Financial Education in Schools

[tea4me]

What do you think schools should teach kids about finances?
Modified from:
Do you think teenagers are smart enough to realize their parents are living off of subsidies from grandparents or social services? I often wonder who is going to support these kids when they are adults. Their parents are still being supported by others - i.e., living in house owned by grandparents, state health insurance, energy assistance, etc. It's a generational thing. When does the gravy train end?

(This is sort of a spin-off of teaching kids about money.)

[haapai]

I think the kids figure it out some time in middle school. If their grandparents don't let the cat out of the bag by then, their schoolmates will be sure to tell them.

A surprising number of those kids break free and don't talk about their childhoods much.

I've always wondered if the oldest child had the best shot at breaking the cycle.

Considering how kids from the wrong side of the tracks were treated in at least one school that I attended. I'm not sure that there is much that schools can do to break the cycle. The poor kids and the kids in foster care were so relentlessly picked on by their peers that it would take an exceptional teacher to first relax them to the point that learning could occur, and then, somehow, impart some useful knowledge or suggestion.

[BeenThere...DoneThat...]

...Consumer Math was removed from our high schools in the 80s... not a wise move, imo... I think it should come back to 8/9 grades... but ultimately, the burden of learning falls to the recipient... and if education doesn't occur at home beyond school, they're swimming upstream...

[Poppet]

Do you think teenagers are smart enough to realize their parents are living off of subsidies from grandparents or social services


Not unless their parents tell them. Most teens don't have a clue. Most parent's...no...most people were hiding the fact that their "wealth" was fake until it all came crashing down.

And I was so clueless as an adult. I remember those housing heyday years that we just had (2004, 2005, 2006) where ordinary people who earned ordinary incomes were moving into some huge McMansions and had huge SUVs for each adult.

I remember dh and I just feeling so dumb and asking "where are these people getting the money to buy these things?" and here's the kicker:"what are we doing wrong that we can't have those things too." I remember asking that question!

We knew nothing about whacky mortgages until maybe 2006 when our friends were bragging about what a great deal it was. It never occurred to us to borrow and borrow and borrow. Needless to say we never opened a HELOC. Eww!

My own parents were economic outpatients. Again, I wasn't in their financial business so I didn't know.

My siblings are older and they shared stories about our grandparents buying them school clothes and shoes. Especially shoes. And Christmas presents.

Yeah, my parents were financial lamers.

[Poppet]

I've always wondered if the oldest child had the best shot at breakin

I don't think it's birth order. My oldest brother is the worst when it comes to money.

He has borrowed and borrowed and borrowed from my parents and has nothing to show for it.

This last Thanksgiving we sat at the table giving my oldest money advice and he and his wife told my son that he has to maintain a balance on his credit card in order to build a credit history.

I have to undo that little training session.

[Tred]

I'd like to see a Consumer Ed unit be required for ALL students (part of math classes maybe) whose complexity is tailored to the level of the class. It may still be offered as an elective, but considering all the other *required* courses in high schools, some financial education should make the cut also. I took calculus, AP physics, etc... in high school, but was never taught anything about personal finances. Despite having a part-time job during high school, I had no concept of how expensive our mortgage was, for instance.

As a minimum, It would be useful to teach a unit where students are given some simplified employment scenarios in order to get a handle on how a certain salaries correlate to lifestyle costs. Something along the lines of:
Have students research average salaries for widely varying occupations: fast-food cashier, physician, auto mechanic, attorney, college professor, etc...
Provide them with tax tables so they can calculate take-home pay for each of these jobs.
Research COL expenses, and create monthly budgets for each of the hypothetical employees.
Based on those budgets, project how much money each person would have saved if they kept the same income/budget for X years.

I recall reading an article that said a very large percentage of high school students think they're going to become "rich". Some real number-crunching could help them get an early feel for what's actually required for that to happen. Of course it would be great to extend the lessons and teach about the risks & benefits of different types of investing, how loans work, welfare programs, etc... but that would depend on the different ability levels of the students being taught.

[dragonfly7]

Tredmil, my high school required that class of all sophomores even before it became a state requirement (MO), and nearly that exact scenario was covered. We each were assigned different careers and family types and then set our budgets. Next, we each received a life-changing event like a job loss, promotion, children, etc. and had to figure out how to adjust our budgets accordingly. We also learned how to balance a checking account, fill out a 1040-EZ, fill out job applications, and create cover letters and chronological resumes. Then, we took three different career assessment tests, including the ASVAB, and spent a full day job shadowing someone in fields we matched. I actually really enjoyed it.

That was a semester-long class. The other semester was more like advanced Computer Applications with assignments like business document or letter formatting. Significantly more boring that the other half of the class.

On the downside, the teachers for that class expected every student to attend college regardless of whether he or she belonged there and fully believed none of us should ever accept less than $30,000 per year once we had those Bachelor's degrees. A decade later, I'm hard-pressed to find a job requiring a generic degree that pays that much.

[mandyms]

I definitely think they should teach this in school. I really had no idea about finances until I got into financial trouble and was forced to take a look at everything.

I also think that home-ec should be a requirement as well; I think a lot of our obesity problems could be helped if people knew how to cook rather than being dependent on fast food and frozen dinners.

[Urban Chicago]

I would love to see a financial education class in high school. However, I do see some problems:

1. Schools already are supposed to teach so much, I don't see how they could add another subject.
2. What they do teach is often taught poorly.
3. It could backfire. Anyone remember the scene in "Precious" where's she's calculating the actual hourly wage of a job she was offered and realizes it's a big step down from welfare? Since that scenario is all too real, maybe you'd get even more kids aspiring to welfare?

[Tred]

Dragonfly7,
That's really great to hear that financial topics are actually still taught somewhere on the high school level.
From what you described, it sounds like it could have been better if the teachers had been a bit more matter-of-fact with the material instead of imparting their own opinions about job prospects.

[NomoreDramaQ1015]

I don't think unless there is follow-up at home that teaching finances in school is going to help a ton of kids. It might help some but I went to school with enough kids that would say "Well my parents don't care what grade I get" when they'd do poorly in a class that I don't think they would have had any lightbulb moments in a finanical class if their parents didn't reinforce at home.

I think it would be better to teach it and hope it sinks in, but in general I think that along with anything else to do with education unless the kid is particularly self motivated, if there is no follow-up from the parents it's going to just be one more credit requirement before graduating.

[haapai]

I recently read a description of an elementary or high school budgeting exercise in which all students were given a gross income of $5000 a month and a family. Does anyone know where to find it?

I'd like to rip it to shreds as an example of not particularly timely or relevant financial education. It would be a long time before those children had that much income to allocate. Giving kids too much income in their pretend futures seems to be a common flaw.

[caddy]

My high school Economics class had a personal budget project like that, but I don't think it was too helpful. It's not real until you've lived it. I don't think we should turn high school econ into personal finance either.

I agree with a previous poster about home economics. I could've used some kind of beefed up home ec class or life skills or something. I can't tell you how many times I've had to consult ehow.com, that site that teaches morons like me how to do mundane tasks. I just bought a house (foreclosure) with a broken window. I thought maybe I could save money and repair it myself... until I found out there are 40 steps to fix a window and each one seems way above my ability.

[Mardi Gras Audrey]

We used to have some of that in 8th grade (mid 1990s). I remember that we had a class that was half a semester called "Life skills". It didn't deal with taxes or investing but we did get to build a budget. I remember that we had to bring in the newspaper and look at the job listings, apartment/house listings, and grocery ads. We had to develop a plan for a week's worth of meals for an imaginary family of 4 (two adults and 2 children-one who wasn't in school and one who was in elem school) Each meal had to be balanced (4 food groups?) and the food costs had to be under a certain amount per day. We also had to look at the costs of shelter in our area and match that plus the food costs with the salaries that the job listings were paying. It was a pretty eye opening class. Shattered the dreams of many who thought they could get a job at a coffee shop and afford an apt like Rachel's on "Friends". I wonder if my old school still does that class....