Financial Education: Are Schools Doing Enough?

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?

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Bobby
Bobby
13 years ago

Didn’t have the opportunity to take a PF class in high school.

Aaron
Aaron
13 years ago

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.

Jokermage
Jokermage
13 years ago

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.… Read more »

brad
brad
13 years ago

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… Read more »

Adam Ferguson
Adam Ferguson
13 years ago

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… Read more »

Scarfish
Scarfish
13 years ago

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… Read more »

avlor
avlor
13 years ago

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… Read more »

Nathan
Nathan
13 years ago

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… Read more »

KMC
KMC
13 years ago

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… Read more »

Briana
Briana
13 years ago

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… Read more »

Jeremy
Jeremy
13 years ago

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… Read more »

Brett
Brett
13 years ago

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.

jessecoug
jessecoug
13 years ago

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.

db
db
13 years ago

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… Read more »

Dan
Dan
13 years ago

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.

Tim
Tim
13 years ago

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.

Dustin
Dustin
13 years ago

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.

Martin
Martin
13 years ago

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.

Jeremy
Jeremy
13 years ago

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.

Beth
Beth
13 years ago

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… Read more »

John Zeratsky
John Zeratsky
13 years ago

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.

Flexo
Flexo
13 years ago

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… Read more »

DC Portland
DC Portland
13 years ago

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)… Read more »

Fox Cutter
Fox Cutter
13 years ago

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… Read more »

Tinyhands
Tinyhands
13 years ago

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. 🙂

Stacy
Stacy
13 years ago

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.)

brad
brad
13 years ago

Nathan wrote: 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. 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… Read more »

icup
icup
13 years ago

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… Read more »

Stephanie
Stephanie
13 years ago

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… Read more »

Donna
Donna
13 years ago

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… Read more »

noah kagan
noah kagan
13 years ago

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;)

donny
donny
13 years ago

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.

plonkee
plonkee
13 years ago

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).… Read more »

J.D.
J.D.
13 years ago

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 —… Read more »

anonymous..
anonymous..
13 years ago

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..)

plonkee
plonkee
13 years ago

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.

Joe Schmoe
Joe Schmoe
13 years ago

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… Read more »

John Zeratsky
John Zeratsky
13 years ago

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 🙂

Kai Jones
Kai Jones
13 years ago

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… Read more »

Abby Do
Abby Do
13 years ago

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… Read more »

Emily H.
Emily H.
13 years ago

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… Read more »

Russell Heimlich
Russell Heimlich
13 years ago

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.

J Walton
J Walton
13 years ago

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… Read more »

Finance Guide 101
Finance Guide 101
13 years ago

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.

HC
HC
13 years ago

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… Read more »

Jesse
Jesse
13 years ago

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”,

The Editorialiste
The Editorialiste
13 years ago

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… Read more »

db
db
13 years ago

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… Read more »

Sarah
Sarah
13 years ago

I didn’t take a finances class in high school. I don’t know if it was an option. But my parents did prepare me well, both in talking about their budgets and what we could afford (sometimes in terms of what we could give up to be able to buy different things) and I generally budgeted my allowance well as a child — saving up for big things. It helps that I was a natural tightwad. I do think that carried over into being able to manage on not very much money in college and save a great deal at my… Read more »

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