Did You Learn Anything from School About Personal Finance?
Posted by Cap in Even More Ramblings |
Remember back during your high school economics class, where you strolled into the school’s computer lab (or equivalent) and your economics teacher proceed to tell you and the class to pick various stocks, in some surely well-thought out plan to teach you about the stock market?
Yeah, that’s about the only thing I remembered from those “stock picking” lessons too. In fact, I can’t even recall what stocks I picked. So much for learning about the market and investing.
Like the other high schools in the local school district, my high school didn’t have a personal finance class. I always assumed this was the case across the country till I read more on the subject in recent years (turns out my district was just more ghetto than I thought).
The debate on requiring personal finance classes in secondary school has been discussed on numerous personal finance blogs, and the usual question seems to be asking if these important life skills are the domain of the school or of the parents.
Personally, even if my high school had a personal finance class, I would have probably paid as much attention to it as I did with my driver’s education class (which was none at all).
Here’s the question: (Poll link for RSS peeps)
[poll=4]
The question and the poll can of course be much more detailed; such as if you had a personal finance class or not, and if you did learn something, was it just a little bit or did you learned a lot. But let’s keep this simple since my fingers are tired from all the typing (whew, 296 words, broke a few sweat there).
Feel free to share what you’ve learned, if any, via the spiffy comment form.
top photo credit: Corey Leopold
- Lessons From the Stock Market Game – FiveCentNickel.com
- States With & Without Mandatory Personal Finance – Jump$tart Coalition
- Financial Education: Are Schools Doing Enough? – GetRichSlowly.org
21 Comments to “Did You Learn Anything from School About Personal Finance?”
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October 6th, 2008 at 3:59 am
I didn’t get any personal finance education in school but in high school I did get a class field trip to the NYSE on Wall Street.
And I lived with a relative who had a lower middle class income, lived very frugally, and had a small portfolio of individual stocks. (He appeared to own about a dozen different stocks, of course I don’t know how much he had of any of them.)
He frequently gave me recommendations to buy IBM which was doing very well in the early 1970s and split a few times to remain affordable (it would split when it got up around a few hundred dollars, which was more than $1,000 in today’s dollars).. (Unlike Berkshire which has never split and will never be affordable.)
October 6th, 2008 at 5:18 am
I went to a very well regarded high school and never got any personal finance training.
They teach sex ed in school, why would personal finance be considered the sole providence of parents? Ridiculous.
I think mandatory personal finance is an excellent idea. Too bad it was not enacted 15+ years ago. We might not be in this mess if people relied less on lending “professionals” to tell them what they can afford.
October 6th, 2008 at 5:46 am
disgruntled: field trip to the NYSE sounds actually pretty neat (I’ve only roam around it and never went in). my econ teacher kept promising he’ll take us to the local FED vault, but that never happened. booo.
as for Berkshire, you can buy the class B (BRKB) nonvoting shares which is a lot more affordable than the class A shares.
Crowman: I thought about similarity to sex ed too (in that there should always be a balance of values from a parent and school/society). It would be pretty silly to have to sign a permission slip in order to learn personal finance though…
I agree that a mandatory PF class is a good idea, but I do wonder how much HS students will actually care. I recall there was this testing survey on high school students with and without PF classes, and unfortunately the percentage of students who pass the test (a low 50% or some such) is the same regardless if they had a PF class or not. Can’t seem to find the link to this survey, but I’ll add it to the post once I find it…
October 6th, 2008 at 5:56 am
I voted yes but really should have voted no because the only thing that we were taught as far as personal finances go is how to write checks and balance a checking account. Which has been helpful because I have always been able to do it. But I think that teaching personal finance principals or skills should at least be an elective and maybe a mandatory class. We teach everything else in school and most people grow up and move out into society without a clue and the examples they are following are poor. You can tell that alot of people in this country have poor financial skills and poor judgement and discipline by the number of Bankruptcies and government bailouts of all sorts. Many young people just do not have anyone close to them to teach them how to run a home finances.
October 6th, 2008 at 6:02 am
Response to cap, students not caring about the subject that they are being taught is pretty much across the board and nothing new. But that doesn’t stop us from teaching them other subjects like Spanish.
October 6th, 2008 at 6:23 am
I never really learned anything but I don’t think I’d really be opposed to learning about personal finance, kids learn what they’re forced to learn… whether it’s managing money or potty training. :)
October 6th, 2008 at 7:08 am
I used to teach Government to high schoolers and I would interject money into the discussion because I find it interesting. But I learned everything I know from my parents and I went to an excellent district, where there was no mandatory finance class.
Aside: I’ve just recently heard about Berkshire from my Smart Money subscription (free for a year, woohoo!) and there’s no way I’ll ever get a Class A share (I had wondered why it was so expensive) but I’m considering a B one. I don’t make much but I’m very frugal and most of my surplus cash is in a money market online or my retirement funds. So if I save I can get one soon.
October 6th, 2008 at 8:45 am
I remember learning in middle or high school how to balance a checkbook and how interest is computed on a bank account. In my pre-Calculus class we learned about the power of compound interest, but that was considered an advanced class so maybe less than half of the students took it.
October 6th, 2008 at 8:48 am
I learned it from family, but not directly.
Mom had me get a savings account and all that. But growing up blue collar (dad was a self-employed electrician), we had a very unpredictable, modest income.
Once I was old enough, I held jobs. At one point I had 3 at a time. My money was mine to do with as I pleased, and it quickly became apparent the value of my money.
I wasn’t handed stuff (like today’s kids), or money. I was forced to earn every single thing I had. If I mismanaged my money, it became very apparent I screwed up when I realized I had nothing to show for my sweat and exhaustion.
Combine that with a very self-protective nature, and my money smarts came about from my own desire to get smarter and my own sense of “I don’t need to keep up with the Joneses”.
I spend extravagantly at times, but it’s on a very very narrow range of items. And those items have been considered and reconsidered to death. I know what I’m getting and I know what I’m getting out of it.
October 6th, 2008 at 10:54 am
Hmmm . . . I remember a one-off lesson my senior year. Teacher said to plan one year of living broken into months. Presumption was that you lived at home, so shelter and food were covered. But everything else–prom, tuition, books, clothing, gas–had to be accounted for.
So I worked out my budget. I think I spent about $900 per month. I mean, free food and shelter??? What’s left?
The next day, the teacher said our budget was $1,200 per month. I think I was the only one who DIDN’T moan and whine about how I was to manage on THAT paltry sum.
So I started a savings account with the additional $$$. Got an A+ on the project.
But really, Eric has it right. Until it’s YOUR OWN MONEY, you don’t really understand what 14% compound interest on $100 will do to you; or what 3% per year on a CD really means.
October 6th, 2008 at 12:38 pm
When I was in highschool – years ago – we had to take an economics class. It discussed everything from how the stock market works to balancing your checkbook. In one project we were supposed to evaluate and purchase stocks.. That started at the beginning of the semester. We were given some time and guidance on how to research stocks and then each “bought” $5k of stocks. (make believe of course) The team whose stocks had made them the most money over the semester got a free A on a test.
Though an economics class, we did a section on personal finance including retirement saving, saving for houses, how to manage personal credit, etc. Pretty good class.
October 6th, 2008 at 2:46 pm
Not really.
I think my high school economics teacher wanted to teach that sort of thing, but the way he went about it was… Well… Stupid.
He had us do this series of projects where we had to go out and do/find out about real world transactions. Sounds good on the surface, doesn’t it? The problem is he didn’t pick things like open a savings account, apply for a mortgage, etc. Instead we did things like learn how to ride a city bus and learn how to make funeral arrangements.
Now, I’ll admit that I’ve lead a charmed life, but I have not ridden a city bus since then and I haven’t planned any funerals. So, it might have made more sense if we’d gone out and compared the best rates on mortgages or something.
October 6th, 2008 at 7:59 pm
Well, if personal finance is a course that should be mandated. Then, a qualified teacher should teach it, or at least someone with a reasonable track record of handling finances responsibly. I’m not sure I’d want my child learning finance from a social studies or English teacher who doesn’t really have a clue about it. Wouldn’t want my child learning that when you max out one credit card, all you have to do is fill out a form and get another one. Not saying there aren’t qualified teachers, but, they should need to prove it if the education is mandated. For now, I’m happy to impart my knowledge and take responsibility for my child’s financial education.
October 7th, 2008 at 10:18 am
I did take an economics class in high school. One of the lesson plans called for us to play the market with 10,000 dollars of funny money. I picked Berkshire Hathaway and a couple of others…sometimes I wish that had been real dollars
October 8th, 2008 at 12:46 pm
I’ve always felt like I did learn about personal finance in school because I learned to read and I learned to do math. For example, although we never specifically used a checkbook register, when I opened a checking account, the instructions that came with the checkbook register showed me how to use it and I knew how to add and subtract and that I wouldn’t want any answers from my checkbook to go negative!
The main thing I didn’t learn in school were options. People don’t know all their options, only what they’ve seen and heard about. So they learn things from commercials, which are trying to get you to spend as much money as possible, and from their parents and other people, except that finances are almost a taboo subject.
I still wish I knew about more options: What broken things are fixable? How can I diversify more (stocks AND bonds are only two baskets)? What are more ways to insure myself (besides insurance companies, savings, government plans, paying off a house, staying out of debt, friends, relatives, social groups, and church)?
October 9th, 2008 at 4:29 pm
Thanks for sharing guys. Quite a few people got the balancing checkbook lesson, and I kept trying to jog my memory to see if that was ever covered. Although Debbie does make a great point that general education in reading and math skill can help you handle basic personal finance task.
But it really is about more learning the various type of options and paths a person can take to reach financial independence.
Ditto on Eric and Spike’s point that until it’s specifically your money, you may not care enough to learn all the ropes.
Coop also nails it that just because the courses are mandated doesn’t mean there are qualified teachers that can impart the right knowledge — of course that’s another battle for organization that tries to have the initial mandate in the first place.
October 10th, 2008 at 2:42 pm
I am a high school senior and have gotten no such education. Useless.
October 10th, 2008 at 6:06 pm
I am also a high school senior and am taking Personal Finance right now. I love it, and it has taught me a lot.
October 14th, 2008 at 11:22 am
I learned that the stock market is cyclical. What goes up, must come down, and what goes down must come up. I think a lot of people need that lesson right now.
October 15th, 2008 at 8:53 am
Jim: Saying “kids learn what they’re forced to learn” implies “kids only learn when we make them learn.” That’s a dangerous thing to assume, and it’s at the root of what is wrong with the American educational system. I’m convinced that most people who formulate school policy in this country either are not parents or are parents who are not raising their own kids. I myself have had two kids and it wasn’t until the second one that I realized just what great learners children really are–but I’m at home with the second one, and I wasn’t with the first.
So these pointy-headed geeks are going around assuming the exact opposite of child nature. Children WANT to learn. It’s their *job.* We as a species do not have enough instinct to automatically know the right way to live. Compounded with the fact that human children have a longer period of helplessness and immaturity than any other critter in the animal kingdom, and you’ve got a species with young who soak up information like little sponges. They like most of all to imitate their parents; what we have left of instinct tells them their parents are the ones who are supposed to transmit culture to them.
School interrupts this process, and is founded on incorrect hypotheses of education to begin with, AND shares many traits in common with prison. And kids aren’t dumb. They know they’re in jail eight hours a day. Some of them, the social outcasts, know it consciously. They respond accordingly by acting out all the psychotic little behaviors you see prison inmates engaging in so that they can psychologically cope: the suckups, the run-of-the-mill conformists, the rebels who are punished so as to “make an example.”
I think what would turn personal finance around is if the work world changes enough so that parents can actually raise their own kids most of the time, AND model good personal finance behavior. That is important. Kids can smell hypocrisy at fifty paces. I think a lot of what makes them reject PF classes in school is that it’s not *real* PF they’re doing. They’re playing around in workbooks and addressing hypothetical situations at the hands of an adult to whose actual PF habits they are not privy. Contrast this with the behavior of a two-year-old who grabs a pen and scribbles on the wall because he just saw his mom writing with it five minutes ago and wants to be like her.
Treat children like adults-in-training (not like adults–an important distinction), give them real-world problems to solve, and watch how many of them light up and follow along. The younger they are when you do this, the better. It also helps if schooling has not yet beaten the desire to learn out of them. Personally I’m astonished that I retained as much of my inborn curiosity as I have, despite years of being yelled at because I read books in class, even though I knew I could get an A in most of my classes without listening to my teachers more than the minimum.
For my part I learned a little about finance from accounting class my senior year, but just the nuts and bolts; it’s like the difference between auto shop and driver’s ed. I also learned a little bit about the stock market in Current Affairs class in junior high. And that was it. Nobody ever explained anything like retirement to me; my father was career Navy and could look forward to a check until he died, and it was assumed I might be career military or marry into it as well. That’s another thing about kids: Never, ever assume how their lives will go. Give them a basic set of tools for making it no matter what they choose.
October 15th, 2008 at 11:39 am
We had a project in middle school where we had to build a bridge using toothpicks. We had a budget and a checkbook and had to write checks to procure all of our supplies. We couldn’t go over budget and we had to maintain our checkbooks. In high school we had to lug a “baby” around for a week and come up with a budget for how much things like diapers and transportation and stuff would cost. We were supposed to learn how hard it would be to make ends meet as a parent, but everybody did the same thing-called the bus station to find out how much a bus pass would be (even though we all lived out in a rural area where there was no bus service) and call Costco or Sam’s to find out how much diapers in bulk would cost. At some point in time, I do remember learning about compound interest…
These were good efforts, but I think the best lessons I learned were from having a job and having to pay for things like gas, insurance, my car payment, etc. while I was still in h.s. If I couldn’t afford those things, I couldn’t drive anywhere, and that was a DRAG!
I agree with what a lot of other commenters have said about parents needing to be responsible for teaching their kids good PF skills, but the problem is that, in a lot of cases, nobody ever taught the parents either. As Dana (#20) pointed out, kids will learn from what their parents do, and if their parents have terrible PF skills, the kids probably will too.
My husband is ex-military, and he was always shocked by the lack of money skills some of his airmen had. These kids were 18-, 19-years old, living on their own, making a salary and responsible for all their own expenses but didn’t understand things like how to use checks or why it’s a bad idea to buy a car at 50% interest. Maybe a h.s. class wouldn’t have helped, but I sure don’t think it could have hurt!