People have eluded to it in other threads, I have brought it up in conversations on the boards and in “real life”, and it is a problem affecting millions of people across the nation and around the globe I would imagine.
With the recent national attention being brought to subprime lending and the whole subprime market, people are getting a window side glimpse of what I would consider a crisis for many young adults coming of age in this fast paced world. People in their late 20’s and early 30’s are wondering, “Why didn’t anyone tell me how much my credit score would affect my whole life??”. It is a social epidemic that some people say is a controlable situation, I say people growing up in this day and age are underinformed about the role their credit scores will play in their lives.
Young people who want to buy a home are finding out it is not all it was cracked up to be. They are forced to pay PMI because they cannot afford to put the entire 20% down, they aren’t told or do not understand the fixed rate verse adjustable rate loans, and they continue to get boned by their credit score ad infinitum.
The real problem in my opinion is knowledge of credit scores and how they impact your life as you go through the maze of growing up. I do not remember a class in high school where they taught me how to balence a check book, or how to live with a workable budget, or what a credit score was etc…etc… I graduated Highschool in 88’. Maybe times have changed.
Are some people lazy or uncaring of their bills and when they should be paid? Yes, of course, but what percentage of those people never found out how to manage a budget or bother to learn about credit and credit scores. If I could go back, I’d have learned early on just how much a credit score would affect my life and I would have heeded the information.
What do others think of this? Should personal finance management be taught at a younger age? Should it be mandatory like Sex ed?
Yes, I’ve been thinking about teaching a night course in that very subject. However, I have no teaching credentials only life experience which they won’t consider.
I do think it should be a mandatory class for everyone in, let’s say Grade 10 and up. Especially given the promotion of various different kinds of credit and the huge personal debt that North Americans are carrying.
There will still be people who don’t care enough about personal finances to worry about it. But at least that’s a choice.
I’ve said this before… this lind of stuff is what they should be teaching in “Home Economics”, instead of using that name for a cooking and sewing class restricted to girls.
Certainly cooking and sewing could be part of that class (though I might have separate classes ffor them); but Home Economics should include all the parts of operating a household: budgeting; personal finance, including debt, credit cards, borrowing, credit scoring and its effects, and bankruptcy; home maintenance, utilities, dealing with neighbours, renting versus buying versus co-ops, and priobably a lot of other stuff I haven’t thought about.
There should be a ‘life skills’ course that covers personal finance, issues like how to avoid scams and bad deals, shopping skills, how to research consumer information, explanations of how various taxes work, how the school system is set up, basic legal requirements for various life options (buying a house, getting married, etc), and other things that are helpful when starting out on your own in life.
Emphatically yes. Even if it was only a couple of class periods to teach kids how credit cards really work. Too many people don’t understand about interest and minimum payments, and just cannot fathom how they end up paying back $Hojillion on an initial balance of $Thousand when they were making the “recommended” payment the whole time.
I graduated high school in 1998. We all had to take one semester of economics, which included standard stuff like supply and demand, but also lessons about playing the stock market, mutual funds, insurance, and retirement savings.
Yes, most definitely. While in high school, I thought this, and I still do.
I think there should be classes on most of Sam Stone’s , as well as home buying and real estate.
Sam Stone and Sunspace have covered a lot of the material I think it’s incredibly sad that youngsters aren’t taught in school. It might save a few of 'em some serious pain later down the road.
If not a formal course - it should be worked into other coursework.
Its appropriate to teach money math during math class, for instance. Economics should come up in social studies. Taxes should be covered in Civics. Stock market games are great to play in a discussion of the Depression during History class. During English class a good research project and paper could be “buying a new car” - with a middle class budget - including researching price and features. Home Ec should include grocery shopping and budgeting.
But I’d go for a formal course, too. In fact, I’d like to see both.
Do they still have girls-only home economics classes? I graduated from high school in Connecticut in 1984 and everybody took home economics and the woodworking class.
As for the question, yes, I think everyone should learn personal financial management, but then again there are other things people ought to learn but don’t. Like critical thinking, civics, etiquette, etc. There isn’t enough time in the day to teach everything that ought to be taught.
It was mandatory in my high school, some 15 years ago.
It was actually called “Life Skills”. It was the second semester of required Home Ec. The first semester was basic cooking and sewing (of the how to do button repairs and basic hemming variety mostly), as well as basic household budgeting and the second semester was essentially basic personal finance managing - how to write a check, balance a checkbook, calculate interest, basics of compound interest, credit card usage, how to check your credit (and fix any errors/blemishes), basic investment terms and strategies, etc. It was more a general survey of the area, but it was enough to give you at least a basic working knowledge.
You mean this isn’t standard in most schools? Really?
Leases and co-signing leases
How to file in Small Claims Court
When do you need a lawyer and how to find one
The court system as viewed from the bottom: bails, bail bondsmen, jury duty
Student loans
Military service: your options & the pluses and minuses
Insurance: Health, Auto, Home, etc.
Along with about 16 other things, sure.
Our kids are lacking in geography, science, critical thinking, poly sci, science, math, logic, and science - so after we get them to the point that creationism is giving the respect it deserves I’m all in favor of teaching them how to handle their personal finances.
How are we going to fund it? Cut the arts and girls sports, I’d guess.
Seriously, I knew exactly what I was doing to my credit and had a faint idea of what it was going to do to my future, but you know what? I was 18. I wasn’t planning on living to 40 since the booze and mountain racing was going to kill me off long before that, I sure as hell wasn’t going to get married and have a couple of kids, so what did I care?
It’s like sex ed. We all knew what VD’s were and how they were transmitted, but I never did know a dude that would turn down sex because he didn’t have protection.
You can lead a teenager to financial education, but you can’t make him save.
More life skills to add to the class:
Cost of car loans.
How leasing a car works.
The real cost of a car (buying, insuring, repairs and mantainence)
How 401Ks work, and what they can do for you.
Credit cards - What the Wii will really cost you, when you pay it off over 3 years at 18% interest.
The basics of health care insurance (I still need this one)
How to read a companies financial sheets. (The basics, aimed at investors)
Yes it should be, but I don’t think it will happen.
Schools are going to bristle at adding more mandatory classes because it will fuck up scheduling. Parents will be pissed off if Johnny can’t take that extra AP course or Speech and Debate because he has to take personal finance. Parents and teachers would moan if time were added onto the school day to accomodate it. Administrators will find themselves struggling to even find qualified teachers for it. Some districts will complain that graduation exams are hard enough without adding one more subject.
I’ve perused it in the bookstore. I was already doing many of the tips in the book… basically, automatic savings plans plus compound interest = lots of savings when you are older. A simple and effective truth which only requires 1 page to convey (much like Scott Adam’s plan)… the rest of the book is basically filler.
I’ve also read the Rich Dad stuff… which I think is bunk. Lots of “rah rah” cheering for taking bigger risks in investing, without adequate coverage of the downsides of taking on too much risk.