Why Isn’t Personal Finance Emphasized in School?

by Justin Weinger on March 15, 2007

Lately I’ve been reading a lot about personal finance articles on Yahoo! Finance and MSN Money – stuff by Suze Orman, David Bach, Liz Pulliam Weston, people like that – and I kept thinking the same thing after reading each of the articles: this stuff is actually pretty simple.

Despite the relative simplicity of personal finances, I also kept coming across the same problem: why are people left to find out and read about this stuff on their own, and why isn’t personal finance taught to us as we go through school?

Think about it, what are the some of the pillars of personal finance?  The earlier you start investing the better, spend within your means, pay down high interest debt as soon as possible, have an emergency fund, know the difference between a need and a want, etc.  The list could probably go on for three or four pages, but you probably get the point.

None of these concepts seem that difficult to grasp and, if presented in the right way, could probably be understood by, at the very least, middle school aged kids.

As a parent, what would you find to be more impressive; your kid telling you what an amoeba is or how to balance a checkbook?  What the derivative of 2X is, or how compounding interest works?

Don’t get me wrong, I’m not trying to undermine the importance of the stuff that we actually do learn in school, I certainly think it’s important for kids to be well rounded and learn about all sorts of things.  However, I think it’s pretty easy to make the argument that personal finance is far too important to be ignored.  

It seems to me that if some emphasis was placed on personal finance while kids/teenagers are young enough to have not made dumb financial decisions, a lot more people would be better off financially than what they are today.  Credit card debt would be lower, defaults on car and home loans would be lower and, most importantly, many more people would have financial peace of mind.

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{ 4 comments }

Brian May 20, 2007 at 10:44 am

The reason they do not teach personal finance in schools is because most teachers are horrible with money

Brian Carr May 20, 2007 at 4:02 pm

Brian, do you have some sort of evidence to back up that claim? It seems to me that this assertion is probably a load of crap.

Archetypical May 23, 2007 at 11:56 am

It isn’t as if the knowledge and tools haven’t been made available, people just aren’t using it.

In our gradeschool math classes they taught us about interest and compounding interest. They continued with it through high school and college. We have Economics and various other courses (Home Economics, Accounting, etc) that teach us about managing assets and liabilities.

Didn’t anyone else have that annoying class where you pretended to be married and used your salaries to build a budget and support your family? We had to find a place to live, build shopping lists, account for unexpected expenses, etc… coupon clipping encouraged. Even if you didn’t have that class, math was a requirement.

I don’t think the problem is a lack of education. I also don’t think it would hurt to have a few weeks every year where they apply the lessons to real world examples in personal finance in math class (even though it is redundant). If that’s what it takes for more students to make the connection between their lessons and the real world it would be worth it.

*I am not a teacher, nor am I affiliated with any learning institution.

Credit Consumer Counseling July 12, 2007 at 4:29 am

When it comes to personal finance, the most important is understand your own financial situation. Always save money first before you think of spending. You guys always overspend with credit cards without thinking of how they are going to pay it back. That’s the problem dealing with debts.

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