Personal Finance Topics That Should be Taught in School

As a parent, I’m often thinking about things that kids need to learn as they grow up.  Manners, responsibility, making good decisions, andTeaching Personal Finance things of the like come to mind – among thousands of other things.  One of those “other” things would be learning about personal finance.  Along those lines, it got me thinking about what personal finance topics should be taught to everyone.

I think this way because growing up, I didn’t get any personal finance training in school.  Not that I recall, anyway! The closest thing to it was an economics class, where we had hypothetical stock investments.  But nothing about money as it relates to daily life, and how to manage it.  So while my education was pretty good looking back, that’s the gap that stands out at me.

What do you think younger folks – let’s say, high school seniors – should learn in terms of money-related topics?

Here is what I came up with: 5 personal finance topics that people should learn about when young:

  1. The reasons why we need to save money (retirement, medical issues, emergencies, etc)
  2. How to make a budget
  3. Smart shopping strategies
  4. How to use credit cards, and why we should avoid debt
  5. The basics of investing

Of course there are far more topics that we should learn as we get older.  You can tell that I clearly follow this by the variety of topics I get into here.  For example, career, real estate, etc.  That being said, for those young and at the beginning stages of learning, what do you think of these topics as a starting a point.

My Questions for You:

What do you think of these topics as basics for people who are just learning about personal finance?

Do you have any more to add?

Comments

  1. JT says

    Not sure if balancing a checkbook is part of school, but it is something that I notice is lacking. Of course with electronic banking, I haven’t balanced my checkbook in years and don’t even keep the register. I simply make sure that I recognize all the charges. But I would think it might be worth knowing how to do, like long division.

    • Squirrelers says

      JT – makes sense, I like your analogy. I think that what’s ultimately important is to be able to have the motivation and skills to actively take personal responsibility for one’s finances.

  2. Anne @ ImpulseSave says

    I remember learning how to write checks and balance a checkbook in elementary school, but it was more of a basic math lesson rather than teaching us how to spend smartly. I agree that this is outdated now and the lesson should be more about how to monitor your accounts and plan for future expenses. I doubt kids now will ever need to write an actual check.

    This may be part of #4 and #5, but a general introduction to how interest works (both for debt and investment) would be helpful to learn at an early age.

    • Squirrelers says

      Anne – good points about writing checks. It might be, for kids today, the way many of us would look at not having color television.

  3. Kurt @ Money Counselor says

    I think I might delete your shopping strategies in favor of something like “Can I Afford This?” I think many answer this question by looking in their bank account or, worse, checking the available credit on their card when it’s really a much larger question. Does buying this car/expensive gadget/home fit within my budget and long term goals?

    Also I might add ‘All About Debt.’ Topics covered might be looking at mortgage and other loan amortization schedules so students see exactly how much interest costs them; what are the ramifications of late payments, bankruptcy, and foreclosure; reviewing credit reports and understanding why they’re important and how to get errors corrected; differences between secured and unsecured debt; and so on.

    • Squirrelers says

      Kurt – good points. I like the notion of teaching kids how to understand whether or not they can afford something, and how such a decision would fit into longer-term goals.

  4. krantcents says

    I used to teach Personal Finance and I am doing it again next year. My Syllabus includes budgets, credit cards, banking (checking accounts./credit), mortgages, buying cars/homes, debt, goals, goal setting, financial responsibility, financing education, money decisions and much more.

    If the students do not practice the skills they learn, they will forget it. I try to enlist parents to encourage the new skills.

    • Squirrelers says

      Krantcents – that’s great to read. Good for you for helping to promote financial literacy in this way. So many younger people could benefit from this type of foundation early in life. The topic of financing education can be one that could really help some of these folks make sensible decisions that won’t put them in deep debt early on.

  5. Justin@TheFrugalPath says

    Those are all great topics and should be required for graduation. I was required to learn the names of different styles of architecture, but never learned the power of interest or the cons of having debt.

    • Squirrelers says

      Justin – ha! Yeah, learning about the topics of debt and compound interest just might be more important than learning about different styles of architechture!

  6. Jules@Faithful With a Few says

    Yes! Yes! I was one of the kids that learned very little about it, and money wasn’t an important focus in my home. I just now at 29 years old am learning about finances. I will not make the same mistake with my children!

  7. Mr. 1500 says

    Yes! Our financial education in the US stinks!

    Under basics of investing, teach them about compound interest and the incredible amount of money they’ll have if they start at 25 instead of 40 (rule of 72/compound interest).

    Money is such a taboo subject among family. My parents NEVER discussed it. On top of that, I now realize that they were terrible with their money. Unfortunately, an awful lot of other people are in my boat; the financial Titanic.

    We need better education!

    • Squirrelers says

      Interesting…money being taboo, and not managed well. I suppose a lot of that is socialized, and there are probably many, many people who fit that description. While it makes sense to have boundaries with money discussions, it’s of course worth talking about!

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