USA Today reported earlier this year that teens are not getting a decent financial education.
High school students failed a 2006 quiz from the JumpStart Coalition for Personal Financial Literacy, correctly answering an average of only 52.4% of questions about credit cards, insurance, retirement and savings. This is well below high school students’ average 57.3% score in JumpStart’s 1997 poll, but up from a 50.2% low in 2002.
This latest article applauds states that are beginning to require personal finance classes in the high school curriculum. Is a class on money management appropriate as a requirement? After all, this is a skill necessary to function properly in life. As one becomes an adult, with adult responsibilities, one must know how to correctly balance a checkbook and understand credit card and loan terms.
But does personal finance fit alongside history, literature, foreign language, sciences and mathematics, art, and music, the “staples” of all public high school curricula throughout the United States?
No. And here are some reasons why personal finance classes in high school would be an incredibly inappropriate use of students’ already overbooked time.
Teachers are not trained in personal finance. In most cases, teachers become certified to teach subjects through pedagogical education in college in their particular subject area. History teachers likely studied history education and math teachers studied math education. When was the last time you saw a college offer a bachelors or masters degree in money management or money management education? Economics and accounting won’t qualify.
Not all teachers require pedagogical training. My high school had a wood shop and an auto maintenance department, whose teachers may not have even been to college. But those classes are not listed as a state requirement for students.
Teachers are not parental replacements. Parents don’t generally teach their kids world and American history, literature, physics, and calculus. These are subjects that to teach require textbooks and strong familiarity, perfectly suited for teachers. While there may be some overlap, most parents can’t cover everything. Parents can and should teach life-learning skills like money management, a topic that requires no textbooks and no special training.
Many parents don’t teach these skills. In fact, many do not have the skills to teach. That is not a good enough reason to force high school teachers to take up the slack.
The public high school curriculum is not life training. High schools do not teach students what they need to know in the “real world.” Why should they? The vast majority of students across the country plan on going to college. They need the skills which will help them succeed in higher education. That means these students need research, analytical, and cognitive skills.
This isn’t the case in all school districts, especially at inner city locations. When students are more concerned about survival, housing, and providing food for their family, college is not a primary concern. (See Maslow’s Hierarchy of Needs.) This reveals a major problem with No Child Left Behind’s policy of basing funding on standardized test scores; a system in which inner city schools are doomed to fail. But more on point, students not planning to provide for a family right away rather than going to college need personal financial education right away.
But it still should not be a state-mandated requirement in high school any more than a class on job interview techniques should.
Personal finance classes have bad track records. Interestingly, USA reported in 2006, before the article cited at the top, that personal finance classes in high school do more harm than good:
Nearly 17% of the seniors had taken a money management or personal finance class, down from 20% in 2004. Surprisingly, students who had taken a class actually fared worse than those who did not. Students, however, who had played a stock market game, in which they used play money to pick stocks, fared better than students who had not participated.
It’s possible, as Jeremy noted in a comment on my original post on the 2006 USA Today survey, that this statistic is a result of selection bias. The students who took the money management or personal finance class may have been the students not inclined for higher-level thinking at the high school level — those who weren’t studying geometry, advanced algebra, calculus, or macro-economics.
For example, J.D. from Get Rich Slowly was bored in his required high school personal finance class:
I thought the class was lame. It wasnÃ¢â‚¬â„¢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.
J.D. performed poorly because his intellectual level was above that of the intended audience, and the class couldn’t hold his interest.
There is no room in the curriculum. If you want to add an additional mandatory class to the high school curriculum, you will either have to remove other subjects, give other subjects less time, or extend the school day or year. None of these options are satisfactory. What are you willing to give up?
In this article, the Pittsburgh Public Schools warn they have no room in the high school curriculum for mandatory money management classes. However, they do offer personal finance lessons incorporated in the classes in their “career and technical education” program.
Maybe there’s a better place.
In seventh grade, I was forced to participate in a class called “home economics” for part of the year. We learned life skills such as sewing pillows and making crêpes. Home economics would be the perfect class to spend about two weeks on the basic money management skills needed to get students started on the way towards fiscal maturity.
In the end, it’s the parents’ responsibility, and if that’s not an option, life will eventually “happen” to the students and as they grow up, they will learn from experience. Here are some tips for parents from Golbguru and Liz Pulliam Weston.
For more personal experiences with financial lessons in school and at home, read through the comments on the Get Rich Slowly post I mentioned above.
Updated October 16, 2015 and originally published April 12, 2007. 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.