It can be pretty astounding how ignorant many people are of basic principles of sound finance; either that or outright dismissive of its importance in their everyday lives.
I don’t know about you, but in 13 years of grade school education I never heard so much as an utterance from any teacher about anything remotely related to personal finance. College isn’t really any better - we have a slew of “general education” classes everyone is required to take; ostensibly to become a well-rounded and educated individual yet finance is almost never one of the required courses in these lists. Such courses might be available as elective courses but they just don’t seem to be prioritized.
Now I was lucky to have parents who have a pretty good handle on their finances and at least imparted to me some of the very basic wisdoms about things such as the miracles of compound interest, the dangers of debt (and what kind of debt is worse than other kinds and why), how taxes work, etc. Even they didn’t give me a really thorough grounding in all things financial, but I am glad I got at least some of these principles drummed into my head early on. People close to my age are remarkably clueless when it comes to even the most basic financial principles, and many older people I’ve met had to learn their lessons the hard way by making egregious financial mistakes earlier in their lives (and they’re still paying for them). Others still never seem to learn the lesson and continue behaving in ways well into middle age that will guarantee their perpetual poverty, apparently oblivious to the fact.
So that brings me to the question of: why is it this way? Is it a big conspiracy by banks and corporations because they profit from having relatively uneducated consumers? Is it deemed too “socialist” and meddling for schools to attempt to influence the young’s spending and saving habits? Some other reason?
GIVE ME A BREAK! As a teacher, I have to ask, per usual, when during the day this should be taught, why it should be taught by teachers and what would you have us give up teaching in order to fit it in? We teach math, science, language arts, social studies, computer skills, social skills, and physical education. We also do counseling, dental screening, vision screening and vocational training. We have kids for a total of about 5.5 instructional hours during the days when you add up how much time is spent in transit between classes, bathroom breaks, lunch breaks and getting kids in and out of the building. You can make a strong case for incorporating financial education into the curriculum through math or social studies but the fact remains…we have limited time, limited resources and unlimited demands on us. So, what’s your solution to this?
So you’re saying in 13 years (17 if you go for a bachelor’s) of sitting on one’s ass all day every day listening to teachers drone on there’s not enough time to “fit in” the one subject that’s actually going to have an enormous impact on people for the rest of their lives, moreso than everything else combined? I’m not saying history or art or “social studies” aren’t important. But nothing is as important as being able to competently manage your life financially because if you can’t pay your bills, it doesn’t do you much good to know a lot about Picasso.
The first is that there isn’t really room in the schedule to teach a class like this. Schools are already under such pressure to cover what they’ve already got that any extra classes like personal finance mean dropping something else. So what do you drop to make room? English? Science? History? Phys Ed? I suppose you could spend a semester of math to do this, but if it’s not on a standardized test, it’s a tough sell. And economics, which would be another logical choice, isn’t required in all states.
The second is making sure you’ve got qualified teachers and a good curriculum. But hiring teachers costs money, especially when you’re talking about a class that every student would have to take, and virtually every school district is under a severe budget crunch as it is. And good curricula can be difficult to find, especially a curriculum that hasn’t been put together by an entity with something to sell, like a bank or credit-card company, or an author like Suze Orman or Dave Ramsey. Remember, Orman and Ramsey, however good their advice, are still in it to make money by selling books, and I think it’s unlikely that they’d donate their books if they can sell them. And it takes TIME to put a good curriculum together, which many teachers find impractical, especially when they have so many other obligations.
I’m not arguing that a class on personal finance isn’t a good idea; it is. It’s just difficult to fit it in with everything else a school has to do.
I don’t know why schools don’t teach it but I also don’t see why it’s such a hard concept for people to understand how to budget.
Do you really need 2 brand new vehicles and all the toys so that you’re barely scraping by but any surprise bill blows your budget all to hell?
I realize life is expensive and some long term debt is inevitable in most cases but spending what you don’t have or spending what you have right up to the limit without saving anything seems like a lack of sense to me.
Yeah, but these points condense down to “there’s not enough money or time” which leads to the implicit statement “schools boards don’t find this subject important enough to spend the money or time to implement it”. Which is ironic, in its way. If you are asking what to cut to make room for it - I’d say just about anything that is currently being taught in schools is less important and relevant to people’s lives than personal finance.
It’s not that it’s difficult to budget, it’s that most Americans are tantalized by the promise of the good life if only they’d just buy this car or those shoes or these clothes. Their kids want the shiniest toys that all the other kids have, because they’re losers if they don’t have them. If you don’t have the cash to buy this stuff, you have to have a credit card or three or ten, and the credit card companies make it easy to get them. The American Dream can be yours! Just sign on the dotted line!
In fact, if I can run with Rigs’s idea, it would be awesome if schools would be required to spend a year on personal finance and media literacy. Unfortunately, the issues that I and wonder9 raised put the kibosh on it.
Schools aren’t supposed to train you for specific life situations. They’re supposed to give you the skills so that you can handle whatever life throws at you. This subject is being taught, indirectly.
Math covers the mechanics needed: addition, subtraction, percentages. I even learned how to compound interest in 10th grade, though what my math teachers (teaching to the test) failed to communicate was why this was relevant to me. I was 15, I didn’t have the concept that I would ever need to know anything but what interested me right now.
General critical thinking skills are supposed to give you the wherewithal to resist the lure of relentless advertising.
What happened with me is that I had all of the data I needed to manage my personal finances, but I didn’t really bother to until I was over my head with student loans. My issue wasn’t skills, it was immaturity and lack of discipline. That is, I was a normal suburban teenager, somewhat insulated from reality by my parents and community with no incentive to care about these things. I got in over my head in debt, and I’m poor to this day because I just borrowed without paying attention in my early 20s. Not the schools’ fault.
And why not? I would argue that maybe they should, at least when it comes to something that will literally make or break your entire life and that everyone has to deal with.
It’s shame really but it’s also hard to have sympathy for people that run themselves into debt because they refuse to budget.
Case in point, one guy I know was in a fairly massive debt but due to a bit of good luck and generous family he managed to get debt free, back to zero as it were.
2-3 years later he’s in over his head again, never has enough money, makes sure his kids eat but he eats bread and water some weeks. Why? Because as soon as he was debt free he bought him and his wife brand new vehicles (one of which was returned because they couldn’t make payments), big fancy tv/satellite system, and so on.
Another guy I know hooked up with this chick, had a kid, complains she’s spending him out of house and home but this same guy always wants toys like sleds/atv’s, new vehicle as possible.
These aren’t uncommon stories, I’ve come to the conclusion that most people I see around my age (mid 20’s to early 30s) don’t have that much money, but they have that much debt and credit to run up the debt to appear like they have money.
I really do wonder if a year of school teaching about personal finance would really help or if there’s just a lot of people beyond help.
Well, I’m on the pro side for finance classes. The last useful math class I took was in 7th grade, where I learned how to calculate proportions and percentages. I later took algebra, trigonometry, geometry, and calculus (not to mention physics and chemistry) in high school, none of which I remember to this day because I never needed to use them. When I was in school, students were required to have passed Algebra II in order to graduate. I say screw Algebra II and replace it with advanced finance and investing.
My wild-assed guess is that it isn’t considered important enough, and that makes me wonder why, too. It obviously is incredibly important, and there are far too many people who don’t really ever seem to get it. Changing the whole paradigm from buy what you want, when you want it, and to hell with figuring out if you can afford it to save for a rainy day and buy things you can afford seems like a good idea to me, but I can only imagine that the banks and credit card companies would not be on board with it.
The main exposure I had to any sort of financial planning was in a home ec class in 1974, where it was made plain that I needed to feed and clothe my family on the allowance that my husband gave me. And I shouldn’t ask for any extra money if I fell short some month, that was bad planning, but I could take in kids and baby sit them along with my own for extra money.:rolleyes:
I’ve always figured that the education system reflects what society really wants from its citizens. And do you really think American society wants a substantial portion of its population spending within its means and not making foolish financial decisions? Consumer debt is our society’s opiate of choice for its masses. Credit card companies like nothing better than for you to make no more than the minimum payment on your debt. Banks like nothing better than for you to bounce a couple of checks once in a while. The decision makers in our society, or at least their paymasters, like you to be stupid.
We need consumers, we need debtors, and we need an information underclass. We also need schools to be responsive to what taxpayers and voters think kids need - not necessarily what some research study might suggest.
At this point all this is probably more important than turning out well-prepared citizens - not that the people in charge realize it. As MsRobyn correctly pointed out, they’re pretty damn busy keeping up with the mandates constantly presented to them.
I thought most high schools did cover that. I went to a rotten high school, but everyone was required to take economics, and half of that was personal finance stuff.
As with many things in US education, treatment of personal finance varies by location - at my public school in Wisconsin we did a unit on basic banking and household budgeting in middle school, and personal finance was an elective in high school.
I just checked the website for my old high school, and personal finance is still being offered, and starting with last year’s freshmen was made mandatory for graduation. This is the course description:
I do think that this is one of those topics that for a lot of people no amount of required education will prevent stupid choices.
Public high schools are required by law to teach so many years’ worth of certain subjects. These are generally four years of English, three years each of math, science and social studies; two years of phys ed or equivalent; health; and electives. Of these, there are testing requirements for math, reading, writing and science. These are mandatory. You also have to consider that colleges have their own academic requirements for admission, so the only class you can safely drop is an elective, but since many students take electives for the sake of college admission or vocational training, you can expect a fight there, too. Oh, and foreign languages. Can’t forget foreign language.
So let’s assume that you’ve lobbied the state department of education to require personal finance education, and that they’re dropping one semester of elective to add this course. Here’s what else you’re looking at.
You’ve got to hire teachers. Finding teachers that are qualified to teach social studies isn’t that difficult. Finding qualified teachers who are knowledgeable enough to teach personal finance is another story. Even if you just have social studies teachers teaching the course, you still have to hire them, because a one-semester course that all students are required to take will take 3 teachers, assuming five classes at 25 students each, and assuming a graduating class of 400. (Class sizes are mandated, too.) (I’m also assuming that seniors will be taking the class because they’ve gotten their NCLB testing out of the way.) You can get away with two teachers if you split the class up, but you still need more than one teacher. Assume that it costs the district $100,000 per teacher in salary and benefits, because teachers like to get paid. This isn’t really feasible for a district that has Furlough Fridays or is facing layoffs of teachers. In any event, who do you not hire to make room for these teachers? The primary teachers who need to cover the influx of younger kids? The math teacher to replace the one who burned out or retired? The football coach, who is responsible for a significant part of the school’s revenue?
You’ve got to find a curriculum that is balanced. Districts (and teachers) have to be careful about where their curriculum and lesson plans come from to overcome bias. You don’t necessarily want to use Bank of America’s material, but you don’t want to use an anti-industry group’s stuff, either. The district may also have to purchase materials, which means finding the money to do so. This is difficult when some districts don’t have the money to pay for textbooks for courses that are tested on.
You’ve got to find physical space. Two teachers need two classrooms. Some school buildings have the room; others don’t. If not, they’re going to have to get portable classrooms, which also cost money. You can, of course, squeeze these classes in somewhere, but it may not be an optimal learning environment.
You’ve also got to consider the socioeconomic and cultural makeup of the school. A suburban middle-class district isn’t going to have the same needs as an inner-city urban district, nor is it going to be the same as a rural, agrarian district. For that matter, a district comprised of upper-class students is going to have different needs. Teaching poor kids about investments and how 401(k)s work is all very well and good in theory, but the reality is that it’ll probably never be an option for them, while warning them about payday lenders and rent-to-own stores that charge far more than the item is worth would be better. But you may end up alienating some of the only options these people have. (See the myriad of threads about the poverty economy.)
There’s also the problem of teaching the class too early or too late. It’s all well and good to teach kids about mortgages and debt and taxes, but to a kid who has never held a job, those topics are meaningless. Even if the student has a job, he will be exposed to taxes, but that money may already be spoken for because of college savings or the family’s bills. (Believe me, there are a LOT of kids who work because their parents can’t make enough to cover the basics. For these kids, it’s about keeping the lights on or eating, not about having the latest iPod.) Some kids already have fucked-up credit because their parents or someone else “borrowed” the kid’s Social Security number to establish credit, then defaulted. Emphasizing the need for good credit to a kid who will have bad credit for years due to someone else’s actions is useless, too.
Teaching responsibility only goes so far. You’ll have kids who are responsible with their money; they spend some and save some. These are not kids you need to reach. Conversely, the kid whose parents treat their house like an ATM and who pay for everything with plastic has shitty role models, but when the kid thinks it’s OK to do that because his parents do that, well, good luck reaching him. Most people will make financial mistakes, and that’s OK, too.
Finally, while personal finance may be a good idea, it has to compete with other good ideas. Some people think that students need four years of physical education because of the obesity problem. Others think that students should be required to take a fine-arts course. Still others want more science, technology and math taught. All of these are good ideas, and there are arguments to be made in favor of them.
Ultimately, school districts suffer from the same problems the rest of us have: A finite pot of money and a lot of bills to pay. Until the federal government kicks in a little more to cover what it says schools have to teach, personal finance classes will just have to wait.
At the risk of trivializing MsRobyn’s explanation (which is quite good), this is the real reason. If we wanted it, we could have it. I had a home ec course in…7th grade that taught sewing and baking. I had driver’s ed. I had “health.” This is no different, just less traditional in most places.
Given the complexity of the modern world, it would be lovely to have a course on credit cards, bank accounts, bills, renting an apartment, taxes, retirement accounts etc. All the things you’re just supposed to know, but no one except your parents or human resources will ever teach you. It wouldn’t have to be a regular semester course either. In most middle class neighborhoods at least, there seem to be special sessions, optional pre or post school courses, etc (thinking driver’s ed among others). You could get through a hell of a lot in a weekend seminar. Hmm, anyone want a small business idea? Weekend life skills classes for HS students
At my school we learned about healthy eating from grade 1 all the way through freshman health class. Yet I don’t see people around here making healthy food choices most of the time (myself included). We know how to eat healthy, but it doesn’t mean we will.
Just like eating healthy, not going in to debt is not rocket science. Nobody thinks that if they eat a cheese burger they won’t get fat, or if they buy a flatscreen they wont’ have to pay for it. I don’t believe people make bad choices about money out of pure ignorance.
I don’t think budgeting is some huge secret you have to be taught or you’ll never learn. No one ever taught me how to budget and I do just fine. It’s all a matter of what you’re willing to do or not do.
