Should Personal Finance Be Taught in High School?

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One of the biggest missed opportunities of the education system in America is the lack of education revolving around personal finance. With the amount of debt accumulated by Americans soaring each year, it’s a wonder how schools have neglected to add even a one-day course into their middle or high schoolers’ curriculums.

Should Personal Finance Be Taught in High School?

Millions of high school graduates or recent graduates enter the “real world” of college, military service, or employment each year with little to no knowledge of the key principles of finance. Many believe that it is as easy as earning money and using that to pay bills. Unfortunately, it’s not that simple.

Fresh out of high school, where teachers remind their students of each and every assignment they have due and help them work through it, graduates today aren’t used to jumping into independence with both feet…especially if they have rarely had to deal with money on their own before.

should personal finance be taught in high schoolWhat About Responsible, Working Kids?

Students who work throughout high school do have a little bit of an advantage, as they have to deal with taxes being taken out of their pay and (most likely) parents who tell them to spend their own hard-earned money from now on. The other half of the population, however, isn’t as well off upon graduation; students whose parents handed them cash for every purchase they wanted, or gave them a credit card for spending, are at a major disadvantage.

But even if a student has a job in high school and uses those earning to pay for their own outings with friends on junk food, not many know a single thing about contributing towards their future retirement. Taxes are something their mom and dad deal with, and beyond Uncle Sam taking his share every year, they may not know much about them. Expenses — not even just monthly bills, but health insurance coverage, car maintenance fees and using credit cards — are more complicated than the students’ previous experience of paying for dinner when out with friends.

Parents Aren’t Helping

Another potential problem is that students rely heavily on the one source they trust most for teaching them about life: their parents. Parents can be very helpful when explaining what to do in life to their kids, but they can also lead their children (inadvertently) down the wrong financial path. Parents may not know how to budget — or how to budget well — and may teach bad financial habits to their financially naive children unwittingly. Multiple lines of credit and a large mortgage and car loan may show the student that debt is normal, and that it is okay if they go into debt to get what they want in life. This can be the most destructive lesson of all from parents.

What is Personal Finance Again…?

This is exactly why the American education system should mandate at least one class that educated students on how to manage their finances appropriately and what exactly personal finance is. In the era of technology we live in today, students can Google whatever they want to find answers from everyone who has access to a computer; these opinions may be based on the author’s situation, blatantly incorrect, or misleading to the financially illiterate student trying to make sense of their new financial responsibilities. Some students learn best with a one-on-one approach, which the in-school curriculum could provide; others need to be taught and reminded that not all financial advice works for everyone, every time.

We don’t need to hold the hands of our students when it comes to finances, but we sure do need to guide them in the right direction. Passing down a tradition of bad financial planning has proven to be a detriment to our society and has left millions in debt with a difficult journey ahead to become free of it. We can prevent students from making the same mistakes by providing them with a financial education.

What do you think? Should personal finance be taught in high school?

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10 comments to Should Personal Finance Be Taught in High School?

  • Kathy

    My knee-jerk reaction is “YES” personal finance should absolutely be taught in school. But then I think about it and I tone it down a bit for one reason. Who would teach the course? Obviously someone who has their own financial world in order would be best, but how do you know who that is? I suspect like all other career categories, there are probably many teachers who struggle with debt and poor money skills. And how would we know whether the specific teacher really practiced what he/she preached? But, at the end of the day, I’d still say yes. At least teach about the dangers of credit cards not paid in full, low credit score, managing a checking account (i.e. don’t rely on the ATM balance) etc. Just having those points as part of a curriculum could potentially make kids aware that there are options available beyond a debt ruled life.

    • Right? My old finance professors were broke and often admitted it! The qualifier to teach a personal finance course should be to have at least $250k in net worth, and it can’t all be in your home value!

  • Personal finance should absolutely be taught in high school, and the basics in lower grades as well. NJ has a mandated financial literacy standard for schools and it starts in elementary school. Every state should adopt this type of standard to adequately prepare our young people for the real world.

  • Lisa

    Yes! I agree Derek, this is so important! In fact, this is a big part of why I am going back to school to get my degree in finance. I’m working full time so it’s going to take much longer than I’d like, but upon finishing my degree and working a few years in the industry I’m going to find out what steps I can take to get finance included as part of the required curriculum to graduate from high school. I use to work in the IT department at a school district and I brought this up with one of the TOSA’s there and she said some high schools offer finance classes but it’s not required. She thought it would be hard to find someone qualified to come in and teach.

    Currently I believe only 5 states require a finance class for high school graduation (Utah, Alabama, Missouri, Tennessee and Virginia). This type of class should be taught by someone who is (or recently was) working in the finance field. I’m not sure what the requirements are for a teaching credential but if it’s too involved maybe they could come up with a different type of credential for working professionals that want to pass their years of practical knowledge along to the students.

    • I would absolutely love to teach a personal finance class. And there are so many topics that should be covered! Investing, savings, debt, insurance, earning, spending. The list goes on and on! If you know of any West Michigan schools that are looking for teachers, sign me up!

  • “We don’t need to hold the hands of our students when it comes to finances, but we sure do need to guide them in the right direction.”

    Really enjoyed reading this article, especially this quote! A personal finance class should 100% be required for all high schools! Parents could potentially be a good source for teaching their children about personal finance, however if they aren’t knowledgeable in how to save and budget correctly it could hurt the children in the long run! Having a mandatory class for high school students will help them get them on their feet and at least have an idea of why personal finance is so important!

    • So many of my friends were book smart, but financially stupid. Heck, even I went out and bought a flat screen TV and surround sound when I saw a comma in my bank account! A class sure would have been helpful!

  • I absolutely think that some of the basic concepts of finance need to be explained at an age where these decisions become important, and honestly, anybody graduating high school is either going to be heading off to college or likely entering the real world, so thinking that it can wait until after high school is too late.
    Money Beagle recently posted..Homemade Raisin Bran: Easy, Healthy, and Frugal

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