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!

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.

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.

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)?

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.

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.

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.

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.

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…

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.