents may think.. they don't want to teach there children that money really really matters that you have to study about it. There is much more than money, which I totally agree in. But, I also think of the importance of knowing about these matters but maybe when the children get older. We have had these lessons about finance already in high-school and college.

[vacationofwealth]

We need to learn finance and managing money by professionals in those fields in school. Most of us are at a disadvantage learning about finances from our family and friends who are usually in bad long term financial shape. Our parents and schooling teach about security and safety not about making it happen and becoming independent. We learn to be worker bees in school and in the long run that does not make one sufficient or happy.

[wildgift]

@vacationofwealth: yes! In the past 20 years or so, the fiscal landscape has really changed. We used to have pensions, social security, fewer and more comprehensive insurance choices (and more accessible public health care), free state colleges, the IRA, a savings account, the FDIC, and so forth. Today, due to deregulation, we're faced with myriad choices: the 401k, MSA, different IRAs, educational savings, more tax deductions, crappier insurance at higher prices, rising public education fees, "investing", a weakened social security system, a crumbling public health infrastructure, lots of "derivatives", different kinds of bonds and annuities, and overall, more choice.

I tend to think it's just more opportunities to screw up and lose money. It's also more more risk of becoming a homeless, indigent, old person. But, that's what we've got, and we've got to deal with it. People need fiscal education. They also need some education about the democratic process, and how we're interdependent, and need to get beyond ideological "laissez faire" and "Washington consensus" thinking.

[kickchk]

I was in high school in the early 80's and we did learn how to balance a check book..etc; however they did not teach us that you should live on what you make and not try to live above your means. Add to that the fact that credit cards are bad. :-)