Could Personal Finance Classes & Training Save our Country?
In my entire public school education and as a citizen of the country, I was only taught how to do two things that were somewhat related to personal finance.
1. How to balance a checkbook. Ironically, this was taught to me when I was in third or fourth grade. How many 10 year-olds have a checking account? Of those that do, how often do they need to balance them? I’m not sure how this lesson was supposed to stay fresh during the 8 years in between when it was taught and most people actually begin to manage a checkbook.
2. The second experience I had with a personal finance topic was during a freshman ‘intro to business’ class I had in high school. For the class, we each picked a few stocks to track over the semester. I remember that there wasn’t any real valuation analysis going on, just some random stock picking. Most of the students went with the bing brand names out there that they actually had personal experience with – Coke, McDonalds, Wal Mart. Now that I think about it, had you bought those stocks back then and held onto them, you probably would have significantly outperformed the market.
Later, in college, I took a Finance course as part of business major that I graduated with. It was more of a corporate finance class than personal. Also, it was part of my major’s curriculum versus a required course.
Years later, I look back on this lack of a personal finance education as a potential root of the financial problems we are now facing. Here are the seven topics that I wish I was taught in high school and I think the entire country would benefit from if taught on a mass scale.
The 7 Personal Finance Topics that could Save our Country
1. Budgeting 101
This includes everything from how to create a budget to cash flow, savings within a budget, and how to maximize net income. Truly a shame that this is never taught – and it’s a huge reason why, as citizens of this nation, we have struggled so greatly to stay out of debt.
2. ROI for Various Post-Secondary Degrees
I had no clue what major to declare or what I wanted to be upon high school graduation. A little more information into the earnings potential of different professions and post-secondary degrees would have been extremely helpful.
3. How to Build a Healthy Credit History
Perhaps this knowledge would prevent college students from avoiding all of the credit card sign-ups to get a free t-shirt or beach towel from the guy standing on the corner before a football game. It usually takes years of strong history to build a good credit rating and the decisions you make early on have significant long-term consequences. How many people in this country know absolutely nothing about credit history and credit scores? I’m guessing it’s a large majority.
4. Home Ownership 101
It would have been great to learn about the costs and benefits of home ownership versus renting, what are mortgages, what are the expenses involved in home ownership, what kind of things should you look for in a home and so on.
5. Finances & Career 101
Topics in this area include how to get experience in and after college, how to build a resume, how to interview, how to negotiate salary, how to build transferable skills, and much more. This would have been immediately applicable to those who went straight into the workforce vs. college entrants, and food for thought for the college crowd.
6. Frugality 101
Anything and everything surrounding how to save money in all aspects of life.
7. Saving for Tomorrow
401k’s, IRA’s, annuities, savings, investing, Social Security, and so on. Perhaps this would lead to much fewer people being completely reliant on government money in the golden years of their lives.
Why Isn’t a Personal Finance Taught in School and in our Society?
Perhaps public school curriculum has changed since I graduated. If any teachers read this blog, I’d love to hear your thoughts on why personal finance is not taught in our schools. My conspiracy theory thought for the day is that the Department of Education has been lobbied to leave personal finance out of education because the decision makers in government know that the American economy has been completely driven through consumer spending and debt. If that’s the case, is it any wonder why we’re in the situation we’re in right now? It’s time for the nation to step up and provide personal finance basics teachings to everyone.
Update: I recently reviewed new data that casts doubt on whether personal finance should be taught in school.
Personal Finance in Education Discussion:
- What personal finance topics do you wish you were taught in school?
- What did you actually learn in school about personal finance?
- What teaching could get the nation back on the right track?