I read a lot about the lack of financial education in the United States. It’s a popular topic among personal finance bloggers and in media interviews. But I wonder how widespread the problem really is.
At my high school during the mid-eighties, juniors were required to take a semester of personal finance. I thought the class was lame. It wasn’t challenging. I never did any of my homework, and so earned an F on every assignment. But I always received the top score on every test. The teacher wanted to fail me, but his own grading system required that he pass me with a D. (This was the only D I ever received in school — I was a B+ student from junior high through college.)
I often wonder if my poor performance in this class contributed to the money struggles I faced later in life. Maybe I should have paid attention, but how do you motivate a bright high school student to focus on “how to write a check” when he’d rather be passing notes with girls?
I saw a poll recently that showed roughly half of U.S. students take a money management class in school. How many of you took personal finance in high school? What did you learn? Was the class effective? Do you think it helped you learn to work with money? Did your parents give you the skills you needed?
My parents didn’t teach me money skills. My father taught me the entrepreneurial spirit, but his other money habits were irresponsible. What I know about money came from books, and from experience, and from the wisdom of friends.
How can we teach young people to use money wisely? How do you plan to teach your kids?
Didn’t have the opportunity to take a PF class in high school.
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I went to an extremely expensive private high school where probably half of the students had trust funds (I was not one of them) and there was definitely no PF class there. I knew nothing about money until I started working after I graduated from college and started reading PF blogs. It’s a good thing I did, too, or else I’d likely be very far in debt now.
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How many of you took personal finance in high school? What did you learn? Was the class effective? Do you think it helped you learn to work with money?
At my high school, you had the option of taking Personal Finance or Economics. Of the two, Personal Finance was seen as the “cop-out” course for students who couldn’t handle Economics. This meant that I took Economics. So no formal personal finance coursework in high school for me.
However there was optional guidance sessions with some teachers on topics like “How to become a millionaire through retirement plans” that were useful.
Did your parents give you the skills you needed?
HAHAHAHAHAHAHA!
How can we teach young people to use money wisely?
I think Ramit Sethi points out that finances are largely behavioral, which is why good financial education needs to start early and needs to persist until graduation. It’s like training in good habits.
Also, critical thinking skills, which are neglected in US public education, need to be taught. Without critical thinking, it is much harder to tell apart good ideas and bad ideas. Bad ideas lead to bad financial behavior.
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I do think personal finance classes might be more useful to young adults than high school teenagers. Most of the teenagers I know, including the 17-year-old asleep in the next room, have no interest in fiscal responsibility and in fact aim to be fiscally irresponsible as part of their rebellion against their parents and adults in general. My girlfriend’s daughter is pining for the day she can get her own credit card, and her plan is to max it out as quickly as she can. It’s not like she doesn’t know this is stupid; she wants to do it precisely because we don’t want her to. Teens’ vision of themselves as invinceable often extends to money, so taking care of their bodies and their finances is something they might consider “later.” There are exceptions, of course, but in general I think most people aren’t ready to manage their finances responsibly until they’re in their mid 20s.
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Our high school didn’t offer a PF class either. The closest we got was Accounting, so I know how to properly record all the money I blew last weekend.
All of my knowledge and habits came from my mother. Basically, the lesson was ‘don’t do what I did’. She didn’t bother contributing to her 401k when she had 100% matching from her employer fresh out of college. I don’t think she started saving until at least her late 30′s. She also had a thing for new cars, motorcycles and horses when she was my age. While she may have been the coolest 20-something year old at the time, she’s paying for it now.
I’ve taken these lessons to heart. I’m making great strides to save money at a very young age, and I definitely credit my mother’s incessant nagging, and the financial decline of a few key people in my life.
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I don’t remember taking a specific personal finance class in high school, although I know there was a section of it rolled into my home ec class (does anyone else still have those?), including some pretend stock market investing thing. I did take a personal finance class in college, and I thought it was a big waste of time. We spent a lot of time talking about good debt versus bad debt instead of saving, and the teacher got really mad when I raised my hand and asked about attempting to live life without a credit card. He said it simply wasn’t possible and that I should hurry up and get one (really). Our end project was to plan the costs of doing something–building a house, buying a car, planning a wedding, etc. and not one of those options had a debt-free alternative. We HAD to figure payments and interest into our plan. He nearly failed me for saying that if I couldn’t afford the wedding I wanted, I wouldn’t have it rather than go into debt. I ended up “planning” an elopement.
This was the same year that my roommate ran up hundreds in overdraft fees because she didn’t know that when she used her debit card it automatically withdrew money from her bank account–she thought only checks came out of her checking account. Obviously there is a lack of education somewhere. What I learned about money was not from school (luckily in my case), but from my parents.
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I took a simple personal finances class, but it didn’t teach me much beyond looking for a car and a mortgage. I would have liked see in depth info on a budget and what happens if you don’t save for retirement. (Have the kids look at the salaries for the jobs they want in life. Make a budget, go through all the bills for a typical household in that budget range. Have a software simulator take them through things like:
- what happens when your car breaks down
- your property taxes are due
- you just bought an expensive car and house and you find out your and your sig other will be expecting a child. What now?)
They may not want to listen, but some will. That would really help.
Are there community ed classes for personal finances? (I started learning personal finances when I wanted to start saving for a house and a friend recommended a book. There was a class recently through my church. There was one in our town through the local consumer credit counseling group to help people get ready to buy a house. But not done often here.)
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High school juniors/seniors are ready and capable to learn about personal finance. The only reason they are willing to be so “rebelious” and run up credit cards, etc, is because they know someone will bail them out. Most are 18 when they graduate and are ready to learn that they are responsible for their actions…it’s the same way with vehicles. If kids are paying their own insurance, they aren’t going to be speeding around getting tickets driving their own insurance rates up…and if they do, maybe they’ll learn something of value in the process.
Giving kids a free ride simply because they want to rebel isn’t helping them out. Educate first, and if they know it’s wrong and still do it anyway, let them deal with the consequences. Or better yet, persuade them to go the debit card route so they can’t spend what they don’t have if they aren’t working.
For age reference, I graduated college about a year ago, and I have two high school aged sisters. And none of us ran around charging up credit cards (though we had them at 18) for no apparent reason just like we wouldn’t drive around with reckless abandon in our parents cars not worrying about the consequences.
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I, like Scarfish, had the only formal education I ever had on personal finance wrapped into a home-ec type class. The teacher did an admirable job, but with so much other material to cover and the fact that I was a 10th grade boy, it didn’t really stick.
I didn’t learn anything useful that stuck until after college (my wife taught me how to save). By way of illustration, my first week in college, I attempted to write a check on a withdrawal slip and gave it to the book store employee. Kindly, she explained my mistake.
Because of my lack of education on the topic, I fell into every bad behavior you read about – credit cards maxed, student loans without regard to terms, minimum payments, the whole deal.
My wife turned me around. She’d probably say she created a monster!
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My high school had a mandatory ‘career and personal planning’ class in which we covered some PF tasks, like creating a budget. Problem was, unlike real life, we had no constraints on how much we earned in our fantasy world. We were encouraged to invent a job for ourselves, search the classifieds for an apartment and create a budget. Without having any idea what things really cost though, and without having any constraints on which job you had, most people said they made ridiculously high salaries, budgeted way too much for entertainment and housing (and ‘bought’ expensive cars) and didn’t budget enough for groceries and other basic expenses. I’ve never been able to make a budget since, because I never felt like it had any real value (always made-up numbers, never based on actual costs). The turning point for my husband and I was when we started tracking expenses. Suddenly we know where we spend our money and how much things really cost. I think requiring teens to track expenses and then analyze their spending would be more useful than creating a pretend budget. I have also been thinking about my school experiences and the way I spent the money from my first job … some parents required their kids to pay rent once they had a job (which always seemed pointless to us, because it kind of penalized the kid for getting a job). Given that housing is about 30% of your income in our city (very high cost of living) it would be better to insist that a similar amount is set aside for future housing costs, either a down payment or for setting up the first apartment. I know that I racked up CC debt as a young adult because I ‘needed’ the money to set up my first apartment.
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No option for personal finance in high school for me either. The closest thing we had to that was a broad economics course.
And unfortunately my parents didn’t teach me anything about finances, probably because they weren’t the best at personal finance themselves.
The most education I received was by getting a job when I was 15 and working all throughout school. My parents helped me open a passbook savings account at the local bank where I deposited my pay checks.
Aside from that, when they were helping me move into my dorm room in college we stopped at the university credit union to open a new account and apply for a credit card.
It was all down hill from there. Getting a card with a $2,500 limit when you’re 18 and have no job and have never used credit in your life, it was like winning the lotto. My parents never owned a credit card so they had no advice to give me. So I used it and got myself into a lot of trouble over the years.
Schools need to do a better job at teaching the basics. A one semester course on how money works, how credit works, what it takes to get a mortgage, compound interest and saving… just something would be better than nothing. Kids heading to college are bombarded with temptation which leads to trouble when they aren’t educated.
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We didn’t have personal finance classes at my school either. The closest we got was during 6th grade math class. We did a project on how to balance a check book.
I do rememeber during social studies we had a business person from Junior Achievement come talk to us about being a business person.
I agree that personal finance should be taught in schools. I know I would have benefited from it.
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My h.s. had a section on finance in Home Ec (which they renamed Human something or other but it was still sewing and the like). It taught us HOW TO WRITE CHECKS and balance a checkbook. I was very good at this but had no idea about credit or anything involved with different types of accounts, interest, stocks, etc.
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We didn’t have it, but then too I’m old school enough that I don’t think that sort of class BELONGS in a high school setting. I think that’s one of those life skills that belongs at home — and if a parent isn’t willing to do that sort of educating of their child, that parent is modelling irresponsibility and failing as a parent. (If the parent does their best but just isn’t good at it that doesn’t mean I think the parent is a failure. But this is really a parent’s job.)
High school really needs to focus on the foundational basics — reading/writing/literature, history, math, science, economics (where perhaps pf could be incorporated as a teaching unit), etc. and for those on the non-college track there should solid vocational education. I don’t really care if that’s boring to the child–that’s what they need to be learning in school and that’s what we should expect schools to teach effectively. My two cents.
OK, now you know. DB gets ultra crabby about “life skills” training in school. Don’t get me started on sex ed.
db
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I took a “consumer ed” class in HS which rolled finance into other things like living on your own. Most of the stuff I learned in the class was redundant since I had already learned it from my parents, who are the most financially responsible people I know.
My parents never prevented me from owning a credit card, so I got one when I was 18, but I knew that they would never bail me out if I maxed it out.
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I remember taking a budget class in elementary school. We learned about savings and checking accounts. How to write checks and balance a checkbook. Unfortunately, credit cards weren’t de guerre at the time, so that lesson was lost.
I think schools could definitely teach these things. I think that home-ec is something that should be mandatory core class at all levels of school. Basic things like budget, first aid, ironing, etc. Money was one of those taboos to discuss in my parents’ house.
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I had about a week, if that, in one class so about 200 minutes. I thought it was lame and slept through it. You could learn more in one issue of the Wall Street Journal then that class. Ugg. Also if you were on the honors ‘track’ – which I skipped that semester, you did not have to take it at all.
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I think high school is too young. At that age I probably would have shrugged it off. Money is more of an everyday problem in College. You have to pay for more things (mostly beer). I have never taken a personal finance class, and I never even was aware of one being offered at my private HS or Ivy League college.
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I agree with db that this is an issue that should be up to parents to teach at home, but unfortunately most parents today don’t have enough financial knowledge to handle their own issues, so they would simply be handing down bad habits to their kids.
It should start with the parents, but since most parents don’t have any skills the only logical place to try and improve the situation is through school.
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At my kids school – a very small, very unusual progressive (public) school where there are 4-6 kids in each grade/8-10 kids in each classroom and everyone from the preschoolers to the principal is on a first name basis – the 5th/6th grade class spends a nine-week period on “The Money Game”, which is a little bit personal finance and a little bit free-market economics. They start with a certain amount of money at the beginning; they’re given opportunities to invest in interest-bearing accounts, earn as a class, and earn as individuals. There’s a Craft Day about halfway through the Money Game where they are allowed to bring in anything that they made with their own hands and try to sell it at a market, and various other focused lessons throughout the unit. In the end, they’re graded not just on how much they made or lost, but also on a narrative report and on their overall performance, which includes fairplay with others (fiscal responsibility and a certain amount of aggressiveness is rewarded, outright greed is not), work ethic, and ability to recognize and rectify mistakes. The teacher is a retired divorce laywer, so she’s seen a lot of financially screwed up people over the years; she’s a neat lady and I think the class is brilliant. And it’s at just the right time in the kids’ lives – when they’re old enough to be thinking about money of their own but too young to get a formal job. My son’s been through the unit twice – he’s a seventh grader now – and he’s becoming recognized as the kid around town who’s always up for snowshoveling or sweeping a parking lot for a quick buck, and he’s saving up for some expensive engineering kits that he and my husband want to build together.
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I don’t think we had a personal finance class at my high school. At home, my parents taught me the very basics (mainly how to balance a checkbook) but I learned almost everything The Hard Way during college.
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I never had a personal finance/money management class in school, and I’m fine with that. The high school curriculum is all ready overcrowded. What are you going to eliminate to make room? It better not be the arts, foreign languages, history, or humanities. High school is college prep — learning how to learn, learning how to research, learning how to think, learning how to be a citizen of the world. Personal finance is more of a vocational training topic.
If for some reason personal finance must be taught in school rather than at home, where it should be IMHO, it can be included in 6th or 7th grade home economics. That’s where it best fits. Most middle schoolers can understand the basic concepts as well as the intracacies of using a credit card, loans, and interest.
If you get ‘em then, they might even be less inclined (just a hunch) to rebel by doing something they know is stupid when they’re older teenagers like maxing out their credit card and not making payments.
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http://www.daveramsey.com/shop/Financial_Peace_Jr__P112C40.cfm
http://www.daveramsey.com/hope/youth/schools.cfm
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To learn about the state of financial literacy in today’s society I suggest reading “Goodbye to Complacency – Financial Literacy Education in the U.S. 2000-2005″. This in-depth sudy was sponsored by the AARP and was presented to a congressional committee on financial education.
Although this study does not focus only on financial education in schools, it strongly supports the need for financial education throughout our society at all levels; high school, college, workplace, etc.
Of particularly interest to me is the paradox that exists today. There is an over abundance of financial literature and resources available (particularly over the internet) today – more than in the history of mankind. Yet, saving rates are at all-time lows and poor financial behaviors are at all-time highs. How can this be so? The summary of this report hints at an answer – “Some outside force must be necessary to push people to prepare for retirement security at a level that meets their needs. Unlike inert objects, however, people require some inner spark to generate the momentum that can propel them forward. In other words, the “outside force” of available financial education must be met by an “inner desire” to learn and apply financial concepts”. The study further states, “Without a better understanding of how consumers make decisions – and what sparks their desire – efforts that try to help them navigate rapid societal changes are often ineffective. Without a better grounding in the principles of social change, however, it is difficult to identify – and help consumers themselves identify – the sparks that drive their consumption choices and their decisions to save.”
To me, the big news in this study is that financial education is not enough. The psychological aspects of people’s behavior are just as important – if not more important – to address if people are going to become better managers of their financial resources.
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I had a little bit of personal finance as part of a wider class, but it was fairly limited (and the class was for ‘smart’ kids only).
As for my parrents, I didn’t learn much from them. They each had their own issues with money, but I rather not go into them right now.
I did get my credit card paied off this month (yay) then turned about and put another quarter’s worth of education back on the card. I can pay it off next month and by the time next quarter comes around I’ll have enough to pay it out of pocket.
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The only thing I remember about PF from school was a brief “How to write a check” lesson in one of my classes. Could have been middle school.
Everything else I learned from my parents and the School of Hard Knocks.
I don’t have any kids, but I know I would raise them as I was- learning more from me than school. I’m eagerly watching how my 10yr old cousin will grow up with an OVERLY responsible father and an irresponsible mother.
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In my Home Economics class, we had a small module about balancing a checkbook and setting up a basic budget.
In college, as part of my business minor, I was required to take a “personal finance” class. The most worthless class for anyone that has any sort of financial knowledge, and probably a class that needs to be taught more widely (another class used the same textbook, that class was in “family and consumer sciences” (aka, home ec.)
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Nathan wrote:
I think it’s more complicated than that. My girlfriend’s daughter knows we won’t bail her out and yet she has every intention of maxing out her credit card once she gets one. She spends every penny she earns as soon as she gets it and scoffs at our attempts to get her to put money aside for the future. Many teenagers live for the here and now with no thought of consequences, which also explains many of their self-destructive behaviors. Unfortunately for many of these kids, learning the hard way is the only way they’ll learn. Maybe I’m jaded because my stepdaughter is a difficult kid (high school dropout who can’t keep a job and is now working as a prostitute), but most of her friends seem to have the same attitudes about money, and I think they just have to learn from their own (expensive) mistakes.
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Part of the problem is that kids usually *will* be bailed out of trouble by their parents when they make a financial mistake, as someone pointed out above, so there is no real need for them to examine that aspect of their lives.
Maybe one solution is to create a ‘real’ debt situation for them from when they get their first job. Something along the lines of instead of giving them an allowance, once they get their first job, give them ‘credit’, offer them ‘minimum payments’, and also charge ‘rent’ proportional to their wages. The reason I have those things in quotes is because what you are trying to do is get them in a ‘hopeless’ debt situation. Let them rack up a debt with you the parent on paper. Then simply make them pay it back from their job (and secretly put that money into an interest bearing account in their name). At some point, they should realize that they are both never going to be able to pay the debt back AND won’t be able to buy more stuff. Keep this going until their first or second year of college then when they finally learn how hopeless debt is, let them know that it was all fake, their money is in X account and has *earned* x amount of interest, and talk with them about the lesson they ‘hopefully’ learned from all this, including how good it feels to be ‘debt free’ now.
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I suppose I qualify in the “recent graduate” category, having finished high school less than three years ago at this point. I went to a New York State school, and New York has state-wide standards for both public and private schools, so a New York education is basically the same at its core, state-wide.
There was no personal finance class at my school, but there was a spattering of lessons in several other classes, including 8th grade “Home and Careers” (which was much more “Home” than “Careers”), 10th grade Health class, and 12th grade Economics.
It was in 10th grade Health that we had to look up what our starting salary might be and make a budget. Everyone did horrible on the project because it was so confusing, we had no guidance, and were told we could accrue no debt. I had a really hard time figuring out what the starting salary for a “film” career would be – with good reason. The starting salary for a film career is either “unemployment, move in with your parents” or “freelance for next to nothing while you accrue huge credit card debt to try and eat and pay rent.” So I guessed $50,000/year instead, and failed the project anyways because the cost I had to figure for LA apartments is outrageous.
I learned more from observing my parents’ mistakes than I learned from any direct teachings from them. Seeing how their own spending habits kept them living paycheck-to-paycheck no matter what they earned, and how poor choices in the past meant a very, very prohibitive credit score (which affected their children as well, as it meant being denied for student loans). I haven’t done perfectly myself, but I know where certain roads can lead.
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We had to take a Consumer Education course in school where we learned the history of money and buying things with a book about cavemen bartering their goods with each other and then eventually moving into using rocks as money. Luckily our teacher who had to use the book was very funny and we learned more about basic economics and of course filling out a check which I already knew how to do. But it didn’t cover saving vs. spending which I think is more important.
My mom who only went to the 8th grade was an excellent money-manager who lived on a fixed monthly income. I never knew we were poor because I lived in an Applachian area where there were much poorer people than us. But, she never taught me about money because she didn’t think it was important. She grew up during the Depression and believed mostly in the power of self and didn’t really believe in banks.
Personally, I think if attitudes about money in this country are going to change it will have to start in the schools and will have programs that involve the parents. Sure, you can say this kind of education starts at home but to make sure Americans are responsible citizens with CORRECT information it should continue outside the home. I mean how many of us had financial experts at home. Many of my friends parents relied on pensions for retirement and those no longer exist.
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I love the post and the commentary. Great chatting with you last night.
Personally, my step-father was extremely versed in personal finance and has taught me everything I know today.
Talk to you later today;)
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Never had any finance classes classes in high school in NC. The only thing I learned about money was from my dad, was that basically, don’t spend it.
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We covered personal finance a bit as part of “Personal, Social and Health Education” at some point between the ages of 13 and 16.
I know that we didn’t cover investing, credit cards, or insurance. We did mortgages and basic budgeting, but none of us had any idea about the value of money. We didn’t know how to translate money into realistic amounts of food or utilities.
I’m sure that at the time I thought it was useless as I was a long way from controlling a budget of my own (2 years was like, forever when I was 16). I still don’t think it was very helpful, but I probably absorbed a bit of stuff.
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I think it’s interesting that so many of us were taught how to balance a checkbook, as if that’s somehow an essential skill. Balancing a checkbook is basic arithmetic. It has nothing to do with presonal finance. I wish I had been taught about smart consumerism, about the power of compound interest (I can’t recall being taught that at all), and about the life-long burden of debt that can come from dumb choices.
You know how in Driver’s Ed they show you those shock films of mangled cars and mangled bodies? They need to show something similar about money — Maxed Out, maybe? — to scare kids. It might not work for most kids, but some will get the picture.
Another commenter made an excellent point: the real problem is that teenagers have no concept of time. They live in the now. I can’t blame them really, but it’s too bad there’s not a way to impart an ability to plan for the future.
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the closest thing i had to financial education in high school was bookkeeping
that class basically taught me how to write a check.. create a budget (assets, liabilities, etc..)
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JD, I’ve never been shown how to balance a cheque book. In fact until I started hanging out online at personal finance blogs / sites, I’d never heard of anyone balancing a checkbook. I’m actually not sure what it means.
I wish I’d been taught about investing. I think I picked up a lot of stuff at home about avoiding unnecessary debt but no one explained what funds or bonds were so when I had to pick my pension (retirement) savings funds in my first job, I didn’t have a clue.
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I took a “General Business” class in high school. One semester an remember everything. First lesson, how to correctly write a check. Second lesson, how to write a check for an amount less an dollar. (10 years ago, but seriously, I wrote probably 30 different checks for under a dollar as homework for that classm but never in my life have I written a real check for under a dollar). Lesson 3 lasted for about a month, how to reconcile a bank statement. Took about 10 minutes to explain, then a month of example repitition to get the hang of it.
At that point the “teacher” was out of topics, but she taught DUI school as a part time job, so we spent the rest of the semester going through DUI school material. Which actually is much more relavent to ANYONE’s life than learning how to write a check for 47 cents.
I think my mother did an awesome job of teaching me personal finance, she gave me the biggest allowance out of all my friends starting at age 12 or so. $100/month, but my allowance covered everything I wanted, including clothes. Trying to keep up fashion in high school meant I didn’t have much left over to blow on other trivial stuff, and I had to get a job that I walked to, in order to save up for a car.
I was totally flipping out, when I found out I was going to get 100 bucks every single month, till I figured out that it doesn’t go very far after taking care of the essentials.
So when I got my fat $2000 scholarship checks each semester to cover room and board, it seemed like all the money in the world, but I had learned early on that its never as much as it seems. I think this lesson kept me out of credit card debt in college, and when I finally got my first job after college, I knew to not get too excited about a new lifestyle despite seeing my income getting 10x bigger. I still live pretty frugally, very slowly raising my cost of living, and I still have a great time. I’ve never been in debt, and I believe I owe that to my allowance I got when I was 12. Thanks Mom!
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Great point, J.D. (in comment #35).
Personally, I learned more from reading “The Boglehead’s Guide to Investing” (which is more of a personal finance book than an investing book) than from anything else.
Come to think of it, I took a personal finance class in college. That I didn’t think of it earlier goes to show just how much I learned there
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I grew up in the 60s with an itinerant, welfare mother who occasionally dumped us with relatives for periods from a week to a summer. Some days we didn’t eat; some weeks we lived with one of the middle-class relatives. Mostly what I learned from that was that it would never happen to me again, or my kids when I had them. My dad wasn’t around: paid his child support every month, and we saw him once every couple of years for a week or so.
In public high school in the late 70s I took a mandatory consumer/life skills class, which included understanding mortgages, credit card and other loans; retirement planning and saving; household budgeting (food, clothing, vacations, etc.); and balancing a checkbook. I was also an avid reader of almost anything and picked up a lot from general magazine articles on budgeting and financial stuff. (I also learned to shoot at that high school, which had a range under the stage in the auditorium and offered shooting as a PE elective.)
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I never had a PF class in high school…but boy, I wish I did! My father, the money maker in the family passed away 2 weeks after I graduated from college. My mother, who never worked a day in her life, was given an allowance by my father for food, clothing etc….for us kids which she tucked in different envelopes to save….interesting way to budget, but not my style. Discussing money and finances in my family was taboo, and I grew up that way to not ask and don’t tell. So basically, I was thrown into the real world on my own with no one there to teach me the ropes. And of course, growing up in the mid 80′s didnt give me the luxury of looking up this stuff online. With so much information out there on the internet, people should be ashamed of themselves for getting into so much debt and not understanding where, or how to use the information provided for free to them.
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[...] never had the opportunity to take any personal finance classes in high school. They simply were not offered. It would have been great to have a class back then that taught me [...]
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I didn’t take a personal finance class in high school–I believe that one was offered, but I wasn’t particularly interested and it didn’t fit with my schedule.
When I was in college, I actually had to call home and ask for instructions on how to write a check.
But I’ve had, and maintained, pretty good financial habits; a lot of money management isn’t about what you know but what you do. I never had any sort of expectation that I should be able to eat out, or pay money for entertainment, and because my expectations about what I “deserved” were low, I didn’t get in over my head.
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I took no personal finance classes in high school (1999-2003). I learned everything I know about money through my father. I remember in elementary school my Dad made up my own checks which I used to withdraw chore money. It was pretty hard to wrap my head around the idea of getting money from a piece of paper, but this experience has definitely got me to where I am today.
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Unfortunately a class in personal finance was not offered at my high school and was none existent in college – even though credit card companies were plentiful on campus. I am a STRONG believer in teaching kids about personal finance as soon as possible – when they begin to ask for the latest (fad, trendy item). Keep it age appropriate because that’s what the advertisers do.
My 10 year old cousin has been very frugal since she began to learn about money, unlike her older siblings. She diligently saves the money she receives for bigger ticket items. How did she learn – She and I would play money games where she began to learn money concepts.
When I have children, I plan on doing the same and have them prepared for fiscal responsibility before they leave my house. If my husband & I don’t teach them then life will…and life does not love them like we will.
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Well life is my class of learning about personal finance.
But yes everyone is absolutely correct about educating kids about personal finance from school, which will make their life perfect and well planned.
Daniel.
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The issues with teaching personal finance in school are as follows:
1) If the students don’t have basic numeracy, then it doesn’t matter whether PF is taught as a standalone class, within another class, or not at all. The concepts won’t make sense.
2) There will invariably be conflicts with other course needs and with parents who believe that this is strictly the family purview.
3) There is an ongoing debate as to what the value of a high school degree really is.
I personally believe that graduating high school means that a student should be prepared to be a *citizen.* And that means, among many other things, achieving a basic understanding of government systems. Corollary: If a student doesn’t understand how to manage their own personal financial life, that student certainly cannot understand the often esoteric choices made by the government on the country’s financial behalf.
As such, I believe that personal finance should be integrated into education from at least middle school onward, even given parental pressures and competing academic needs. Whether as a standalone class, or as units in math and social studies/economics classes, I’ll leave to the respective districts. But I do think pie-in-the-sky career picking projects don’t help. Grounded real life examples, such as “setting a budget for clothes, gas, and school supplies on a retail worker’s salary” would work better. Then expanding to saving (including college and retirement), credit card use, and finally rent and mortgage considerations (near the end of senior year, when independent housing looms as a real issue).
Also, icup, your idea is intriguing, but if my parents had done that to me, I would have found it an unforgivable betrayal. Lying to one’s kids to prove a point rarely strikes me as an ideal parenting strategy.
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I never even considered taking the class, if it was even available. It would be good to some extent, but I would be worried about the teachers teaching wrong things to my kids, such as getting a credit card so you can start “building up credit”,
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I grew up in a suburb of Philadelphia, and I was never once taught a single thing about finance from my public high school or any other place outside the home.
If my parents hadn’t taught me the basics – and made me get my own savings account while avoiding to give me any money – I’d be in serious debt.
In my house, all forms of currency had to be repaid (and written for all to see in the meantime). “Free money” never happened – it definitely instilled a sense of “if I want it, I need to make it happen.”
I really wish personal finance was a required course in college, though. Sure, a savings account isn’t that complicated (glorified piggy bank), but what about credit cards, student loans, writing checks, money orders, credit reports, taxes and so on?
You grow up real fast when you move out of a dorm.
So a class – and not just optional “free information sessions” – would definitely have been useful. Not everyone has a person to ask or is fortunate enough to stumble across this blog.
Cheers,
The Editorialiste.
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I’m going to sound in with one more thought here. In the pf blogosphere, you see a lot of comments about taking personal responsibility for ones’ finances. Harsh, but valid.
It’s equally harsh, but valid to say that we expect that a parent is expected to be responsible enough so as to teach their children how to manage money. Failure to do so is a failure as a parent. Parent, take some personal responsibility here.
How much do we really expect to be able to excuse parents from doing? Schools should NOT be a surrogate parent. To the extent they are allowed to be, perhaps the fault is a collective failure by all of us for not having higher expectations of ourselves and each other.
The only logical outcome I can see from putting the burden of this on schools is increasing indoctrination. We get more and more of that rather than strong thinkers the more we excuse parents from their responsibility to be parents.
db
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