Why don't we teach personal finance in school?

lazy23 · 01-01-2008, 01:59 PM

When are we going to mandate personal finance lessons in high school? Many adults don't know basic skills like how to balance a checkbook, how to read a financial statement, or how to take advantage of compound interest.

This sounds like something they might be teaching in home economics, but there's a stigma against guys taking that class so in our school that class is taken mostly by women.

hollyvangogh · 01-01-2008, 02:58 PM

I'm totally with you on this. When my mother went to high school in the 70's all the guys had to take home economics, and all the girls had to take shop. My high school offered cooking, child development, wood shop, and sewing...but not a basic home ec. class or auto shop. We're growing generations of Americans who cannot fix their own cars, cook their own meals, etc. I've heard fellow students say their roommates didn't know how to do laundry when they came to college. It's bad enough that we ship all our factories over seas and have lost the ability to rely only on ourselves for our economny, but Americans don't know how to survive without relying on others (who charge money). How many of us can sew our own clothes, build ourselves a home, change our oil? What happens in a crisis? I'm worried that America has grown weak in a dangerous way. Our children need to know how to balance their checkbook, clean, etc. But they spend all their time texting and such.

Jess · 01-01-2008, 05:46 PM

As a somewhat recent high school graduate, I agree. Although, I'd like to present a few problems with the situation - from what I've seen.

My high school doesn't offer home ec - we had to take a semester of it in middle school in order to move into high school - but we do offer a series of business courses (e.g. management, marketing, business law, etc. as well as personal finance). However, all of these business courses are very easy, and aren't as important (to a high school student) when there are requirements to fulfill and AP classes to enroll in to get to a college of choice. To be honest, the only reason I took Working Citizen (basic personal finance - how to do your taxes, how to balance a checkbook, resume-building, etc.) was because I had a free block one semester and wanted something else to do besides sit in study hall.

I think that these sorts of classes need to be adapted to the next generation and the different kinds of technologies that are popping up. I know of no college student or twentysomething who actually balances a physical checkbook, although our parents impress upon us the importance of doing so. I watch my mom balance her checkbook nightly with her calculator and receipts, which seems awful to me. I use Excel spreadsheets and Yodlee MoneyCenter to keep me balanced. Perhaps emphasizing the ways that personal finance can be easily integrated into our lives is the way to go.

One way to make personal finance more accessible is to make it a mandated class requirement for graduation. I know that causes all sorts of regulatory and curricular problems, but I don't see why it can't be implemented. Today, it's just as important as the requisite health class.

Also, in response to hollyvangogh, I laughed when you said that we spend all of our time texting. (This is very true.) But, again, Mint and other sorts of online money management services offer texting alerts. (I do recognize that Mint, Wesabe, Yodlee, etc. raise some concerns about confidentiality and security, but I'm not going to address them since blogs such as Wise Bread and The Simple Dollar have talked of them already.)

Emily · 01-01-2008, 07:17 PM

I think some of that has to do with the age of the student as well. Balance a checkbook, whoopdedoo. Did you see what that girl was wearing in the hall??!!?? She is SUCH a ho.

It's important to know, but in middle/high school it's like learning Latin: not relevant yet.

Ms.LNV · 01-01-2008, 08:00 PM

While I agree that it might not be the first thing on their minds in high school, I do think that is the right time for it to be taught. When students go off to college that is where they often first accumulate credit card debt and don't realize yet the power of compound interest - both in their favor and against. If we could teach students in high school the value of saving, balancing checkbooks, setting budgets and financial goals, financial responsibility perhaps they'd be more wary about spending and using credit and not accumulate such large debt.

One of my college friends had $18,000 in credit card debt by the time she graduated. I know my grad school friends also had a lot and while things are difficult to pay for as a student, there's a lot to be said for budgeting and setting financial goals.

Joanne · 01-01-2008, 09:15 PM

I never learned anything about personal finance, not from school or my parents. I grew up in the late 70's (I'm 44 now) and I just don't remember it ever being discussed.

My children, who are unschoolers and don't go to school, know more about personal finance now, as kids, than I did when I was 20 years old.

My two youngest (9 & 12) both have bank accounts but they always look for better interest rates at competing banks. They each get paid on the first of the month (the 9 year old gets $25 although she's in the process of negotiating a raise with me and my 12 year old gets $32). Most months they put something in the bank (each month it changes, depending on what's going on) and save it until they want to buy a large ticket item, like the camera my nine year old recently bought. She's now saving for a Nintendo DS.

My youngest is also very interested in the stock market (my husband invests) and started asking questions and taking books out of the library. We decided to give her $500 in her own Ameritrade account and she and my husband watch Mad Money and invest together.

My children are becoming very good at bargain and comparison shopping by shopping with me. They know how to use my debit card and usually swipe it and enter my PIN number when we shop. They spend their own money and do their own transactions with the cashier (with me near them in case they need help). Same in the bank...they talk to the teller, fill out their slips and balance their own account. They also are free to spend their money on whatever they choose.

We openly discuss our finances, assets and budget with our kids and they have a voice in how our money is spent. They will definitely be better prepared to handle their finances than I was. I'm sure they'll make some bad choices but hopefully, they'll learn from them and move foreward.

Jess · 01-01-2008, 09:49 PM

Quote:

Originally Posted by Ms.LNV

While I agree that it might not be the first thing on their minds in high school, I do think that is the right time for it to be taught. When students go off to college that is where they often first accumulate credit card debt and don't realize yet the power of compound interest - both in their favor and against. If we could teach students in high school the value of saving, balancing checkbooks, setting budgets and financial goals, financial responsibility perhaps they'd be more wary about spending and using credit and not accumulate such large debt.

One of my college friends had $18,000 in credit card debt by the time she graduated. I know my grad school friends also had a lot and while things are difficult to pay for as a student, there's a lot to be said for budgeting and setting financial goals.

I definitely know what you mean. I'm lucky enough to know a lot of pf-minded people, who are already thinking of retirement. But one of my friends, who I work with, is almost 25 and doesn't really know what APR means or how to check her credit report. It's kind of scary if you think about it. I think budgeting needs to be simplified. I know I've seen some pretty terrifying ways of budgeting (Pear Budget comes to mind. It looks snazzy and complex, but mostly it's daunting and makes me want to gouge my eyes out.).

alifeelemental · 01-02-2008, 06:57 AM

There's a lot of information passed on to children by their parents and not the schools. Fiscal (ir)responsibility seems to be one of those key areas. It's likely a matter of percentages (which may have changed drastically since I was in school), but most HS students don't really have any income to handle. I'd assume key things taught are :

1. This is how you balance a check book
Borderline obsolescence - It's all electronic in my world now, haven't seen a check register in five years.

2. Credit card debt is bad
There's probably not a person in a CC-driven society who doesn't know this. It's whether they care or not that matter. Try teaching "care," haha.

3. Saving money is good
I feel that I was pretty well-taught as a teenager, regarding money and debt. However, when you're staring at a savings account with $40.16 in it, $.16 of it accounting for accrued interest over the last year, you don't really feel the ROI is worth it. At that age, I'd much rather have enjoyed spending what money I had going to the movies with friends or whatever came up.

Giving a pop-quiz on the credit/debit column of your checkbook seems less effective than a caring parent who explains how things works and provides input/feedback consistently over more than 1 quarter/semester/year of school. Unfortunately, a lot of the parents fall into the "don't care" category, which is a bigger problem that we're prepared to address as a society, let alone a forum, at this point.

jesssala · 01-02-2008, 07:31 AM

My parents' only lesson to me was "we don't have enough money for [fill-in-the-blank]" BUt they NEVER explained WHY. When I first made a little money at my first part-time job, I blew EVERYTHING. I didn't know you were supposed to save. It took me years to learn this (and a very patient and loving husband who knows about finan)ces. Even if the family situation is such that money is very tight (or in my case, my family was and still is outright poor), there still needs to be finance education. We never got allowances or anything like that where we could be taught how to handle money. I'm trying to explain and teach things to my younger siblings but it's hard to undo a lifetime of no money education, not to mention that the youngest one still believes that Mom and Dad are the end-all and be-all and they can do no wrong and they are always right because "they are the parents". Boy will she be disappointed when her eyes open up to reality. (My youngest sister is only 14).

I think they should also make personal finances a required course in colleges and universities. Most schools create their own courses outside of basics as another source of revenue anyway, why not make it useful to the college student?

RyinLA · 01-02-2008, 07:32 AM

Personal finance is perhaps the most important thing we can be teaching children these days. I am about to turn 30 and am just now getting myself on track financially. Like many people, I was foolish about credit cards and savings at a young age, racking up a lot of debt on my college credit cards. It started me out in a hole that i am only now getting out of, and I'm still paying for it in high interest rates while my credit score recovers. I don't blame my family, as they did teach me some basics, but a lot of this should be taught in schools. The fact is, understanding personal finance is probably the #1 skill set that can guarantee you success in this country. We all worry about money, but many of us continue to make foolish mistakes. I regret that i never learned about investing, saving and making the most of my money. I am learning now, but a regular class in school for this would be so much more beneficial to students than electives to burn credits. Imagine the impact on poverty rates and personal debt if we were forced to learn about it from an early age - perhaps our current Home loan disaster would never have happened.

01-01-2008, 08:00 PM	#5
Ms.LNV Junior Member Join Date: Jan 2008 Posts: 1 Reputation: (10)	HS seems like the right time ... While I agree that it might not be the first thing on their minds in high school, I do think that is the right time for it to be taught. When students go off to college that is where they often first accumulate credit card debt and don't realize yet the power of compound interest - both in their favor and against. If we could teach students in high school the value of saving, balancing checkbooks, setting budgets and financial goals, financial responsibility perhaps they'd be more wary about spending and using credit and not accumulate such large debt. One of my college friends had $18,000 in credit card debt by the time she graduated. I know my grad school friends also had a lot and while things are difficult to pay for as a student, there's a lot to be said for budgeting and setting financial goals.

01-02-2008, 07:31 AM	#9
jesssala Junior Member Join Date: Jan 2008 Posts: 1 Reputation: (10)	it's the parents' fault My parents' only lesson to me was "we don't have enough money for [fill-in-the-blank]" BUt they NEVER explained WHY. When I first made a little money at my first part-time job, I blew EVERYTHING. I didn't know you were supposed to save. It took me years to learn this (and a very patient and loving husband who knows about finan)ces. Even if the family situation is such that money is very tight (or in my case, my family was and still is outright poor), there still needs to be finance education. We never got allowances or anything like that where we could be taught how to handle money. I'm trying to explain and teach things to my younger siblings but it's hard to undo a lifetime of no money education, not to mention that the youngest one still believes that Mom and Dad are the end-all and be-all and they can do no wrong and they are always right because "they are the parents". Boy will she be disappointed when her eyes open up to reality. (My youngest sister is only 14). I think they should also make personal finances a required course in colleges and universities. Most schools create their own courses outside of basics as another source of revenue anyway, why not make it useful to the college student?

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01-01-2008, 01:59 PM	#1
lazy23 Member Join Date: Dec 2007 Posts: 40 Reputation: (15)	Why don't we teach personal finance in school? When are we going to mandate personal finance lessons in high school? Many adults don't know basic skills like how to balance a checkbook, how to read a financial statement, or how to take advantage of compound interest. This sounds like something they might be teaching in home economics, but there's a stigma against guys taking that class so in our school that class is taken mostly by women.

01-01-2008, 02:58 PM	#2
hollyvangogh Member Join Date: Dec 2007 Location: Utah Posts: 30 Reputation: (10)	I'm totally with you on this. When my mother went to high school in the 70's all the guys had to take home economics, and all the girls had to take shop. My high school offered cooking, child development, wood shop, and sewing...but not a basic home ec. class or auto shop. We're growing generations of Americans who cannot fix their own cars, cook their own meals, etc. I've heard fellow students say their roommates didn't know how to do laundry when they came to college. It's bad enough that we ship all our factories over seas and have lost the ability to rely only on ourselves for our economny, but Americans don't know how to survive without relying on others (who charge money). How many of us can sew our own clothes, build ourselves a home, change our oil? What happens in a crisis? I'm worried that America has grown weak in a dangerous way. Our children need to know how to balance their checkbook, clean, etc. But they spend all their time texting and such.

01-01-2008, 05:46 PM	#3
Jess Member Join Date: Jan 2008 Location: Rochester, NY Posts: 82 Reputation: (20)	As a somewhat recent high school graduate, I agree. Although, I'd like to present a few problems with the situation - from what I've seen. My high school doesn't offer home ec - we had to take a semester of it in middle school in order to move into high school - but we do offer a series of business courses (e.g. management, marketing, business law, etc. as well as personal finance). However, all of these business courses are very easy, and aren't as important (to a high school student) when there are requirements to fulfill and AP classes to enroll in to get to a college of choice. To be honest, the only reason I took Working Citizen (basic personal finance - how to do your taxes, how to balance a checkbook, resume-building, etc.) was because I had a free block one semester and wanted something else to do besides sit in study hall. I think that these sorts of classes need to be adapted to the next generation and the different kinds of technologies that are popping up. I know of no college student or twentysomething who actually balances a physical checkbook, although our parents impress upon us the importance of doing so. I watch my mom balance her checkbook nightly with her calculator and receipts, which seems awful to me. I use Excel spreadsheets and Yodlee MoneyCenter to keep me balanced. Perhaps emphasizing the ways that personal finance can be easily integrated into our lives is the way to go. One way to make personal finance more accessible is to make it a mandated class requirement for graduation. I know that causes all sorts of regulatory and curricular problems, but I don't see why it can't be implemented. Today, it's just as important as the requisite health class. Also, in response to hollyvangogh, I laughed when you said that we spend all of our time texting. (This is very true.) But, again, Mint and other sorts of online money management services offer texting alerts. (I do recognize that Mint, Wesabe, Yodlee, etc. raise some concerns about confidentiality and security, but I'm not going to address them since blogs such as Wise Bread and The Simple Dollar have talked of them already.)

01-01-2008, 07:17 PM	#4
Emily Junior Member Join Date: Dec 2007 Posts: 29 Reputation: (10)	I think some of that has to do with the age of the student as well. Balance a checkbook, whoopdedoo. Did you see what that girl was wearing in the hall??!!?? She is SUCH a ho. It's important to know, but in middle/high school it's like learning Latin: not relevant yet.

01-01-2008, 09:15 PM	#6
Joanne Senior Member Join Date: Jan 2008 Location: Originally from New York City, now in Florida since 2002. Posts: 131 Reputation: (43)	I never learned anything about personal finance, not from school or my parents. I grew up in the late 70's (I'm 44 now) and I just don't remember it ever being discussed. My children, who are unschoolers and don't go to school, know more about personal finance now, as kids, than I did when I was 20 years old. My two youngest (9 & 12) both have bank accounts but they always look for better interest rates at competing banks. They each get paid on the first of the month (the 9 year old gets $25 although she's in the process of negotiating a raise with me and my 12 year old gets $32). Most months they put something in the bank (each month it changes, depending on what's going on) and save it until they want to buy a large ticket item, like the camera my nine year old recently bought. She's now saving for a Nintendo DS. My youngest is also very interested in the stock market (my husband invests) and started asking questions and taking books out of the library. We decided to give her $500 in her own Ameritrade account and she and my husband watch Mad Money and invest together. My children are becoming very good at bargain and comparison shopping by shopping with me. They know how to use my debit card and usually swipe it and enter my PIN number when we shop. They spend their own money and do their own transactions with the cashier (with me near them in case they need help). Same in the bank...they talk to the teller, fill out their slips and balance their own account. They also are free to spend their money on whatever they choose. We openly discuss our finances, assets and budget with our kids and they have a voice in how our money is spent. They will definitely be better prepared to handle their finances than I was. I'm sure they'll make some bad choices but hopefully, they'll learn from them and move foreward.

01-02-2008, 06:57 AM	#8
alifeelemental Junior Member Join Date: Jan 2008 Posts: 1 Reputation: (10)	There's a lot of information passed on to children by their parents and not the schools. Fiscal (ir)responsibility seems to be one of those key areas. It's likely a matter of percentages (which may have changed drastically since I was in school), but most HS students don't really have any income to handle. I'd assume key things taught are : 1. This is how you balance a check book Borderline obsolescence - It's all electronic in my world now, haven't seen a check register in five years. 2. Credit card debt is bad There's probably not a person in a CC-driven society who doesn't know this. It's whether they care or not that matter. Try teaching "care," haha. 3. Saving money is good I feel that I was pretty well-taught as a teenager, regarding money and debt. However, when you're staring at a savings account with $40.16 in it, $.16 of it accounting for accrued interest over the last year, you don't really feel the ROI is worth it. At that age, I'd much rather have enjoyed spending what money I had going to the movies with friends or whatever came up. Giving a pop-quiz on the credit/debit column of your checkbook seems less effective than a caring parent who explains how things works and provides input/feedback consistently over more than 1 quarter/semester/year of school. Unfortunately, a lot of the parents fall into the "don't care" category, which is a bigger problem that we're prepared to address as a society, let alone a forum, at this point.

01-02-2008, 07:32 AM	#10
RyinLA Junior Member Join Date: Jan 2008 Posts: 3 Reputation: (10)	Personal finance is perhaps the most important thing we can be teaching children these days. I am about to turn 30 and am just now getting myself on track financially. Like many people, I was foolish about credit cards and savings at a young age, racking up a lot of debt on my college credit cards. It started me out in a hole that i am only now getting out of, and I'm still paying for it in high interest rates while my credit score recovers. I don't blame my family, as they did teach me some basics, but a lot of this should be taught in schools. The fact is, understanding personal finance is probably the #1 skill set that can guarantee you success in this country. We all worry about money, but many of us continue to make foolish mistakes. I regret that i never learned about investing, saving and making the most of my money. I am learning now, but a regular class in school for this would be so much more beneficial to students than electives to burn credits. Imagine the impact on poverty rates and personal debt if we were forced to learn about it from an early age - perhaps our current Home loan disaster would never have happened.