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Should High Schools Require Money Management Classes?

This article was written by in Best Of, Personal Finance. 55 comments.


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 wasn’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 August 9, 2011 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.

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About the author

Luke Landes, also known as Flexo, 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 him and follow Luke Landes on Twitter. View all articles by .

{ 55 comments… read them below or add one }

avatar HC

I strongly disagree with your third point. 85 percent of people over the age of 25 have a high school degree in this country; *28* percent have a college degree.

Maybe a bunch of students “plan” on graduating college (and I suspect the ratio will increase over time), but for a long time to come, many students will NOT be completing, or even attending, college.

I don’t understand this bias against personal finance in school instruction, when so much of it is basic numeracy. Should we not be teaching our kids math?

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avatar Hazzard

I think it’s almost a moral obligation to teach basic life skills such as money management in K-12. Money factors in to almost every aspect of our lives either directly or indirectly. We have all seen the kinds of messes people can end up in if they don’t have a basic understanding of the rules. I can understand that there are lots of subjects competing for our children’s attention in schools but certainly learning how to live a life within your means has to fit somewhere in there. I don’t think we should expect that college will cover this. A high percentage of people don’t go to college and even the ones that do don’t necessarily get very much exposure to personal finance basics.

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avatar Hamburger Flipper

What good are financial literacy and money management education if you have no money to manage?

If I had had such a class – and my high school had nothing even remotely related – I probably would have been told that going to college was a good “investment” which in my case was the worst financial decision I could have made.

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avatar Luke Landes ♦127,386 (Platinum)

HC: If it’s basic numeracy, then a mandatory class isn’t needed because mathematics is already a requirement.

Hazzard: I don’t see schools as being *morally* obligated to do anything (morals relate to teaching within a family), but like I said above, basic money management an be covered in 2 weeks in middle school… Don’t waste high school students’ time with something so basic.

Flipper: I’ve tried emailing you, because Id like to hear your story, but your email address bounces. I don’t think your experiences are indicative of most others’.

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avatar MT

That is a hard sell.

Most people need an unbiased explanation/education on the true costs of debt since this seems to be our nation’s biggest problem.

I don’t think I would have processed and retained this information well in high school because it was not relevant to me at the time.

Some people insist on learning things the hard way. I think lots of PF bloggers can attest to this, myself included.

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avatar Robin

Responsibility may not lie with the school, and I agree that public schools are likely ill-equipped, but I too would have liked to have gotten more out of home ec class than a piece of sewn burlap and some tasty treats. Budgeting for a home is no easy task, and it is strange to me that I left highschool about to tell anyone who cared a bunch of facts about historical battles but not to understand the basic principles of budgeting and of investing.

I’m not the world’s dimmest blub, certainly, but I still have very little understanding of the stock market. I always look around me and wonder how everyone else seems to have it so figured out. And Fidelity had to spend a full hour on the phone explaining asset allocation to me just a month ago so I could choose from among their hundreds of funds and investment options.

I suppose I’m confessing that despite my best efforts, I’m still financially retarded. I happen to have made some good investment decisions (i.e. real estate) mostly by happenstance, not as part of any grand plan. And I’ve had tons of schooling. The worst part is that it can be a huge challenge to find unbiased financial information and advice because so many are eihter trying to sell you something or can’t give you the advice you really need.

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avatar Robin

well, can’t legally give you the advice you really need, is what I meant to say.

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avatar KMC

I think Flexo’s points are spot on. A couple of additional comments, though. The idea that PF should be taught by parents is a nice idea, but what if the parent is just passing on really bad information? Look at how bad people manage money now and ask yourself, are those people qualified to teach someone else? Clearly not. Many (maybe even most) parents simply aren’t equipped to teach PF to their kids.
I had a class very similar to Flexo’s home ec class. We went over some basics – how to write a check and balance a checkbook kind of stuff. I’m sure the teach would have liked to cover more. Teachers want to cover more of everything, but like Flexo says, they’re too pressed for time as it is.

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avatar Luke Landes ♦127,386 (Platinum)

Thanks, KMC! Just to be clear: Assuming the classes *help* the students who take them, I don’t think money management classes in high school *wouldn’t* be helpful to some, and if the appropriate staffing is there, it would be a nice elective for students who want to take it, or for students whose parents force them to take it… but don’t include personal finance in the list of necessary classes required for graduation. Schools don’t have an obligation to teach students these skills.

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avatar HC

Mathematics is already a requirement, but a recent survey indicated that most high school teachers want to spend more time on “abstract” conceptual math skills, and college professors think they’re subsquently getting students who lack the basic computational skills.

I think it is perfectly reasonable to include personal finance examples throughout the curriculum, including math and economics classes. I think it is perfectly reasonable to offer a short finance skills program after school, if normal instructional time is taken up with other classes (plenty of schools require extensive outside volunteer work or capstone research projects, and nobody complains). I don’t think it is reasonable to say “the lessons of personal finance have no interaction on any other academic subject, so let’s make no effort to put it in schools at all.”

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avatar HC

“nobody complains.”

Well, plenty of people complain, but the majority of parents in those school districts accept that schools are in the business of preparing students to be adults and CITIZENS, not just giving them one more credential on the ladder.

I consider the understanding of money management as crucial in becoming a contributing member of society, and so I think the standard for those classes (along with civics and public health) should be “opt-out via parental request”, rather than the reverse.

I hope I’ve clarified my position.

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avatar PaulD

As the father of a high school student I can observe that there is no extra room in my daughter’s schedule to add a course of personal finance. Already, she is cannot take all the courses she would like to take because they do not fit into her schedule.
So while a course in personal finance might be nice, it would require her to drop either an elective she enjoys (e.g. orchestra) or an academically rigorous class (e.g. advanced placement statistics, AP economics, etc)
Moreover, a course in personal finance would have to compete against all the other courses pushed by particular groups (with good reasons)to include in the list of mandatory courses (e.g. physical education, health, drivers education, more foreign language, more math, more english, etc)

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avatar plonkee

Why would high school be the best option? Thats for 14 to 18 year olds right?

I was thinking that maybe having it earlier in school life (in a kind of little and often way) might be better. Anything related to money management that we did at school came in a subject called “Personal, Social and Health Education” where we also did some stuff on nutrition, relationships, bullying, first aid, etc. This class was about an hour a week for 3 years (it did cover a massive bunch of stuff).

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avatar LTD

Much to my dismay, I completely disagree with Flexo’s commentary. I think the topic of Personal Finance should be taught as a school subject or series of seminars (e.g. like sexual education). My argument is based on the idea that the course syllabus should not be about how to make money or not make money, but about elements affecting personal finance such as:

•What is a budget?
•What is debt?
•How to file a basic tax form
•What, why, and how are the various deductions taken out of income (e.g. Social Security, Federal Taxes, State Taxes)
•What are property taxes?
•What is life insurance? Medical Insurance?
•What is a secured versus non-secured loan? How much does it cost to pay back a loan?
•What is a bank? What are checks? What is a debit card versus a credit card?
•How are interest rates calculated on credit cards, bank statements, and mortgages?
•What is a credit report and score

These topics absolutely can be taught by a teacher, as with any subject, given the proper training. The course should not be meant to replace professional advice related to tax, investment, estate management, or insurance coverage strategies. It should simply provide understanding of the terminology & mechanics of basic financial topics – the financial ABC’s, if you will.

Flexo commented that Personal Finance should be taught at home, by parents. Unfortunately, financial ignorance can be passed down from generation to generation widening the socio-economic gap between the financially savvy family trees. Personal finance education in high school helps level the playing field by ensuring every adult enters into our economic society knowing the rules of the game. The benefit would be to help mitigate the number of people victimized by predatory lenders, potentially reduce incidents of bankruptcy declarations, and avoid other personal financial disasters that ultimately impact the taxpayer or consumer.

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avatar jane

In addition to the failing grade that high school students receive on the JumpStart Coalition personal finance quiz (which is truly basic knowledge), I would like to add the following:
**our national personal savings rate is NEGATIVE 2%. We are borrowing money just to get by.
**despite the new bankruptcy law designed to make filing less attractive and more difficult, the rate of filings in 2007 has already reached four times the rate of 2006. It is projected that 1 million people will file this year.
**39% of college students graduating with debt have payment equal to more than 8% of their income

It is pretty apparent that parents are not adequately educating their children in money matters. This is a problem, and it belongs to every one of us, for who bears the burden of bankruptcy and social welfare?….you and I.

You must also define “money management.” If you are talking about a basic skills set, such as balancing a checkbook and writing checks, that CAN be taught in a couple of weeks. However, those skills have no bearing on the actual management of money. Students need to be taught financial strategies, and would benefit from classes that provide simulated experiences in which they practice decision making in areas such as:
*Buying vs. renting housing.
*Stocks vs. bonds vs. mutual funds?
*Investment strategies for different life stages.
*Credit management.
*Consumer fraud and protection.
*Income taxes
*Retirement planning.
The list goes on. And, in the process of learning something that actually applies to the life they will lead, they gain math and analytical thinking skills.

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avatar Ben

Is this a devil’s advocate post :) I agree with plonkee, financial concepts should be taught in school beginning sooner than high school. I think that a class about money would probably teach the most valuable thing a student could learn in school.

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avatar Luke Landes ♦127,386 (Platinum)

I have no problem with schools offering a class, if studies prove that they are effective. However, states should not mandate that the class be required for graduation, as it is an additional burden on the students (with limited time for additional required classes) and the schools (funding for teacher training, staffing, etc.).

The issue isn’t whether schools should *offer* the class, it’s whether a class should be *required* for graduation.

Plonkee: High school *isn’t* the best option in my opinion, but that’s the grade level that some states are requiring or considering requiring the class.

LTD: Your syllabus sounds pretty good for a high school level class. Offering the class could be a good idea, but not making it a requirement.

Ignorance is often passed down from generation to generation by parents in more areas than just finance. There is no “anti-racism” class mandated by states, but literature and history often must include multicultural backgrounds.

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avatar Joseph Sangl

I appreciate your addressing this subject!

Wow! I believe that schools SHOULD BE MANDATED to teach personal financial management in high school.

An excuse of “there is no room in the curriculum” is unacceptable! Cut out the anthropology, biology, or some other class to enable them to learn about personal finances!

Not everyone will have to remember their anthropology class, but EVERYONE will have to deal with their own personal finances. Bankruptcies and paycheck-to-paycheck living are an EPIDEMIC in America!

However, this is no way minimizes the role of parents in teaching their children about financial management! The school and parents should be partnered together to prepare the student for an excellent education and an ability to be self-sufficient and win financially.

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avatar Luke Landes ♦127,386 (Platinum)

Anthropology isn’t a required class in high school. Neither is biology specifically, but in New Jersey, at least back when I went to high school, three years of science was required, whether it included Physical Science, Biology, Chemistry, or Physics.

I think as people interested in personal finance, we would like to see what *we* find important included in the state-mandated curriculum, but there are priorities, and personal finance is not included. Parenting is a life skill, and if we were all interested in parenting, some would be calling for mandatory high school classes…

First there would have to be a training program for teachers at the university level, culminating in a bachelor’s degree in money management education. Such a degree will never exist. A couple of weeks spent on money management within some other class, like 7th grade home economics, is sufficient.

Parents bear the most responsibility, and schools don’t have room in the curriculum for an entire high school level class devoted to something that teachers have had no training for and is the parents’ responsibility.

If a high school has the resources, they can create an elective.

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avatar pfodyssey

This topic is near and dear to my heart as I feel it is absolutely fundamental to the financial well-being our of society. Although I do not have any children in high school, I struggle (although understand) PaulD’s comment about being unable to fit it in with other courses, etc.

The other points he cites (health, physical education, etc) are valid – and the lack of them a symptomatic sign of our struggling education system (another topic entirely). However, I absolutely favor a phased approach that is introduced earlier in school and continues throughout. In absence of that, we are left to rely on our parents…unfortunately, that does not seem to be working very well so far.

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avatar Karen

The thing is, most highschool students feel themselves immune to any of the bad stuff in life….
which leads to risky behaviors on all sorts of levels. “It won’t happen to me.”

Teach a money management class in high school and I’ll bet most students will think “I don’t need this b/c I’m going to be wealthy and I won’t need a budget/money management skills.”

Of course, WE all know better, but it’s not easy to force OUR values about ANYTHING onto a teenager.

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avatar mapgirl

I understand and agree with Flexo’s point about what should and should not be required in any curriculum. I have many friends who are public school teachers and it’s a bit ridiculous how much is mandated to be taught that is irrelevant to the three R’s. I say, careful with the mandates, especially unfunded stuff like NCLB.

That being said, I was taught in public school, 6th grade math how balance a checkbook. It was an entire section of our coursework. I have no idea why our public school decided to do this, but teaching word problems about compounding interest or the present value of money seems to me the natural place to do some commonsense teaching about personal finances. These are essential math skills every kid should have before graduating from high school (If they choose to stick it out for a diploma, which I know many kids do not). Heck, if I have to do present value, I have to break out a spreadsheet and do it manually to ensure I get the math right. But by gum, I get it right because I know the basic math, even if I’m an idiot and have to reverse engineer the calculation every time I need it.

Could it be that hard to teach personal finance as an integral math unit to junior high students? Probably not. That’s when most of this level of math is first introduced. I learned about shareholding from a stock market game/apple company our class ran in private school for 6th grade. (Yes, I repeated a grade, but that’s another story.)

I think the problem is literally academic though. Kids who are not accustomed to handling money, don’t take to the lesson very well because they don’t actually watch its ebb and flow out of their wallets. This perhaps is why every kid ought to work for money either inside or outside the home, just to get a taste of the real world and how to handle money. Think of this, how old were you before you handled over $200.00 worth of cash? Have you ever handled $1000.00 worth of cash? What about $5000.00? $10,000.00?

I would wager for most folks, it’s not till they are a cashier that they see that kind of money. I only handled sums like that because I worked for my parents. I used to make change for our customers when I was 12. I would help my dad count money at home when I was even younger than that. (Ok, maybe it was wrong sometimes and it was only wrapping pennies, but it got me used to being accurate and why it’s darned important.)

This is a great discussion post. I love it. I hope everyone weighs in. There’s going to be some great ideas in the comments.

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avatar Jameel

Personal finance classes have bad track records because no one understands what should be taught. Not how to invest or save for retirement. Kids don’t believe they’ll turn 30, much less 65.

Teachers should be trained to teach basics,
how checking accounts work
what comes out of paychecks
credit card terms
staying organized to pay bills

Parents can’t teach this stuff because they don’t know.

No room in the curriculum is an excuse for “afraid of change”. We need to fight for teaching our kids what matter. Unfortuneately, corporations pay for the lobbyists who make sure our lack of education continues to benefit them.

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avatar Valerie

I have to strongly disagree with Flexo on this issue. And for many reasons.

If schools are not teaching life skills, then it’s a poor educational system. How many COLLEGE graduate know how to effectively file an income tax form or realize how much their credit card purchases and educational loans are costing in interest? Certainly, HS grads know even less about it.

Math becomes a much more meaningful subject when it is applied to real life situations. I never understoon why I had to take Geometry in HS (College track requirement,) measuring the square feet in mythical football fields for no reason I could fathom. But the first time, as a married adule, that I purchased wall to wall carpets, it suddenly dawned on me that knowing the area of a room might be useful!

When I was in 7th and 8th grades a million years ago in Philadelphia, our Math teacher had the local bank bring in blank checks and registers, and we learned how to write checks and blanace an account and how compound interest worked. When I realized that my kids were not getting any of this kind of education in their schools, I had them write out our household checks (I signed them,) record them, and then reconcile the account to our statements each month. When they got to college and had their own checking accounts, they told me they were among the only ones in their class who knew how to handle their accounts. I also taught them what interest did to unpaid balances on credit card purchases, and to this day, they never run balances on their credit cards. (As a Public Health Educator who saw kids who knew nothing about handling their own health care, I also started sending my kids into their doc appointments alone (I’d sit in the waiting room and just talk to the doc afterwards,) from the time they were about 13. They’d make lists of questions to take in with them, and learned how to navigate the medical care system.)

Yes, this parent taught them, but obviously a lot of other college-bound kids did not get the help from parents, and frankly, I’m pretty sure the non-college bound (Yes Virginia, there IS a whole population of kids who don’t go to college!) get even less help in handling money.

Teachers don’t have to be investment specialists to teach this stuff – and they can aleays bring in guests presenters from local banks and investment compaines to spice up the class. Real life people the kids may have to deal with in the future.

And not everything has to be a separate course…I run teacher workshops on how to integrate Health Eduction into English, Science, Social Studies and Math classes…at ALL grade levels.

Think outside the box, people!

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avatar mapgirl

Valerie, is it a PA thing to learn about checking accounts in junior high? Because I grew up near Philly.

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avatar Valerie

To Mapgirl’s question…I have no idea whether it was then or still remains a PA requirement. I think I had a pretty creative math teacher even then. I do know that in high school (Radnor, in Wayne,) the students ran the school store and kept the books for the cafeteria as part of the business courses offered then.

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avatar La BellaDonna

I absolutely think basic money managing skills should be taught. Put it in Home Ec for the schools that still offer it, put it in Math 101 for the schools that don’t. As an adult, I got my checks paid to me in cash because I didn’t know how to set up a checking account, never mind make out a check! Yet both of my parents were intelligent, college-educated people. (I list both adjectives because the two don’t necessarily go together.) It just never occurred to them to teach us how to do basic household math.

Put a bunch of jobs with different incomes in a hat, and let the kids pick. Give them Monopoly money to match the jobs and income levels. Let them make out a budget, and work out “credit card” problems – you can get that big-screen TV on your salary as a bus driver, but you need to see the hole it makes in your monthly/weekly budget, and for how long. Teach them how to fill out a simple tax form! Teach them how to buy a house!

There’s very little I’ve taken away from school that would be as useful as most of the above.

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avatar Evan Berman

Of course, it would make good sense that schools offer personal money management classes. But, the fact remains that even if these classes were taught some people would still mismanage their financial resources and create debt. You also would not have this thriving business sector that exists without these type of people, those educated in the area and those uneducated in the area. Think about it, how simple is it not to spend money that you don’t have? It’s not rocket science, is it? So, create a course or series of courses to stress that idea for a single premise. right?

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avatar Jameel

Don’t spend money you don’t have. You, and many others think its that simple. Three points: 1) Many of my clients have no idea how much money they have. There’s more to it than just looking at your annual salary. You have to look at your expenses as well, and many people don’t take out the time to calculate their expenses. And as we should all realize, it’s not what you make, it’s what you owe. Two people that both make $60K a year, can have very different lifestyles based on their expenses.
2) Our whole culture is designed to encourage people to spend money you don’t have. Do you think the average American is going to wait until they have the money to buy a new washer and dryer when the old one breaks down? Do you think anyone can convince people to use a laundromat or wash their clothes in the sink? “Buy now, and make no payments, pay no interest for 12 months!�
3) Being in debt is not causing all the problems with debt in our society. It’s the inability to manage debt that ruins most people. I came out of college with 23 credit cards, no job and a pissed off Mom. I got two jobs, never ignored a bill, paid the minimum payments or less, paid tons of interest, and worked hard to get pay raises on my job. Eventually I got out of debt and had a high credit score in the end. I wouldn’t do it again, and I wouldn’t endorse it. But I learned that stress, denial, and vanity keep people from managing their debt much more than lack of money.

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avatar Alis

My High school did not offer any classes for PF and my parents aren’t exactly the best teachers.
So where else are people supposed to go for this information. I didn’t even know how to fill out my W-4 form for my first job and no one could tell me what to do.
In fact I still don’t understand PF very well.
As many people that there are in this country with credit problems I am surprised people are taking the subject so lightly.
No wonder our economy is in trouble when people put subjects that only some people will use after High School above a subject that everyone will have to use for the rest of their lives. Literature, History and Art are important, but knowing how many wives Henry the 8th had is not going to prepare you for buying a house or how to handle a credit card.

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avatar Luke Landes ♦127,386 (Platinum)

Alis: Your comment worries me. Schools can’t be expected to pick up the slack left by your parents. Money management skills can be taught at home — they don’t require a special degree. It’s sad that many people do not choose or do not have the ability to teach their kids basic skills, but high school is not the place for a required course. Do you really think that the point of literature, history and art is to memorize unimportant facts like the number of Henry VIII’s wives? If that’s all you learned from history, your school didn’t meet any kind of expectations for educational quality.

But you raise a good question — where do people go when their parents fail them? Well, it takes some initiative, reading, and research. Trial and error is usually how things work, but it doesn’t have to be. In fact, optional/elective classes throughout the public school system would have helped you. But why couldn’t anyone tell you what to do with a W-4 form? I’m sure if you were confused by the form, someone at the company for which you were to begin working would help you out. The W-4 is basically self-explanatory (instructions are at the top of the form) as long as you stick to the first page — and as someone newly entering the workforce, chances are that’s all you’ll need.

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avatar Enough Wealth

Given the poor knowledge of personal finance in the general population I don’t think leaving it to the parents is a particularly good option. I think there is a place for teaching personal finance in high school, but probably not as a stand alone subject. I don’t think it would be particularly hard to train teacher’s in this topic – after all financial planner’s are college trained in that speciality in most cases. But it would crowd the curriculum if added as another subject. I think a better approach is to prepare a cohesive set of topics, case studies and worked examples to provide as resources for existing subjects. Between history, mathematics, economics and personal development you should be able to cover the basics of personal finance. Student’s that don’t take all those subjects wouldn’t get the full package, but it would still be better than nothing, and wouldn’t add any more workload to the teachers or students.

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avatar Observer

I realize this is an old thread, but I wanted to point out a program called Real Money, Real World. It was developed by OSU Extension and Ohio Treasurer Richard Cordray. Schools can devote as little as 90 minutes or as much as a grading period to the program.

It works like this:
Students get jobs and salaries based on their current GPA (the higher your GPA, the better paying job you get). Several booths are set-up with different signs relating life events. Students go to each to add children, housing, entertainment, cars, etc into their budget. At the end, they have to have a balanced budget.

I helped out at one of these events at my local high school and it was great to see these kids doing the math and complaining how much kids cost or how they can’t buy the clothes they want because their job doesn’t allow it.

This is the the treasurer’s site with information on the program: http://www.yourmoneynowonline.org/content/view/566/478/

I really think it should be required of all high school seniors. Maybe even a primer as a freshmen. It is a real-life scenario that had another affect of making students more conscious of their grades. The 1.5 GPA students with the minimum wage jobs learned quickly that they are not going to be able to afford the lifestyles that their parents are currently providing them.

My two cents.

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avatar mikey

Our education system needs to confront the problem of financial illiteracy in this country. This is not a moral subject. This is a skill requiring education. EVERYONE is a money manager by default good or bad.

The knowledge required is greater than ever. We don’t just balance our checkbooks, keep some savings in the bank and work towards a nice beefy pension like the WWII generation did. We are shouldered with more credit, more investment choices and more responsibilities for our own retirements than ever before. Simple math doesn’t adequately confront these issues. Parents are ill-equipped for these challenges in general. Most parents didn’t learn this, because they were taught the same old credo “get an education, get a job with benefits, work 30-40 years and get a pension” We are demanding that the blind lead the blind on one hand and than wonder why we are a nation of debtors on the other.

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avatar Claire

…a degree in business education qualifies you to teach anything from accounting, computer keyboarding, business math, business foundations, marketing, AND personal finance.

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avatar Cindy

Algebra II is a required class for the Indiana Core 40 high school diploma.

How many young adults will actually use Algebra II math concepts on a regular basis compared to handling money and making financial decisions that will affect their future?

Wouldn’t it make more sense if high school students could have a choice between higher math courses or personal finance courses to fulfil the Core 40 requirements?

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avatar A college student

I completely disagree. I am a college student and a personal finance course in elementary, middle, and high school would have changed my current financial situation. Most of my peers including myself have no idea about managing money, and quite frankly as college students we should have a clue about how we should deal with our finances (don’t you think), especially because we are living by ourselves. Our current economic situation is because most people do not know how to handle their money. How can you say that the basic principles of personal finance don’t matter in the lives of Americans?

And concerning “teachers not being replacements for parents” – Do you understand that there are single mothers and fathers out there that barely have time to see their children throughout the day – nonetheless have time to talk about how to manage money? Did you know that there are students that dedicate their lives to school, sports, community service, and other extracurricular activities and that they spend more time in class than they do at their own home – what do they do then – when they are dedicated and diligent students?

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avatar jen

Those who don’t think personal finance should be taught in schools must feel darn sure that they are adequately teaching their own kids and therefore can’t see the need. But as a grown woman who learned NOTHING from her parents but how to run up debt I can tell you that personal finance MUST be made mandatory. This whole sub prime crisis we are in now could may have been avoided if the ignorant home buyers had learned the basics of mortgages, savings and debt! Think about that. If a course must be dropped, drop Algebra for cripes sakes.

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avatar Student

wtf……IN THIS ECONOMIC CRISIS having a financial class would help students entirely, and it isnt just math, its how to manage money, and how to understand monye terms……and if your a teacher, you would know how to manage your money…so they would be able to teach that class, and even if they didnt, most high schools have a bussiness teacher, so why not use that teacher…I TOTALLY DISSAGRE WITH YOU!!!!!!!!!

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avatar J F McClain

I am a high school business teacher with eight years of experience selling life, health, homeowners, and auto insurance. I was also was licensed to sell mutual funds and annuities. In addition I hold an MBA in Management and a teacher certification in education.

It seems, sir, you have missed the boat entirely as many of the responses to this post will conclude. Ninety-eight (98%) percent of what happens after high school deals with money management. If Wall Street and our big institutions of learning (i.e. Ivy League schools and the like) would let their secrets to becoming rich and wealthy be known to our young people at an early age maybe they wouldn’t be settled down so early with so much debt and confusion about what financial choices to make in life.

Your reasoning is a great way for the rich to get richer and the poor to get poorer!

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avatar Rupesh Pawani

Without doubt, children need to learn financial management. I teach both my son, 10 and 12 years of compound interest, credit control, and planning for the future. I wish I'd learned about managing money when I was younger.

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avatar Chris Anderson

I believe this article has a lot of false pretences! Yes I beleive it would cost more money in training teacher to learn this. But yes we have parents, but parents aren’t finaicanl wizards either. Bankruptcy is a all time high. The only time a person will learn about fiance is when they move out. Yes again you have parents, but parents don’t train their kids on this end. There is so much to know. Keeping a good credit score and how, from 401k accounts, stocks, buying a house, getting loan. I wish I had something like this in high school. I’ve had to learn on my own, the hard way. Having a class at a young age would help with bankruptcys. So inturn it would cost the goverement less money if they made this a requirment. Also there are required classes that are meaning less, and some or most people never use out of high school. Why not trade that. Everything comes down to money! So if they look at it this way! Maybe it might change their mines.

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avatar Nadine Sarah Clement

That’s because it should be more than just budgeting money. It should be some of the following

1) The Importance of IRAs
2) How to Invest Responsibly
3) How Credit Scores Effect Your Financial Life
4) How Insurance works
5) Why Saving is Important
6) Ethical Consumerism
7) Making Budgets
8) Understanding how Taxes Work
9) Understanding the Importance of Keeping Records
10) Privacy in the Internet Age

No high school knows what an IRA is, Credit Score, etc. But these are things that we have to deal with as an adult on a regular basis. Of course a kid is going to get bored with a class solely on budgeting but adding the other stuff perhaps wouldn’t make it as boring. If you agree with the concept that we should have personal finance as a high school requirement please sign my petition at http://www.change.org/petitions/put-personal-finance-as-a-high-school-requirement

Thank you for your time!

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avatar Caley

I have to disagree with nearly everything you have stated. I am trying to understand your points and reasoning as to why this should NOT be taught, but they are absolutely ridiculous. Your first point being teachers arent certified to teach this is somewhat valid. Teachers should have specific training for what they are teaching, I agree. But in case you werent aware people do go to college for business and finance. (and obviously become teachers hints the college professors) Your second point completely contradicted your first when you said that parents should be teaching this at home because its a “life skill” and parents do not need any special training on this (because its a part of everyday life).

Id like to ask you, if you have sought higher education, and if so, how much student debt are you in? Have you paid off a house or car note? And do you have a retirement plan you are savings towards?

I cant refrain from pointing out how ignorant you sound in your reasoning . How can you ignore the financial problems at hand in our country. Once the “parents that are teaching their children these skills” (who are few) who will teach the next generation if this is not mandated in schools? The children who will become parents will have no idea how to explain finances because they wont understand themselves!

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avatar Brian

Imagine if the situation was reversed, and personal finance was a required 12th grade class and a 4th year of high school English was an elective. Now imagine if some group of folks came along and suggested that we should drop personal finance from the required curriculum so that everybody can be forced to take this additional English class. People everywhere would be outraged! Replace basic life skills with nice-to-know but certainly not need-to-know British Lit? Are you out of your mind?

But with the situation as is, people come up with all sorts of reasons to maintain the status quo. Funny how inertia works.

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avatar Charles

I teach a PF course for 2nd semester seniors prior to going off to college. I am pushing for it to be a requirement for our holistic scholars program. The world has changed. Many of our students feel that high paying jobs are easy to obtain – they are not. Many of our students don’t understand how student loans effect their life after college. None of my students understand any of today’s financial lingo. All of them are prime to be taken in by a myriad of marketing pitches that make claims too good to be true. Half of our students are females who, in the past, abdicated the role of FP to their spouse. None of our students can link the deductions on their part time job paychecks to the national debate on debt, social security and health care. All of my students parents are thrilled that I teach this course as they don’t feel qualified to pass along their wisdom. Many parents want to take the course with their kids ! I am a math teacher who spent 25 years as a consulting partnerr prior to getting into teaching. I am not a CFP but it is not rocket science to prepare, stay up to date, and create awareness so these kids can have a foundation of financial literacy with which to build upon. Finally, I think 2nd semester kids are the youngest you teach this stuff too….they have to have one foot out of high school to start to care.

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avatar Blanche DP

Are you kidding me? The current school curriculum is designed only to teach kids basic skills which will make them useful to corporate society. All high school age kids should be taught not only the three R’s AND personal finance but beyond that, basic economics and basic corporate financial concepts, such as how the markets function. Sending people kids out into capitalist America without a financial education is like sending them out naked in a snowstorm. NOT teaching them finance ONLY benefits the banking industry, in both the consumer and investment sectors. It’s a shame that you can’t put your personal politics aside for the sake of pragmatism.

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avatar JamesD

I think money management and the importance of Credit Scores should made into mandatory classes for Juniors and Seniors in high school. I’m 25 and working on reparing my credit due to poor money mangement after high school. The saying “if I would’ve known what i know now” in this matter apllies to me and many others. With the way the economy is today,I think this will give young adults a better start in life. I know making the classes mandatory may seem harsh and all of the students wont actually need to take the class but you can never know too much. I believe this will better the economy as a whole in the future.

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avatar Steve

My senior year of high school I only had two required courses to graduate. A history class and an English class. I had to take six classes it total, that is four electives, four classes like photography. Why not require one of those courses be a PF course. I wish someone told me about an IRA when I was 18. That would have been a lot more useful then how to develop a photo, which I have not done since that class.

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avatar asmith

I completely disagree with every bit of reasoning you have for your belief that PF should not be REQUIRED. While I understand your difference in stating you do believe students should learn this information, you do not feel this should be REQUIRED. Given the economic state we are in, I can’t possibly think of a better time PF should be REQUIRED. What I find interesting, is that when a person declares and completes bankruptcy, they are REQUIRED to attend a PF class to prevent bankruptcy from occurring again. Wouldn’t the PF class be a better idea if we were more proactive rather than reactive??? Teaching future generations about financial concepts necessary to make appropriate financial decisions. I have an investment background and a masters degree and in my previous line of work I was able to educate individuals about investments without telling them what to do. My job was to educate and then they decide for themselves. Having the knowledge and education of PF will help future generations. And as I’ve mentioned prior, I have a masters degree. Therefore, I took the required science, math, and history courses to which has absolutely nothing to do with my career path and has not helped me on a daily basis. Had I received a PF education, I could honestly say I use that on a daily basis. Balancing checkbooks???? Who uses a checkbook anymore? I don’t even carry cash. We are living in a world that does not require paper, but only plastic. I can use plastic that comes right out of my accounts without incurring any debt. That $2 coffee you have daily? costs $60 a month that you never actually budgeted for b/c most people don’t use a line for “coffee”. While young adults can do the research on their own, this will unlikely happen unless the horse is led to the water. It IS our obligation as CITIZENS who are all living together as a COMMUNITY to help each other provide important and beneficial information. I bet some parents would actually like to partake in the class as well because they would probably learn something too.

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avatar TK Akers

I STRONGLY DISAGREE WITH THE INCLINATION OF THIS ARTICLE WHICH BLATANTLY DENIES KNOWLEDGE AND SKILL IN THE ONE (1) AREA OF LIFE PEOPLE HAVE THE MOST PROBLEM WITH – PERSONAL FINANCES IN A COMPLEX ECONOMIC ENVIRONMENT. THE WRITER IS STUPID, COMES UP WITH EXCUSES FOR KEEPING YOUTH IGNORANT. YOU BET YOU ASS IT IS DEFINITELY APPROPRIATE FOR HIGH SCHOOL TO PREPARE STUDENTS ABOUT TO ENTER INTO AN EARNING, MONEY MANAGEMENT PORTION OF THEIR LIVE WITH THE SKILLS TO AVOID THE #1 PROBLEM FOR FAMILIES, YOUNG ADULTS – STRONG MONEY MANAGEMENT SKILLS. ENOUGH OF THE STUPID EXCUSES PITTED AGAINST SOMETHING BENEFICIAL. IMAGINE, TEACHING STUDENTS HOW TO EARN BUT EXCLUDING THE SKILLS NEEDED NOT TO BE RIPPED OFF BY COMPLEX FINANCIAL SCHEMES. THERE ARE THOUSANDS OF WAYS YOUNG PEOPLE GET RIPPED OFF. FINANCIAL SKILL GO HAND AND HAND WITH EARNING. WHAT A FOOL! REPREHENSIBLE.

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avatar BlancheDP

Here, Here!

Flexo, what exactly is your interest in a financially ignorant population? Keeping the working class ignorant, and pregnant to produce more fodder for the hungry capitalist beast? Do you figure that this helps your stock portfolio? Please think before you disseminate such silliness. The entire world runs on money and markets. Not teaching this in school is a crime, and it is deliberate. Do you think that Bain capital & Romney want a financially literate public? How about Angleo Mozilo; an ignorant population helped him make billions. Dick Fuld still lives in multiple palaces, while most of America still lives with their collective head and/or thumb up their ass.

Yes, there is a personal responsibility for people to educate themselves, but at least give them a gentle nudge in the right direction while they are still young, instead of simply giving them a basic skill set that will serve their masters more than it will serve the individual. At least try to teach them to think.

Paul Simon said it best:
When I think back
On all the crap I learned in high school
It’s a wonder
I can think at all
And though my lack of education
Hasn’t hurt me none
I can read the writing on the wall

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avatar Luke Landes ♦127,386 (Platinum)

Schools are not equipped to provide the best learning for personal finance lessons as a class unto themselves, unfortunately. If personal finance classes were proven to improve people’s decisions later in life, then they would be a better case for offering mandatory personal finance classes, but they aren’t. Studies show that some personal finance classes might even do more harm than good.

Lessons in money management can be incorporated into other classes, but let’s face it — the kids more apt to take away knowledge from high school are taking more advanced classes, and the kids who don’t fit into the advanced classes are unlikely to retain much taught about debt management and investing. There are some extra-curricular programs that do better to address the educational needs of at-risk students in the area of personal finance. This is a better choice.

I have no interest in a financially illiterate society. Unfortunately, most money management programs inside schools fail to reach their goals, and do nothing to assist multi-generational financial illiteracy and poverty. I’ve written many articles on this site about how to address the root causes, and money management lessons in school will not work for the neediest groups. More education does not solve problems for a certain population that does not value education.

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avatar Duzer

I might be a little late but I found this article researching for a speech on whether financial type classes should be required in high school.
But I’m just dumbfounded at what you can say about these types of classes being not important and that you can get all the information you need in 2 weeks. And retain that information from a class in 7th grade. I agree with Flex in that high school doesn’t prepare you for the real world, but maybe it should. Too often we’re taught to do exactly what we are told and if we make a mistake we are severely punished for it. However, these mistakes are made every day in the real world because we have learned to follow directions but sometimes there is no one to lead us once we’re on our own. Wouldn’t it be nice to have already corrected some of these mistakes in school, before it really costs us. It’s impossible not to make a mistake once you start living on your own. But if schools teach you to accept this and learn from it, then could it not make us better off financially?

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avatar jag42905

I just wanted to state that this guys argument is absurd.

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