90% of People Believe Personal Finance Should be Taught in School

by Justin Weinger on April 14, 2007

Until it becomes a part of school, you'd better prepare yourself to teach your kids about personal finance.

Thanks to a recent poll on Saving Without a Budget, it appears that I’m not alone in the belief that personal finance should be incorporated into the core curriculum of America’s schools.

According to the poll, 89% of respondents stated that they believed that personal finance should be a required part of every child’s education.

The logic behind teaching children and teenagers about personal finance is pretty obvious.  Just think of all of the finance cliches that you’ve heard: start investing as early as you can, the most important factor in investing is time, don’t get into credit card debt, etc. – all things that are best to learn sooner rather than later.

And because many basic aspects of personal finance currently aren’t taught in school and are left to be learned at home, this current system seems to nurture the fact that wealthy people tend to stay wealthy and poor people tend to stay poor. I don’t think it takes a giant leap of faith to see the possible correlation.

And probably the most ironic part of this is, the results of the Saving Without a Budget poll come on the heels of a recent report that shows nearly half of all people in the workforce have less than $25,000 in savings for retirement.

Again, it doesn’t take an MBA to see that this number would probably be a lot less if all of us had been exposed to some basic personal finance lessons as we were growing up.



cc April 15, 2007 at 12:04 pm

I believe absolutely that children need to be taught how to handle money. Unfotunately, their parents are not always the best teachers. I grew up with parents that new nothing of financial responsibility, therefore, in my young adulthood, because I learned by example, I also started down that route. Credit card debt, bill consolidation loans, etc. Fortunately I married a man who taught me financial responsibility. He learned it from his parents, and we were fortunate enough to instill that same responsibility in our children. So my feeling is, whether they learn it from their parents, or a class at school, learning financial responsibility is a must for young people of today. Start in elementary school!

Brian Carr April 16, 2007 at 2:18 pm

Unfortunately, many high school and college students can use that same “my parents pay for everything” excuse as well.

Besides, I think personal finance can be incorporated into elementary school education the same way math or science is. I mean, we teach kids about the basics (i.e. addition and subtraction) before we throw the hard stuff at them (i.e. trigonomitry or calculus). Same thing can be done with personal finance.

Alex April 16, 2007 at 2:56 pm

Economics is required in Indiana.

Jason April 16, 2007 at 3:07 pm

Can you imagine what would happen to our economy if people learned how to spend their money carefully? Our economic system depends upon lots and lots of poor people.

J.B. April 16, 2007 at 3:09 pm

Do you really think that Big Corporations would allow this to happen? They want you ignorant so they can get you paying some monthly crap as soon as possible in your life. Same with banks. Do you think they want you to realize how a home morgage works, how interest is calculated on credit cards, why it’s financially ridiculous to lease a car? Nope, they don’t. They just want you to spend, spend, spend. Of course, if they get to pocket that wonderful 10% to 20% interest rate, the better it is for them.

However, the schools will be more than glad to teach you math, english compostion, and every other worthless & useless material they can find. Bring up the topic of personal finance whose information you will use for the rest of your life and that’s not important.

dar33k April 16, 2007 at 3:33 pm

What the frick:

” Again, it doesn’t take an MBA to ”

is that? I’ve met tons of MBA’s that I wouldn’t trust to take care anything, maybe my McDonalds order can be properly accomplished.

Viking April 16, 2007 at 3:53 pm

I think this is definately needed by at least the college level. I think they should replace a lot of the required courses like philosophy and classes like that with classes that have to deal with “How To Lease A Car” or “How To Buy A House”. Things like that would have definately helped me understand what a ‘lease’ was and how in the world I could afford a $500K house with a mediocre salary.

metaldwarf April 16, 2007 at 4:54 pm

@ viking

tell me how i can afford a $500k house on a mediocre salary… im still trying to figure that out. and it better not be no god damned 99 year mortgage

Thomas April 16, 2007 at 7:01 pm

Excellent article and I totally agree that our school systems should definitely integrate some sort of personal finance portion into there curriculum. I also feel that some responsibility should fall into the laps of parents and teaching there children the value of a dollar.

altseeker April 16, 2007 at 9:29 pm

Great idea– another class for teens to skip and nap through.

Jameel April 17, 2007 at 4:36 am

We are all MISSING THE POINT. We’re so focused on investing, and saving and getting rich that people don’t know how to manage the money they have!

People still get into too much debt, even though everyone says it’s a bad thing. These days trying to avoid debt is futile. The missing link is that no one’s explaining how to stay on top of debt. Learn to manage it – this will teach us how to avoid becoming a victim of it.

We need to teach kids HOW checking accounts work, the TERMS of credit card agreements, how to stay ORGANIZED so your bills can get paid on time. I have tons of clients that have money and can’t pay their bills on time!

Now I teach teenagers and they love it! They want to learn this stuff – not investing and calculating interest.

Motorcycle Guy April 27, 2007 at 12:37 pm

I think they should be given the opportunity maybe, but I seriously doubt many would take it.

Sam May 20, 2007 at 6:21 am

I think personal finance should be taught at school but first and most of all, it should be taught at home. We are taught how to work for money, that’s fine. But we often only see examples of how to spend money – we miss the good opportunities to make our money grow, by lack of awareness. We are not taught to be financially wise at all in the current system.

Personally, with what I am aware of today, I know I could have easily retired a millionaire at 35 if only I had well managed my assets and income in my early 20s. If everybody had a better financial education, our personal and nation-wide economy would be in way better shape.

rockytop97 June 1, 2007 at 6:00 pm

I think the reason public schools don’t teach kids about debt and money management is because the government would lose money. Think about it, if kids were aware of “borrower is slave to the lender” then no kids in their right mind would get a student loan. Also, if they got smart with money at a early age then they would realize how screwed up their parents finances are and realize they aren’t paying for their college. I guess then it’s the parents job to educate their kids by example. Monkey see Monkey do.

NBC December 26, 2007 at 8:59 pm

The best way to teach a lesson is to force a lesson…..
I grew up on a farm in the 80’s/90’s that was always on hard times. I didn’t get get school clothes or lunch money or even toys….without earning them. I was paid a hourly wage for my work, then that money was set aside for my lunch money, toys, heck I even had to buy a twin bed at 12!
It opened my eyes up, that this world is driven by hard work and hard work gets you cash! I started my first retirement account at 19 after completing basic training(ARMY) and have never looked back! I will retire early!

claudio March 27, 2008 at 10:08 am

It is a joke that this is not taught at the high school level. This is done on purpose because the government wants it this way because the more people spend, the more the corporations make, the more they make, the more taxes they pay and the more the government has to push their agenda on the rest of the world. If People really knew how to manage money they would spend less and save more, but that is not good for the government because they will collect less taxes. Its not coincidence that personal finance is not required in High School and probably never will be. By withholding knowledge from the masses, the government and rich corporations have power over us because we dont have the knowledge, the day this changes is the day that the gap between rich and poor starts to narrow and wealth will be better distributed amongst all people. At the same time, corporations will lose some of their luster. Also, did you know that banks make over $ 9 billion a year in late fees and fees in general. In theory, if everyone was careful and did things right this number should be zero. What do you think the companies and the government would say to that ? They would not be too happy because its less money in their pockets. The whole system is a joke.

realist June 27, 2008 at 7:09 am

More math in school? Not a change. School administrators and teacher with their own agenda would much rather teach diversity.

Environmental bashing, tree hugging and “make peace, not war” are all more likely to be taught than the 3 Rs.

amdf August 31, 2008 at 8:05 pm

Here’s a great tool that’ll enables people to visualize their wealth given their investment/ expense decisions – check it out ;
use this in your schools to explain how your cash flows are impacted

explanations on how to use the tool on the video link , but basically you can drag and drop icons and fill them by double clicking

– more to come with optimal portfolio allocation

usdfinance December 8, 2008 at 10:34 pm

Personally, with what I am aware of today, I know I could have easily retired a millionaire at 35 if only I had well managed my assets and income in my early 20s. If everybody had a better financial education, our personal and nation-wide economy would be in way better shape.

Graeme February 2, 2009 at 12:40 pm

School is hardly the place to be learning anything at all unless you’re a hypnotized zombie. Parents are ultimately responsible for what their child learns and should always be regarded as the only teachers one will have!

Scott April 21, 2009 at 10:57 pm

It once was possible to be poor and free, but this is no longer true. In order to be free and independent in the United States, you need to be financially independent, and in order to be financially independent, it’s ideal to have some training.

A few finance classes would be infinitely more useful than like calculus for most folks. Calculus teaches you to do more calculus, usually for some kind of manager someplace, where finance would teach you some independent thinking.

I actually agree with claudio’s post from last year — it’s more true than ever – that if you don’t learn to manage your finances, some sort of manager will, and as evidenced by the financial collapse, you can’t trust managers to manage your money (or your time).

The best approach: teach kids some self-sufficiency.

saurabh kanwar May 10, 2009 at 10:45 pm

Most of us spend major part of our lives in earning money and most of us are successful in accomplishing this objective. But quite often we do goof up with money related issues and keep scratching out head at the month end.

This is where the money management comes. We should inculcate this habit right from the school days as this will help the kids to deal with the money issues more effectively.

Jameel July 16, 2009 at 1:12 pm

Many parents don’t know anything about on-line banking, automatic deduction, debit cards. No one teaches how to stay organized so bills get paid. Don’t put this on the parents. When I teach kids, the teachers and parents are in the back asking all the questions.

Accurise June 10, 2010 at 11:35 am

Financial responsibility is founded on a solid credit score, which is initiated with your first credit line. Most people start using their first credit card without the knowledge that a credit line ties their purchases, payment history, etc to their name. Hence, the importance of teaching adolescents the importance of what good credit means. Timely payments, financial responsibility and personal finance management should all be de-mystified so that by the time these kids do start their credit lines, they can spend responsibly.

Ben August 5, 2011 at 12:35 pm

I completely agree myself being a recent graduate of college it is astounding how few people really understand what is going on in terms of finance. I started investing my sophmore year of my undergrad, and I now find it apalling that my peers only know relevant facts about MTV shows or American Idol, but no idea of how to prepare for their future.

Brian Carr August 5, 2011 at 12:53 pm

Ben – thank you so much for the comment, and I absolutely agree with you. I graduated college as a finance major, and all the way through school, the personal finance stuff came either from my parents, life experience, or me making the effort to learn stuff on my own.

You think people would have signed up for crazy balloon mortgage if they knew more about money? (Well, maybe, but not because of ignorance, rather, because they were being greedy).

Thanks again!

J. Is a Bird August 17, 2011 at 6:26 pm

I do this at home now with my 5 and 3 year old. That said, I’m a bookkeeper and everyday I see my clients kid’s that don’t understand thing one about money management.

I do small things w/my kids. How much does your pizza cost? How much money did I give you? How much did you get back in change? Oh, you want water now, how much is it, do you have enough change to buy it? Small concepts now that I can expand on as they get older.

Brian Carr August 17, 2011 at 8:35 pm

Thanks for the comment. I think your idea of starting small and covering the basics at a young age is great and I wish more people would do that. Sadly, I think a lot of people don’t teach their kids about personal finance because they really don’t know much about it themselves.

Summer August 17, 2011 at 7:31 pm

It would be great to see children be exposed to something besides consumerism. Our society is too focused on money. Learning how to take care of yourself and the world around you is definitely a great skill. But it is something learned, not taught. And it doesn’t necessarily require money in order to accomplish that goal. It also can incorporate learning how to grow your own food, repair your own car, use environmentally friendly practices, cooperation with other members of your neighborhood and society. The more we move AWAY from consumerism for our children, the less of a problem they will have with money. And the better off our society will be.

Brian Carr August 17, 2011 at 8:36 pm

Thanks for the comment, Summer. I completely agree that we’re a consumption-based, money hungry society and it would be really nice if we could pass on frugal traits – being happy with what you have, not being defined by money, etc. – on to our kids!

Family Finances January 20, 2012 at 11:16 am

I totally agree that children should be taught financial literacy lessons at school. I live paycheck to paycheck myself, that’s why for me it’s crucial to be able to track all of my spending and make sure I don’t go over my monthly budget. It’s true that parents are primarily responsible for their kids’ financial education, that’s why I try to do my best to set a good example for my children: I want them to understand the value of money, learn how to spend them wisely and be prepared for all the financial hardships that may lie ahead.

{ 7 trackbacks }

Previous post:

Next post: