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Personal Finance Classes Do More Harm Than Good For Teens

This article was written by in Money Management, Personal Finance. 5 comments.


It’s widely agreed that people are not generally taught about money management as they grow up from children, to adolescents, and to adults. USA Today is looking at a new study from the Jump$tart Coalition for Personal Financial Literacy which tests high school students on basic financial knowledge. Here’s the survey with answers [Microsoft Word document]. That file also contains the percentage of students who answered each of the multiple choice responses to each question.

The obvious response to the poor results is to provide more classes in personal finance (besides encouraging parents to teach their own children). Interestingly, according to the survey, those who took a class in money management and personal finance fared worse than those who did not. However, those who took part ni a stock market simulation game performed better on the survey.

Updated January 16, 2010 and originally published April 6, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar MoneyDummy

That’s fascinating! It makes me wonder exactly what is being taught in the personal finance classes.

Although, there is a theory of cognitive development that says that right before a person has a breakthrough in a certain area, they go through a stage where their knowledge and critical thinking is kind of free-floating and, for lack of a better work, jumbled, and then BAM! It all solidifies and they understand the material much better. Maybe that could be related to the lower scores in students who took personal finance classes?

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avatar Luke Landes ♦127,550 (Platinum)

That’s an interesting idea. I haven’t heard of the theory, but I’m not sure it would apply anyway. The quiz (which was linked to above) didn’t strike me as one that measured cognition or extrapolation of concepts. Not much, anyway. In fact, most of the questions for which a plurality of respondents answered incorrectly (except numbers 9 and 26) test straight memorization of facts.

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avatar Dale G.

I don’t know whether to be surprised or not. Financial success is not directly measured by academic testing. Knowing the facts intellectually and applying them in the real world are two separate things. The later requires the former to at least some extent, but not the other way around. Yet I would have thought that academic preparation would have improved performance on what was an academic test of knowledge.

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avatar Jeremy Bettis

It could be a case of selection bias. I know that in my high school, none of the college bound kids took personal finance, only the ones who needed a required math class and didn’t want to take Geometry. So it could be that taking a personal finance class is an indicator that you are not in the top half of all students.

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avatar Andrew

I dont know if i should take this class, it is offered at my high school as a one semester course but i dont know if it really teaches anything at all

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