Should There Be Mandatory Personal Finance Classes In High Schools?

Basic Personal Finance Know How Is Lacking

In the time I’ve been writing this blog I’ve come to realize something through the comments on the posts, the questions I receive via email and the searches that people use to reach this blog.  A lot of people just don’t have a basic understanding of personal finance.  They don’t know how to setup a budget, they don’t understand the benefits of investing and saving, and they think that debt is a normal way of life that everyone just has to live with.

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Part of the reason that I write this blog is because I feel like I have some good things to say, and that I can help people to gain a better understanding of their money and how to manage it.  But I can’t help everyone (I wish I could)!

After reading some posts on other blogs, I began to wonder if it might be a good idea to start teaching our kids the fundamentals of personal finance at an early age, before they have a chance to completely get themselves in debt, and create a situation that they’ll regret.

Should we be teaching personal finance in the high schools, or even earlier?

 photo credit: DownTown Pictures

Stats Show That Education Is Needed

personal finances classes mandatory

The stats showing just how bad most people need a financial education are pretty staggering:

  • The average college student is now more than $20,000 in debt at graduation. (source)
  • Total  consumer debt in the United States stands at nearly $2.6 trillion dollars. That works out to be nearly $8,500 in debt for every man, woman and child that lives here in the US. (source)
  • Nearly one in every 35 households in the United States filed for bankruptcy in 2007. (source) Tons are signing up for debt consolidation loans. Could it be even more now that times are tougher?
  • Roughly 2.0 to 2.5 million Americans seek the help of a credit counselor each year, mostly to avoid bankruptcy. (source)
  • As of April of 2009 consumer revolving credit, mostly credit card debt, stands at $931.0 billion. (source)
  • Students are much more likely to pay off their balances, however, they tend to pay late and exceed their credit limits more frequently than other groups and therefore incur more fees than other groups. (source)

Americans are in debt, and for many of them it leads to bankruptcy and financial ruin.  I think it’s pretty obvious that a good majority of Americans need some sort of financial education.  But what type, and where should they receive it?

Should The Schools Teach Personal Finance, Or Should It Only Be Taught At Home?

Like a lot of subjects, ideally personal finance should be taught by parents to their children from an early age.   Flexo from Consumerism Commentary posted a comment about this, stating that the schools are already chocked full of classes, and this one isn’t one that should be taught in schools, but at home:

If students aren’t getting the money management education they need, don’t blame the schools, blame the parents. These skills could be easily taught in the home by parents with even the most basic knowledge.

In some homes that is probably happening, but looking at the statistics we see that this probably isn’t the case in most homes.   In fact, most parents probably could use some education on the basics themselves.   I think we need to consider something else.  So what is the alternative?

Many people are suggesting that we should start teaching a course on the basics of personal finance in either the junior highs or high schools.  The course could be either an elective or required (hopefully required), and would cover a variety of personal finance topics designed to give the students a good solid foundation and understanding of how finances work once they leave high school.  Another user crystalized my thoughts on this:

It is the responsibility of schools to prepare students for the real world. Every level of education is preparation for the next step and high school leads to the real world. It does not necessarily need to replace any core academic classes. It would be in addition to those classes. Students are allowed many electives and the benefit of understanding finances can help them with a strong start in their future.  Imagine if students left high school with a strong grasp on interest rates, investments, assets, liabilities, student loans, credit cards, taxes, etc. They would not only improve their own economic strength, but in turn would improve the US economy by being investors.

What Subjects Should Be Covered?

I think the subject of what topics should be included in this personal finance curriculum could be up for debate, but here are my vote for things that should be covered.

  • How to do a budget
  • How to balance a checkbook
  • How to save and invest, and the power of compounding returns
  • Credit Cards  and Debt
  • Loans, Mortgages and Real Estate
  • Insurance

These are just a few ideas of topics to get started, and I’m sure there are more that could be included.  What are some things that you think should be covered?

Would It Make A Difference?

Personally I think getting something like this implemented in the schools could have a huge impact on people’s lives, helping them to understand that their financial actions do have consequences.  I know if I had been through something like this I could have avoided making some of the mistakes that I made as a student and young adult.

Would we be able to get something like this passed and implemented in the schools?  I’m not sure that we could – it just makes too much sense for the folks in Washington.   Better to keep people uniformed and dependent on the government?  (That’s about as political as I’ll get on this blog)

What are you thoughts on teaching a course on personal fianance in the schools? Would it help?  Could we truly make a difference by educating people to make good financial choices?   Or do people just not care to know about these topics?  Tell us your thoughts in the comments!

UPDATE: I’ve been told that Oklahoma already DOES have a required personal finance curriculum.  Check it out here.  Who’s next?
UPDATE 2: I’ve been told now that Texas already does this as well!  Read about it here.  See, I had a good idea!

Last Edited: 16th April 2013

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  1. says

    I think that it should be covered in the homes and in school – they’d just reinforce each other. The classes wouldn’t need to be that in-depth either (unless you get students who want to take something like AP-Personal Finance or something). Just cover the basics of budgeting, saving, planning, credit cards, etc. and most people would learn more in a semester of high school than in 10 years of adult life.

    Jeff@StretchyDollars last blog – Household Shopping Made Easy

    • says

      Agreed. Kind of like all education — it should be taught at home and at school as a form of reinforcement.

      Imagine how better off we would be if all of our peers had gone through personal finance courses. We’d have to blog about something else… but thats A’ok with me.

      MLRs last blog post..Cash for Clunkers: Is It Worth It?

    • says

      I just read last night, actually, that the State of Tennessee requires these classes, too – I think I retweeted it from someone. The article mentioned one particular county, but I think it was implied that the whole state decided this. Maybe someone else can confirm. Personally, I think it would be valuable and important as a required single course. After that, perhaps some students could elect to take more advanced versions of it if they wanted. But everyone should need the basic course. The only question, then: who teaches it? Would you want Suze or Dave to teach it? Or a B.Ed. grad who hasn’t read many PF books or is even out of debt him/herself, or who doesn’t care?

      MoneyEnergys last blog post..Michael Jackson Money Management – Just Budget!

    • johnny11 says

      yes jeff! one semester of right ways would far outweigh ten years of mistakes, mismanagement’s and bad ideas. except i’ve been doing it sense class of 78 and i am just now getting professional help. the techniques she is teaching me are so simple.
      if thing go as planned, i am hopeful to be back on track and debt free within a few months. hopefully i can start stockpiling some cash before the years end.


  2. says

    Something as brief as monthly sessions on balancing a checkbook, managing a budget, and understanding a credit card statement would go a long way in educating and improving financial understanding.

    corrins last blog post..June 21 thru 24

  3. says

    Yes! I wish that I was taught something like that when I was in school. I think everyone graduating from high school should know the basics on budgeting, bank accounts, credit card interest, importance of staying out of debt, saving for later, and a realistic look on how money operates in the real world. Unfortunately most people learn those things the hard way but perhaps things would be different if it was taught at a younger age.

    MPPs last blog post..Country Music & Money

  4. says

    You’ve got some GREAT things to say Pete! ;-) This post is definitely one of them.

    I’m a big proponent that parents should be the ones teaching children about finances. I believe in involving the children in every day decisions and chores regarding money, so they can learn in real world situations.

    Children are encouraged to play & have fun more than they are encouraged to learn responsibility & morals… although I think a child should definitely enjoy their childhood, there needs to be more of a balance struck between fun & responsibility that will hugely benefit them as adults.

    The fact that young adults rush into debt so quickly is a testament to the failures of parents to adequately train their children in the ways of fiscal responsibility. This may be attributed to the fact that the parents themselves were never properly versed in the ways of monetary wisdom, rendering them unable to properly train up a child in the way he should go?

    I think it is painfully apparent that we need to educate the parents first, then we can let them pass on their wisdom to the children.

    All that said, I do think simple personal finance classes should be mandatory. The most important in my mind would include, “How to create & follow a budget”, “How & why you need to spend less than you earn”, “The power of compounding interest”. Simple concepts like this would be beneficial in any learning environment.

    Matt Jabss last blog post..Identify & Overcome Money Anxiety & Stress in Relationships

  5. says

    If I could screen the teachers then I would say yes – add it to the curriculum . As you noted there is a lot of ignorance about personal finances. Likely, those people would teach our kids. We might end up worse off than we are now! The classes would likely focus on credit cards, auto loans, and home loans. Not the important principles of finances like saving, budgeting, giving, and sacrifice. Hmmm. Will there be a day when I will need to take my kid out of a personal finance class????
    Thanks for the great post. I enjoyed it.

    Craigs last blog post..*NEW* Bible and Money Page Added

  6. says

    I think its important to educate kids at an early age and definitely think it should be a requirement. I remember in the fourth grade Comerica Bank came to my school and helped us all to open bank accounts. We were taught how do make a deposit, how to balance are accounts and so forth. Once a week we had the option of making a deposit and it was done at school as a group thing. In the 6th grade I was taught about checking accounts and how to balance a check book. I distinctly remember both of these lessons because the things I learned still stick with me today!

  7. says

    I have been a big advocate for implementing this in the high school curriculum many teenagers and young adults do not understand simple financial concepts and how debt works. The problem will be designing the curriculum and finding right teachers for such a program, but the American public is in definite need of finance education!

    Rays last blog post..Understanding ETF- What is an ETF and How Does it Work?

  8. says

    Hi there,

    I vaguely recall a little bit on personal finance in public high school, and very little at home. As a young adult, I realize this was sort of a miss on both parts of the equation. I’ve had to basically teach myself many of the basics with informative blogs like this, the help and advice of friends, etc.

    It’s so important to drill down on the basics (like budgeting, seeing where you’re spending and making changes to your spending habits, cash flow, etc.) early. With the economy changing rapidly, and free services that make it easy, there’s no excuse not to touch on finance a little in both places.

    Good post Peter!

    – Chelsea, Quicken

  9. says

    I was taught the importance of interest rates in high school, and my parents taught me pretty well about the basics. Most importantly, they allowed me to manage my own money. Even Christmas gifts were comprised primarily of stuff I picked out “adding up to X dollars”. Still lacking were knowledge of how to properly organize financial records (e.g. balance a bank account, know when to change the budget and when to stay the course, etc.) and a firm sense of how to use money in the adult world.

    I firmly believe that good financial practices should be taught in schools, though I offer no solution as to how. I think hands-on experience should be part of it for sure. Some sort of microcosm involving play money and natural consequences of decisions with said play money would be best. Video games have the greatest capacity accomplish this, but SimCity is the only game series I know of to require serious budgeting concerns, etc.

    A course specializing in finances should cover the topic more in-depth than Crown’s or Dave Ramsey’s basic materials offer. Personally, I want to approach finances as more of a science than I currently do.

  10. says

    I have mixed feelings on the subject. I may be in the minority, but if you asked me what I learned in high school, I wouldn’t remember a thing, really. I have a belief that school teaches you a mindset, skill set, and a way of tackling problems – not hard knowledge. Okay, so sometimes that’s not true. But maybe some of you agree?

    I think personal finance is best internalized by “doing,” not “learning.” Unfortunately, that’s where parents have the most control, not the school. I doubt a PF class in high school would have saved me from any of the mistakes made through the next 10 years. I learned the hard way, and by learning from others.

    Having said that, maybe it’s not such a bad idea. If it saves even one kid from doing something financially stupid, it’s probably worth it.

    Wojciech @ Fiscal Fizzles last blog post..The 7 Habits of Personal Finance – Part II

  11. says

    I honestly don’t believe it would hurt at the very least especially balanced with some of the things my kids are taught in school. For me personally it would have been a huge benefit and I might not be in the place I’m at today which is snowballing’ a giant ball o debt. But we’re making changes because we’ve seen the light. Will a highschool kid see the light? I don’t know but if it’s reinforced both at home and in school all the better. Insiteful article.

    Paul @ FiscalGeeks last blog post..Manage Your Passwords and Protect Your Identity

  12. says

    I believe New Jersey passed a law last year about this too.

    I’m teaching some financial literacy to middle school students as part of a job training/readiness program at the school. Most of the kids don’t get it from anywhere else. Our 6th graders go to Junior Achievement’s Biz Town every year and there is a small section on check writing, etc that is involved in that, but other wise – nada.

    crossn81s last blog post..Strawberries

  13. Meoip says

    Just what we need the money pit’s we call schools teaching our kids how to handle money.
    I can only think of 2 teachers I had who would remotely qualify to teach these classes. In many areas by high school you need to have specialized in that department’s subject matter to teach it. It would be a tough choice where to put these classes. Since money management is part math and part sociology I’m not sure where you can put it.

  14. Kevin C says

    I do believe that schools should put more emphasis on personal finance. I mean most people have no clue about credit cards, interest, credit card rewards, grace periods, student loans, and most people have no clue where to begin budgeting at.

    I know I have been learning on the fly and experimenting which is one reason I am starting my new blog to discuss my experiences with personal finance and hopefully get a good discussion of ideas and techniques going.

    It’s too bad students are going out with NO CLUE how to handle money

  15. Mary says

    I don’t know if I would’ve remembered, but I know I learned by trial and mostly error! Not much info from parents or school. Dave Ramsey has a class made up just for High School students that can be done in the schools. I have a friend that teaches what used to be called Home Economics, she teaches budgeting and balancing, but is not required in MO.

  16. says

    In a word YES!

    Too many kids don’t think about this stuff nor fo they have any other sort of uniform training or exposure to it.

    The reality is that Personal Finance is THE MOST IMPORTANT topic a student can learn. Heck, a civil servant making near minimum wage died recently and left an estate worth roughly $1 million. WOW. That tells me that PF can be a foundation for successful living regardless of your income level or career track or any other external measure of success.

    Great topic,

    Do You Dave Ramsey?s last blog post..Be in the Business of Being Yourself

  17. Olivia says

    It couldn’t hurt to learn it in school. My parents used the “we don’t talk about it” parenting method, so learning by trial and error on my own without any framework has been needlessly time consuming. I’ve tried to teach our kids life skills. It would be great to have these reinforced from another source.

  18. says

    I too believe that it should be taught in school. Maybe the teachers could send home an outline of stuff they talked about so the parents could review it with their kids. My parents didn’t teach me much about money. I believed that the ATM was a money tree until I was in 4th or 5th grade… sad. I now have a load of student loans that are in grace – I know for sure that I would have benefited from a school finance program.

    Kristins last blog post..How to Compost and What to Put in It

  19. Taylor says

    I am a high student in Florida and involved with student government. Every year we come up with a resolution to present to the Florida legislatures, and this year I want it to be a resolution concerning the requirement for high school seniors to take a personal finance class. I am a junior and would really love to be able to take a class like that. Sadly my school doesn’t offer one, but I hope to change that!

  20. johnny11 says

    YOU HAVE A FANTASTIC IDEA. i found your blog simply because i was searching curriculum on this subject. i am a 55 year old male, living on a limited fixed income. i am currently having to seek professional help to budget my personal finances, because i was never taught how! this is appalling that there was never a personal finance class. sure i can add and subtract a check book register when i am diligent enough to list everything. it still amazes me that i went all day WITHOUT using any algebra or geometry. time well wasted on unnecessary information instead of spending it on valuable tools.

    OH! here’s one more kicker. when i was in 6th grade(mind you this would have been in the early 70s and planned parenthood clinics were popping up all over southern california) the school district, (in all their wisdom), decided to host a sex education class. a 1½hr one-time after class event. we all had to bring parent signed permission slips to attend. most parents, including mine, were very upset. i did get to go. it was clinical, boring and very disappointing in the picture department, for a 13 y/o boy.

    the only financial advice i remember are mantras and cliches
    A penny saved, is a penny earned
    dont spend it all in one place
    dont take any wooden nickles (really? has anyone ever seen a wooden nickle?)
    got a hole(or fire) in your pocket?

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