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.
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?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.