Financial Management Teachings - Why Not Taught In School?

[Nifty]

I'm going to break in this topic with a post!

My 4 brothers, sister and I were very blessed with parents and grandparents that were very astute when it came to money management. Partially due to Depression era experiences and also probably frugal to a fault, but in general we're very lucky for what we were taught.

Something I've thought a LOT about over the years and also had a discussion with a friend over was this: Of all the things taught in school, how come the fundamentals of financial management, interest, budgeting, etc. are not taught in school?

Maybe things have changed (I've not been in grade school forever and my girls aren't old enough yet) but I sure did take a LOT of classes that had a MUCH lower ROI (return on investment) than if money management classes had been taught.

Don't get me wrong... the hours I spent learning history, math, science, English, etc. etc. etc. were very helpful in my development, but I personally believe that people also need a foundation of financial aptitude to make it in life.

Again, this is just my opinion. I'd love to hear if other grade schools K - 12 are requiring students to take classes that will teach them the basic financial skills necessary to make it through life and retirement.

Cheers!

 

[yotetrapper]

I recall being taught how to balance a check book in grade school. But that's the only thing I remember, there may of been more to it, but not that I remember.

Another point is that back in the day, kids were often required to pitch in to fmaily expenses, and ALL of kids "luxeries" were bought with their own money. I'm sure some people are rolling over in their graves watching Mommy and Daddy financing 2008 vehicles for their 16 year olds. And what's with $20+/wk allowances??? In lieu of the schools doing it, the responsibilty falls to the parents, and they dont seem to be doing it.

 

[Colored Egg Farmer]

I'm taking all busness classes this year in 12 they have finincial management in them like checking and computer money management.

 

[Nuggetsowner:)]

In my DS school there is a school bank where all of their fundraising money goes. They can keep track of this account and use the money for such things as school trips (if they are invbolved in a foreign language, to pay fees such as enrty into debate or academic decathalon and I believe sports programs. Their money is theirs to use how they need as long as it pertains to a school function.

Also there are classes such as economics, and there is a class that allows them to "work" in the school bank.

To me the idea of a school bank is great!! Yea, the kids stillhave to go out and fundraise usually twice a year but then the money they raise is their own to use throught their High School career. Once they graduate,if they still have a balance in their account it goes back to the school.

All in all I think my son has great access to learning about basic financial skills. What he does not learn in school he definately learns at home!! We are not the kind of parent who hands their kids everything!! He works and pays for "extras" on his own!! He sometimes thinks this is very unfair, as some of his friends come from families unlike ours but he has also said many times that he is glad that we care enough about him to teach him how the "real world" is.

Thanks again Nifty - you have already sparked some great conversation!!

 

[hoosier]

Nuggetsowner, you and I seem to have had similar upbringings.
It is obvious that a lot of adults could use some help on this subject. How can we expect young people to know how to handle money when their parents are out of control? Our local high school offers an economics class that touches on financial management.(When I was in HS, back in the Dark Ages, I learned how to file tax returns in my government class which has been useful.)

 

[Nifty]

Sounds like there were / are some options for classes. In HS I took a few classes where we "bought" stock, tracked the market, learned how to use Excel, etc.

I know there are elective classes, but I think basic financial fundamentals, for example the power of compound interest and how it can be your best friend or worst enemy, should be a required course in HS!

I don't think the percentage of people who use algebra, trigonometry, calculus, or history use what they learned in those classes 1/10 as much as they use (need) financial education.

 

[2 Beauts]

This whole topic applies to the current housing situation!

 

[Their Other Mother]

My daughter competes in the Miss America Pageant Organization. Here is her competition platform statement:

Improving Financial Literacy through Education

A life of financial success and security begins with a strong education. Every generation of Americans are introduced to the realities of spending, saving and finance at a younger age than the last. Yet for many years, our nation's financial literacy has not kept pace. Many young people today take jobs with salaries far beyond what their parents earned. They also begin to live a lifestyle they believe fits that income, including cars, boats and luxury vacations. Many realize too late that what their parents have is the result of accumulation over years of hard work. The younger generation discovers their income cannot keep up with their spending, and they fall into debt. In the worst cases, these bad financial practices can eventually lead to broken marriages, families and futures. Sadly, this is an epidemic facing the majority of our nations youth and is an issue often overlooked. Its time to step up to the plate and help our youth grow into their full financial potential by guiding and educating them before life changing decisions need to made.

Most every high school graduate in America will endure the process of applying for a loan, buying a home, financing a car, or applying for a credit card. Yet, how many of these students know about 401ks, how a credit score effects loan approval, or understand the difference between fixed and variable interest rates. So many Americans are forced to learn these concepts by experiencing the backlash of financial blunders. Often times when making a big financial mistake it takes months to fix and even years to get back to the same financial situation you started in. This is completely avoidable with the right tools and education.

I left the mortgage industry at its peak when unlicensed loan officers, brokers, and consultants were making bad deals and taking advantage of homeowners on a regular basis. My breaking point came when a couple in their late 70s wanted to refinance the home they had lived in for over 40 years and was nearly paid off, to take out a small portion of their equity to help their grandchild through college. What was proposed to them was a double mortgage that extracted all of the equity out of their home when its value was over inflated and at its highest. The market bubble burst and house prices dropped. That couple now owes more than what their home is worth and cannot refinance because of the negative equity all while on a fixed income. This is when I realized there are too many people who do not have the proper knowledge to make informed decisions and things have to change.

As a Miss Arizona delegate I plan to launch a campaign to increase the average high school student's savvy about personal finance and investment. Im starting to fulfill my mission by convening a committee of educators, legislators, business people, and school boards members to ratify the state mandate that all high school seniors must take an economics class. My goal is to implement a statewide personal finance program available to all high school juniors and seniors. A key component to change is support. My plan also involves gaining financial support to supply our teachers with the right program and materials to set their students up for financial success.

Holding this title is a great opportunity to be a figurehead for this platform and shed light on a practical issue that affects nearly everyone. Additionally, I would benefit and promote the Miss America Organization by showing that a young woman can spearhead a financial and economic movement that is stereotypically left to an older demographic.

 

[Okiemommy]

Personal finance was taught at my highschool as an elective as well. I took it, and I think it did me some amount of good, but like someone already mentioned it should have been something my parents taught at an early age.


Their other mother:

That is great! I love the things that the pageant contestants spearhead. Our last Miss America was and still is involved in internet safety (which you may already know b/c you are familiar with the contests)
You did good Momma!

 

[Rosalind]

Mostly because schools don't have time to teach everything.

I went to private school for HS, and the way they taught finance management was this: You had a school-controlled checking account set up by your parents at the beginning of the year. It didn't have to be your parents' money, you could put summer earnings or what have you in there too. The school secretary issued "checkbooks" that could only be used in the school store. Out of this account, you bought textbooks, school uniforms, school supplies, and very basic toiletries, plus any goofy school pride type of things (stickers, t-shirts, etc.). You were expected to balance the checkbook and the school required that a certain minimum deposit be added at the beginning of every year so you wouldn't be able to complain that you were out of money for basics unless you were truly awful at money management.

It sorta worked. At any rate, the kids whose parents spoiled them didn't learn much, but I'm guessing they didn't need to either.