Why Personal Finance is not taught in Schools in the US

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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adimoron
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Why Personal Finance is not taught in Schools in the US

Post by adimoron » Thu Jul 18, 2019 9:55 am

Background for my question: I work in NYC and recently a couple of interns from an underprivileged background joined our team for a week. While discussing with them I found out that they had received Credit Cards with limits of $10K. One of the interns had used 1.5K and was making minimum payments on her credit card. She had been paying for the last 2 years. When I spoke to her about credit card debt she had no idea about interest and fees. The APR on her credit card was 25% !!. She said the person who gave her the credit card said it has $10K and she can spend and pay later. This is an individual who would be a working professional in a year (Final year of Bachelors). How could she not know basics of personal finance ?

I felt really bad and spent a lot of time with them explaining what they needed to do. The interns explained that no one in their families have credit cards and hence they did not know how to use credit cards and had no clue about interest and how quickly it all adds up.

Why do schools here not teach basic personal finance ? These banks come to their own campus and give their kids these high APR credit cards. Dont they want to stop their kids starting out with a mountain of unnecessary debt ?

robertmcd
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Re: Why Personal Finance is not taught in Schools in the US

Post by robertmcd » Thu Jul 18, 2019 9:56 am

The world needs debt slaves

livesoft
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Re: Why Personal Finance is not taught in Schools in the US

Post by livesoft » Thu Jul 18, 2019 10:04 am

I believe that there is at least one study that showed that teaching personal finance in a school had no measurable change in outcome from when personal finance was not taught. That is: It does no good to teach personal finance in school.

Of course, I suppose one could study whether teaching any subject in school has a measurable change in outcome, but let's not go there.
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Topic Author
adimoron
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Re: Why Personal Finance is not taught in Schools in the US

Post by adimoron » Thu Jul 18, 2019 10:08 am

Its just that banks here give out credit cards for fun and hence this education becomes more important here than in other parts of the globe where credit cards are not so easy to get. But I get your point.

NotWhoYouThink
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Re: Why Personal Finance is not taught in Schools in the US

Post by NotWhoYouThink » Thu Jul 18, 2019 10:10 am

Personal Finance became a requirement when my younger child was in high school. The curriculum looked reasonable, but the main (only?) lesson that stuck was "credit cards are bad, avoid them." Which has some merit, as mentioned in the OP, but context and nuance were missing. Of course these were high school kids.

Yankuba
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Re: Why Personal Finance is not taught in Schools in the US

Post by Yankuba » Thu Jul 18, 2019 10:10 am

livesoft wrote:
Thu Jul 18, 2019 10:04 am
I believe that there is at least one study that showed that teaching personal finance in a school had no measurable change in outcome from when personal finance was not taught. That is: It does no good to teach personal finance in school.

Of course, I suppose one could study whether teaching any subject in school has a measurable change in outcome, but let's not go there.
+1

Financial literacy courses don't work. The meta analyses of these programs show they are a waste of time.

https://money.usnews.com/money/personal ... urses-work

"For example, a 2014 paper from three professors looked at the results from nearly 170 papers covering more than 200 scientific studies on financial literacy and found that financial education did little to improve subsequent financial behaviors. "Our meta-analysis revealed that financial education interventions studied explained only about 0.1 percent of the variance in the financial behaviors studied," the authors concluded."

John Doe 123
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Re: Why Personal Finance is not taught in Schools in the US

Post by John Doe 123 » Thu Jul 18, 2019 10:12 am

I had a personal finance class at my public high school (class of 2003) that was a part of the required curriculum to graduate.

Most kids didn't care to take it seriously.

tenkuky
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Re: Why Personal Finance is not taught in Schools in the US

Post by tenkuky » Thu Jul 18, 2019 10:12 am

What passes for financial literacy teaching in at least 1 middle school my child was in: "The Stock Market Game".
https://www.stockmarketgame.org/
Not quite a boglehead philosophy. Quite an emphasis on which team picked stocks and "won".
I got nowhere explaining just VT it and let it ride :oops:

goblue100
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Re: Why Personal Finance is not taught in Schools in the US

Post by goblue100 » Thu Jul 18, 2019 10:17 am

adimoron wrote:
Thu Jul 18, 2019 9:55 am
Background for my question: I work in NYC and recently a couple of interns from an underprivileged background joined our team for a week. While discussing with them I found out that they had received Credit Cards with limits of $10K. One of the interns had used 1.5K and was making minimum payments on her credit card. She had been paying for the last 2 years. When I spoke to her about credit card debt she had no idea about interest and fees. The APR on her credit card was 25% !!. She said the person who gave her the credit card said it has $10K and she can spend and pay later. This is an individual who would be a working professional in a year (Final year of Bachelors). How could she not know basics of personal finance ?

I felt really bad and spent a lot of time with them explaining what they needed to do. The interns explained that no one in their families have credit cards and hence they did not know how to use credit cards and had no clue about interest and how quickly it all adds up.

Why do schools here not teach basic personal finance ? These banks come to their own campus and give their kids these high APR credit cards. Dont they want to stop their kids starting out with a mountain of unnecessary debt ?
I disagree with the premise of your post. Just because an intern didn't learn about consumer credit doesn't mean it wasn't taught. I suspect most high schools have some sort of basic economics course. I took one in my high school in 1978 and made sure my daughter took one in 2012. Maybe the intern didn't take the elective course, but doesn't mean it wasn't available.
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Re: Why Personal Finance is not taught in Schools in the UNot

Post by Fallible » Thu Jul 18, 2019 10:19 am

Some schools do teach personal finance, including Harvard, although belatedly:

https://www.wsj.com/articles/even-harva ... 1558171800
https://college.harvard.edu/guides/financial-literacy
Last edited by Fallible on Thu Jul 18, 2019 10:36 am, edited 2 times in total.
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Re: Why Personal Finance is not taught in Schools in the US

Post by BigMoneyNoWhammies » Thu Jul 18, 2019 10:19 am

adimoron wrote:
Thu Jul 18, 2019 9:55 am
Background for my question: I work in NYC and recently a couple of interns from an underprivileged background joined our team for a week. While discussing with them I found out that they had received Credit Cards with limits of $10K. One of the interns had used 1.5K and was making minimum payments on her credit card. She had been paying for the last 2 years. When I spoke to her about credit card debt she had no idea about interest and fees. The APR on her credit card was 25% !!. She said the person who gave her the credit card said it has $10K and she can spend and pay later. This is an individual who would be a working professional in a year (Final year of Bachelors). How could she not know basics of personal finance ?

I felt really bad and spent a lot of time with them explaining what they needed to do. The interns explained that no one in their families have credit cards and hence they did not know how to use credit cards and had no clue about interest and how quickly it all adds up.

Why do schools here not teach basic personal finance ? These banks come to their own campus and give their kids these high APR credit cards. Dont they want to stop their kids starting out with a mountain of unnecessary debt ?
People learn what they want to learn. Think about how many posts on here contain some version of "DW/DH doesn't care to know about/understand our finances at all." How can we expect high schoolers who likely can't personally utilize most of the things being taught in such a class (like using a credit card) to give a crap when people with high net worths who do understand basic finance can't get their own spouses to educate themselves?
Last edited by BigMoneyNoWhammies on Thu Jul 18, 2019 10:20 am, edited 1 time in total.

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Re: Why Personal Finance is not taught in Schools in the US

Post by Dottie57 » Thu Jul 18, 2019 10:20 am

Perhaps it should be worked into math curriculum. Certainly math problems (or some of them) could be about financial problems.

stoptothink
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Re: Why Personal Finance is not taught in Schools in the US

Post by stoptothink » Thu Jul 18, 2019 10:24 am

BigMoneyNoWhammies wrote:
Thu Jul 18, 2019 10:19 am
adimoron wrote:
Thu Jul 18, 2019 9:55 am
Background for my question: I work in NYC and recently a couple of interns from an underprivileged background joined our team for a week. While discussing with them I found out that they had received Credit Cards with limits of $10K. One of the interns had used 1.5K and was making minimum payments on her credit card. She had been paying for the last 2 years. When I spoke to her about credit card debt she had no idea about interest and fees. The APR on her credit card was 25% !!. She said the person who gave her the credit card said it has $10K and she can spend and pay later. This is an individual who would be a working professional in a year (Final year of Bachelors). How could she not know basics of personal finance ?

I felt really bad and spent a lot of time with them explaining what they needed to do. The interns explained that no one in their families have credit cards and hence they did not know how to use credit cards and had no clue about interest and how quickly it all adds up.

Why do schools here not teach basic personal finance ? These banks come to their own campus and give their kids these high APR credit cards. Dont they want to stop their kids starting out with a mountain of unnecessary debt ?
People learn what they want to learn. Think about how many posts on here contain some version of "DW/DH doesn't care to know about/understand our finances at all." How can we expect high schoolers who likely can't personally utilize most of the things being taught in such a class (like using a credit card) to give a crap when people with high net worths who do understand basic finance can't get their own spouses to educate themselves?
This. There is nothing that can be taught in school that is going to change this common characteristic (ignorance when it comes to personal finance). The most effective way to teach this is in the home, being an example to your own children.

dbr
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Re: Why Personal Finance is not taught in Schools in the US

Post by dbr » Thu Jul 18, 2019 10:30 am

tenkuky wrote:
Thu Jul 18, 2019 10:12 am
What passes for financial literacy teaching in at least 1 middle school my child was in: "The Stock Market Game".
https://www.stockmarketgame.org/
Not quite a boglehead philosophy. Quite an emphasis on which team picked stocks and "won".
I got nowhere explaining just VT it and let it ride :oops:
I have seen this happen. Sometimes it is a misguided implementation of making education interesting by making it a game, but it can also be the teacher actually thinks they can pick stocks. Even worse they bring in some one from Edward Jones to teach the class.

It is tough to make financial education relevant to kids of school age. I think there are plenty of examples of the math that will be needed for financial education that might be relevant and interesting to school age kids. This thread might have some interesting discussion: viewtopic.php?f=2&t=285927

Broken Man 1999
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Re: Why Personal Finance is not taught in Schools in the US

Post by Broken Man 1999 » Thu Jul 18, 2019 10:38 am

Florida is making a stab at the subject.

http://blogs.edweek.org/edweek/curricul ... ards_.html

Hope springs eternal.

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Re: Why Personal Finance is not taught in Schools in the US

Post by willthrill81 » Thu Jul 18, 2019 10:40 am

livesoft wrote:
Thu Jul 18, 2019 10:04 am
I believe that there is at least one study that showed that teaching personal finance in a school had no measurable change in outcome from when personal finance was not taught. That is: It does no good to teach personal finance in school.
Correct.

It makes you wonder what measurable outcomes there are in other fields as a result of being 'taught' in schools.

In university settings, research has also shown that teaching ethics to students does not result in them making more ethical decisions.
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Re: Why Personal Finance is not taught in Schools in the US

Post by H-Town » Thu Jul 18, 2019 10:45 am

adimoron wrote:
Thu Jul 18, 2019 9:55 am
Background for my question: I work in NYC and recently a couple of interns from an underprivileged background joined our team for a week. While discussing with them I found out that they had received Credit Cards with limits of $10K. One of the interns had used 1.5K and was making minimum payments on her credit card. She had been paying for the last 2 years. When I spoke to her about credit card debt she had no idea about interest and fees. The APR on her credit card was 25% !!. She said the person who gave her the credit card said it has $10K and she can spend and pay later. This is an individual who would be a working professional in a year (Final year of Bachelors). How could she not know basics of personal finance ?

I felt really bad and spent a lot of time with them explaining what they needed to do. The interns explained that no one in their families have credit cards and hence they did not know how to use credit cards and had no clue about interest and how quickly it all adds up.

Why do schools here not teach basic personal finance ? These banks come to their own campus and give their kids these high APR credit cards. Dont they want to stop their kids starting out with a mountain of unnecessary debt ?
Like all things in life, we all tend to learn our lesson the hard way. Some may get lucky and not pay a steep price. Most will have to go through it.

Personally, I learned personal finance on my own and not in a class room. I worked 2-3 minimum paid jobs in high school and college to pay for my own education. It wasn't easy but it's well worth it. On a flip side, my younger brother, who got everything paid for, struggles to support himself. Mind you, he went to business school with a finance degree... Sometimes life is stranger than fiction.

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Re: Why Personal Finance is not taught in Schools in the US

Post by wolf359 » Thu Jul 18, 2019 10:49 am

goblue100 wrote:
Thu Jul 18, 2019 10:17 am
I disagree with the premise of your post. Just because an intern didn't learn about consumer credit doesn't mean it wasn't taught. I suspect most high schools have some sort of basic economics course. I took one in my high school in 1978 and made sure my daughter took one in 2012. Maybe the intern didn't take the elective course, but doesn't mean it wasn't available.
+1

I had personal finance classes in elementary school in the 70's. Our kids have had them in elementary and middle school (and one is required in high school).

However, a lot depends upon the person. Kids are living at home, and aren't really responsible for the bills or making financial decisions. Personal finance feels abstract to most of them, and they may not absorb the messages or understand what they mean in practical terms.

I think my kids were getting a lot out of those classes, but that may have been because we've been discussing those types of things at home since they were little. They've also been observing how other people save and spend money and making their own limited decisions.

But a lot of kids are naturally spendy or naturally frugal or naturally planners. It's interesting to watch them and predict how they and their friends will turn out. Most of the kids simply don't think about money much, and don't know the value of a dollar.

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Re: Why Personal Finance is not taught in Schools in the US

Post by prd1982 » Thu Jul 18, 2019 10:52 am

stoptothink wrote:
Thu Jul 18, 2019 10:24 am
The most effective way to teach this is in the home, being an example to your own children.
This is true and applies to many issues. But it doesn't help the many children who don't have a financial role model. School is the only hope. I don't envy the teachers trying to break these bad habits.

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Re: Why Personal Finance is not taught in Schools in the US

Post by deltaneutral83 » Thu Jul 18, 2019 10:54 am

Personal finance not being taught (or known?) at home is more of an issue than not being taught in schools. If the majority of Americans are shown that consumer debt makes you worse off 99% of the time, then things could change. As such in this culture, it won't, or at least not anytime soon. Purchasing a car that's 45+% of your income is a more than frequent thing for middle/middle income and lower which represents well over 65% of Americans. On the mortgage side of things, paying above 35+% for monthly PITI is also frequent (or above 3x annual income for mortgage balance), and a cash flow killer.

Making minimum payments and not even realizing you're paying through the teeth on interest is also prevalent. And for the small majority that are aware, many think it's a necessary evil. The most heavily marketed product (by ad dollars spent) in the history of mankind is the credit card, and for good reason, it's profitable to lending institutions.
Last edited by deltaneutral83 on Thu Jul 18, 2019 10:57 am, edited 1 time in total.

Shallowpockets
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Re: Why Personal Finance is not taught in Schools in the US

Post by Shallowpockets » Thu Jul 18, 2019 10:56 am

Probably no time in the school day to fit it into the curriculum. Where would you put it? Maybe between the pottery class and the food design art class.
In America you learn finances the hard way. That hard way sets your trajectory for your life. Besides, its math, and who cares about math.

Topic Author
adimoron
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Re: Why Personal Finance is not taught in Schools in the US

Post by adimoron » Thu Jul 18, 2019 10:57 am

goblue100 wrote:
Thu Jul 18, 2019 10:17 am
adimoron wrote:
Thu Jul 18, 2019 9:55 am
Background for my question: I work in NYC and recently a couple of interns from an underprivileged background joined our team for a week. While discussing with them I found out that they had received Credit Cards with limits of $10K. One of the interns had used 1.5K and was making minimum payments on her credit card. She had been paying for the last 2 years. When I spoke to her about credit card debt she had no idea about interest and fees. The APR on her credit card was 25% !!. She said the person who gave her the credit card said it has $10K and she can spend and pay later. This is an individual who would be a working professional in a year (Final year of Bachelors). How could she not know basics of personal finance ?

I felt really bad and spent a lot of time with them explaining what they needed to do. The interns explained that no one in their families have credit cards and hence they did not know how to use credit cards and had no clue about interest and how quickly it all adds up.

Why do schools here not teach basic personal finance ? These banks come to their own campus and give their kids these high APR credit cards. Dont they want to stop their kids starting out with a mountain of unnecessary debt ?
I disagree with the premise of your post. Just because an intern didn't learn about consumer credit doesn't mean it wasn't taught. I suspect most high schools have some sort of basic economics course. I took one in my high school in 1978 and made sure my daughter took one in 2012. Maybe the intern didn't take the elective course, but doesn't mean it wasn't available.
My whole point is you should not " have to take the course". It should be a given.

Afty
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Re: Why Personal Finance is not taught in Schools in the US

Post by Afty » Thu Jul 18, 2019 11:00 am

What would you drop from existing school curricula to make room for a personal finance course?

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Re: Why Personal Finance is not taught in Schools in the US

Post by MotoTrojan » Thu Jul 18, 2019 11:02 am

tenkuky wrote:
Thu Jul 18, 2019 10:12 am
What passes for financial literacy teaching in at least 1 middle school my child was in: "The Stock Market Game".
https://www.stockmarketgame.org/
Not quite a boglehead philosophy. Quite an emphasis on which team picked stocks and "won".
I got nowhere explaining just VT it and let it ride :oops:
An intern at my company won that by going long UPRO (3x S&P500) and short it’s inverse; guess they forgot to do a rule on shorts. Ended up with billions ;). Great lesson...

Topic Author
adimoron
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Re: Why Personal Finance is not taught in Schools in the US

Post by adimoron » Thu Jul 18, 2019 11:03 am

Does not have to be a course. Maybe a seminar. They might as well show them some youtube videos which provide a basic understanding of personal finance.

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Re: Why Personal Finance is not taught in Schools in the US

Post by BogleMelon » Thu Jul 18, 2019 11:05 am

When they try, they teach it wrong! I have friends who live in NJ in a district where the schools teach kids investing. The school runs competitions using some kind of fake money "points" and ask the kids to trade virtual stocks "using daily real prices" and within a couple of weeks, they call the winner who made the most money! :oops:
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Re: Why Personal Finance is not taught in Schools in the US

Post by Abe » Thu Jul 18, 2019 11:18 am

In school you get the lesson first and then you get the test. In life you get the test first and then you get the lesson. In many cases I think this applies to personal finance lessons taught in school. It doesn't really sink in in school, but when you get out in the real world and end up deeply in debt, that's when you are more likely to seek personal finance help, and that's probably why Dave Ramsey has been so successful.
Slow and steady wins the race.

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Re: Why Personal Finance is not taught in Schools in the US

Post by prd1982 » Thu Jul 18, 2019 11:22 am

Afty wrote:
Thu Jul 18, 2019 11:00 am
What would you drop from existing school curricula to make room for a personal finance course?
Been a long time since school, but I took algebra, geometry, trig, calculus. I would vote for a semester of statistics with an emphasis on finance ahead of all of them.

warner25
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Re: Why Personal Finance is not taught in Schools in the US

Post by warner25 » Thu Jul 18, 2019 11:23 am

I remember a few classes in middle school that covered a few personal finance topics: household budgeting, understanding utility bills, and the abominable stock-picking game. It certainly wasn't a whole semester or year-long course. In my senior year of college, I had the opportunity to take a real personal finance class for a semester. It was much more valuable mainly because of the impending reality of graduation and being on my own for the first time. That's where I initially learned of index funds, among many of other good things.

I'm not a professional educator myself, but I get the sense that the prevailing educational philosophy in America is that if kids just focus on learning basic skills of reading, writing, math, comprehension, critical thinking, etc. then they can learn whatever else later. The result is minimal time or resources available for the application of those skills toward whatever else.

I'll echo other comments about the limited value of mandatory personal finance classes. My employer puts all new employees through a class, but you certainly wouldn't know it by the way people talk about money or the decisions they make. You can lead a horse to water...

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Re: Why Personal Finance is not taught in Schools in the US

Post by Yellowhouse » Thu Jul 18, 2019 11:25 am

Why they choose to teach students Algebra and Geometry over Personal Finance is a huge question mark. 100% of students MUST be knowledgeable in personal finance, while an extremely small % will ever be forced to know Algebra or Geometry in their daily lives!!

Why do they cram a four year college degree down EVERYONE'S throat?? Trade schools and trade careers should be pushed at students, they pay well.

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Re: Why Personal Finance is not taught in Schools in the US

Post by GCD » Thu Jul 18, 2019 11:25 am

robertmcd wrote:
Thu Jul 18, 2019 9:56 am
The world needs debt slaves
Ouch. But the problem then becomes the political responses to wealth disparity.

In before the lock...

tj218
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Re: Why Personal Finance is not taught in Schools in the US

Post by tj218 » Thu Jul 18, 2019 11:30 am

Most schools do teach personal finance. Most students forget the lessons. Just like some don't remember how to balance chemistry equations, how to find the area of trapezoid, the implications of the Smoot-Hawley Tariff, or how to not become morbidly obese.

It's easy to blame something not being taught, but in many instances things are taught, but students find little relevance to their lives and quickly discard that information.

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Re: Why Personal Finance is not taught in Schools in the US

Post by Freetime76 » Thu Jul 18, 2019 11:36 am

BogleMelon wrote:
Thu Jul 18, 2019 11:05 am
When they try, they teach it wrong! I have friends who live in NJ in a district where the schools teach kids investing. The school runs competitions using some kind of fake money "points" and ask the kids to trade virtual stocks "using daily real prices" and within a couple of weeks, they call the winner who made the most money! :oops:
Right, who decides what is **good** for personal finance and what is not? An easy example: I think credit cards are horrible - didn't exist at my grandparent's time and hasn't helped since, IMO. Tons of people think credit cards are either unavoidable or are useful for rewards/points/travel. I know I am right in the deepest parts of my soul, and I bet the other camps feel exactly the same way :D

Anyway, I'm thinking it might be a case of the blind leading the blind... coupled with a dash of not wanting to have to tell a young person "no" (not popular these days), such as "no", you should not go up to your eyeballs in debt for a private college in order to work at a non-stellar wage job. And maybe a bit of cutting all the other nice to have programs, like art, music, sports. This is just an opinion, of course :wink:

As someone else said, we learned/didn't learn it at home and by making mistakes or seeing parents/others make mistakes.

tenkuky
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Re: Why Personal Finance is not taught in Schools in the US

Post by tenkuky » Thu Jul 18, 2019 11:37 am

tj218 wrote:
Thu Jul 18, 2019 11:30 am
the implications of the Smoot-Hawley Tariff
Anyone, anyone?

https://www.bing.com/th?id=OIP.Vs8VnLi- ... .5&pid=1.7
Last edited by tenkuky on Thu Jul 18, 2019 11:38 am, edited 1 time in total.

Glockenspiel
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Re: Why Personal Finance is not taught in Schools in the US

Post by Glockenspiel » Thu Jul 18, 2019 11:38 am

Simple answer: Banks, financial institutions, and Wall Street have too much lobbying power that they’d squash any proposal to require it.

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Re: Why Personal Finance is not taught in Schools in the US

Post by Psyayeayeduck » Thu Jul 18, 2019 11:38 am

Once upon a time, Home Economics classes included personal finance like balancing a budget, how to write a check book, and such along with other areas like cooking, baking, and sewing. Anything that included the home, it was there in some fashion.

I have no clue what today's version of Home Ec looks like -- if it changed with the times or not. It may not be in line of what you may be thinking if a Personal Finance-only class is introduced but I think balancing a budget has always been a great starting point in school and at the home. Whether to include other areas such as taxes, tax-advantage accounts, taxable accounts, tax laws, and so forth seems more questionable because you will have to deal with a multi-generational problem -- will teenagers listen?

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Re: Why Personal Finance is not taught in Schools in the US

Post by medic » Thu Jul 18, 2019 11:42 am

Like a lot of learning, it's only valuable if used or reinforced through life. Fractions didn't make sense for my kid (when am I ever going to use this) until he started to help me with some woodworking projects and had to do the math. Similarly, when the parents are uneducated about a subject or fear/avoid it, the child is unlikely to learn differently. For our kids, we don't do a sit down about finance, but reinforce finance through little lessons that come up on life from an early age. The toddler wanted to get a toy with birthday money, so we went to the store and explained he can get one of the really shinny car, up to two of the smaller/less shiny cars, or just save all/some of the money to use later.

I volunteer with an organization called Junior Achievement. Has curriculum that teaches kids of all ages about money and finance with actions for kids to nag parents about (e.g. open a bank account). When I taught the material to 3rd graders, I recall a few parents telling me afterwards how they had to go learn about compound interest because junior was asking them. And at least some lessons stuck longer since I still run into kids I taught several years ago and they'll tell me how their saving some money for college/car/prom/etc.

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BL
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Re: Why Personal Finance is not taught in Schools in the US

Post by BL » Thu Jul 18, 2019 11:43 am

Dottie57 wrote:
Thu Jul 18, 2019 10:20 am
Perhaps it should be worked into math curriculum. Certainly math problems (or some of them) could be about financial problems.
+1
Same goes for (formerly) Home Ec type classes, economics, etc.
I don't have a lot of confidence in the teacher's knowledge nor study materials that may have a conflict of interest.
Still, some understanding is useful and maybe applying % to real life is helpful. I sometimes see folks on Bogleheads who have no concept of %; they like to just add up the percents (like what is the (average) % ER on a 3-fund portfolio).
Of course Mom and Dad could work it in if they choose.

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Re: Why Personal Finance is not taught in Schools in the US

Post by NotWhoYouThink » Thu Jul 18, 2019 11:43 am

They teach grammar and writing in school. How does your experience with new hires suggest that is working out?

People learn a lot from their family and neighborhoods. Sometimes they learn what to do, sometimes they learn what to avoid.

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Re: Why Personal Finance is not taught in Schools in the US

Post by willthrill81 » Thu Jul 18, 2019 11:52 am

prd1982 wrote:
Thu Jul 18, 2019 11:22 am
Afty wrote:
Thu Jul 18, 2019 11:00 am
What would you drop from existing school curricula to make room for a personal finance course?
Been a long time since school, but I took algebra, geometry, trig, calculus. I would vote for a semester of statistics with an emphasis on finance ahead of all of them.
Ditto that. Few people use geometry, trig, or cal in their careers, and if they do, they will be taught those subjects in college. I completely agree that stats is far more useful to a broader array of people. But I'm on the fence about personal finance since the data have shown that it doesn't seem to have an effect on the students.
NotWhoYouThink wrote:
Thu Jul 18, 2019 11:43 am
They teach grammar and writing in school. How does your experience with new hires suggest that is working out?
Sadly, you're correct. Few high school grads can write a single page that isn't filled with mechanical errors. I don't have much confidence in our primary education system to teach anything very effectively right now.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Why Personal Finance is not taught in Schools in the US

Post by dbr » Thu Jul 18, 2019 12:08 pm

Yellowhouse wrote:
Thu Jul 18, 2019 11:25 am
Why they choose to teach students Algebra and Geometry over Personal Finance is a huge question mark. 100% of students MUST be knowledgeable in personal finance, while an extremely small % will ever be forced to know Algebra or Geometry in their daily lives!!
Algebra is needed to understand concepts of return, compounding, etc., etc. in personal finance.

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Re: Why Personal Finance is not taught in Schools in the US

Post by willthrill81 » Thu Jul 18, 2019 12:12 pm

dbr wrote:
Thu Jul 18, 2019 12:08 pm
Yellowhouse wrote:
Thu Jul 18, 2019 11:25 am
Why they choose to teach students Algebra and Geometry over Personal Finance is a huge question mark. 100% of students MUST be knowledgeable in personal finance, while an extremely small % will ever be forced to know Algebra or Geometry in their daily lives!!
Algebra is needed to understand concepts of return, compounding, etc., etc. in personal finance.
You can understand those concepts with just a good understanding of multiplication and perhaps exponents. In an MBA finance course, we never did any algebra at all and relied instead on business calculators, specifically the BAII-Plus.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Why Personal Finance is not taught in Schools in the US

Post by sschullo » Thu Jul 18, 2019 12:20 pm

Historically personal finance education was under the general home economics classes until a little known event that shocked the western world on October 4th, 1957. Science and math dominated the curriculum from then on.

There is one passionate individual who is trying to change this by offering free financial literacy resources and training throughout the country to public k12 teachers: h[url]ttps://www.ngpf.org/[/url]
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Why Personal Finance is not taught in Schools in the US

Post by dbr » Thu Jul 18, 2019 12:21 pm

willthrill81 wrote:
Thu Jul 18, 2019 12:12 pm
dbr wrote:
Thu Jul 18, 2019 12:08 pm
Yellowhouse wrote:
Thu Jul 18, 2019 11:25 am
Why they choose to teach students Algebra and Geometry over Personal Finance is a huge question mark. 100% of students MUST be knowledgeable in personal finance, while an extremely small % will ever be forced to know Algebra or Geometry in their daily lives!!
Algebra is needed to understand concepts of return, compounding, etc., etc. in personal finance.
You can understand those concepts with just a good understanding of multiplication and perhaps exponents. In an MBA finance course, we never did any algebra at all and relied instead on business calculators, specifically the BAII-Plus.
Those things are already algebra. But maybe this is just semantics. Of course for a PhD mathematician algebra does not appear until a mathematics curriculum at university.

This definition is pretty good:

https://en.wikipedia.org/wiki/Algebra

In its most general form, algebra is the study of mathematical symbols and the rules for manipulating these symbols; it is a unifying thread of almost all of mathematics. It includes everything from elementary equation solving to the study of abstractions such as groups, rings, and fields.
‎History of algebra · ‎Algebra · ‎Abstract algebra · ‎Elementary algebra

Many students are surprised to find how much algebra they are already doing and just don't know it. You did a lot of algebra you didn't see because, as you said, the math was hidden inside a computer chip.

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Re: Why Personal Finance is not taught in Schools in the US

Post by Abe » Thu Jul 18, 2019 12:24 pm

willthrill81 wrote:
Thu Jul 18, 2019 12:12 pm
dbr wrote:
Thu Jul 18, 2019 12:08 pm
Yellowhouse wrote:
Thu Jul 18, 2019 11:25 am
Why they choose to teach students Algebra and Geometry over Personal Finance is a huge question mark. 100% of students MUST be knowledgeable in personal finance, while an extremely small % will ever be forced to know Algebra or Geometry in their daily lives!!
Algebra is needed to understand concepts of return, compounding, etc., etc. in personal finance.
You can understand those concepts with just a good understanding of multiplication and perhaps exponents. In an MBA finance course, we never did any algebra at all and relied instead on business calculators, specifically the BAII-Plus.
All one has to do to understand compounding is pick a number and multiply it by 1.10 (assuming 10% interest). After about 7 times, your number doubles. That's compounding. Of course it's a lot faster with a financial calculator. I highly recommend the Texas Instrument BAll-Plus.
Slow and steady wins the race.

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Re: Why Personal Finance is not taught in Schools in the US

Post by Jags4186 » Thu Jul 18, 2019 12:28 pm

For the most part I don’t think it really matters.

Personal finance basics can be taught in 15 minutes and written on 1 piece of paper.

People need to make a choice. Do I want a new purse or save for retirement? Do you want to go bar hopping every weekend or pay down your student loans?

I mean is personal finance really any different than keeping in good physical shape? Everyone knows eating like garbage and watching 6 hours of TV everyday is an unhealthy lifestyle. Yet some people do it and some don’t.

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Re: Why Personal Finance is not taught in Schools in the US

Post by coachd50 » Thu Jul 18, 2019 12:34 pm

Freetime76 wrote:
Thu Jul 18, 2019 11:36 am
BogleMelon wrote:
Thu Jul 18, 2019 11:05 am
When they try, they teach it wrong! I have friends who live in NJ in a district where the schools teach kids investing. The school runs competitions using some kind of fake money "points" and ask the kids to trade virtual stocks "using daily real prices" and within a couple of weeks, they call the winner who made the most money! :oops:
Right, who decides what is **good** for personal finance and what is not?
In a non hypothetical, reality based discussion, this right here is a central concept that will probably go ignored here on this forum. Chances are any discussion on personal finance on the bogleheads forum will become an echo chamber constantly using the phrases "Three fund portfolio, index funds, no consumer debt..etc". Great things, which I do believe in. HOWEVER....

In the real world, if personal finance became "mandated" who exactly do you think would be the voices being listened to when setting a curriculum? If you don't think that the financial services sector would not be heavily involved in curriculum matters, and I don't know if "their" idea of personal finance would mirror what many who post here think are best practices.

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Re: Why Personal Finance is not taught in Schools in the US

Post by coachd50 » Thu Jul 18, 2019 12:38 pm

willthrill81 wrote:
Thu Jul 18, 2019 11:52 am
prd1982 wrote:
Thu Jul 18, 2019 11:22 am
Afty wrote:
Thu Jul 18, 2019 11:00 am
What would you drop from existing school curricula to make room for a personal finance course?
Been a long time since school, but I took algebra, geometry, trig, calculus. I would vote for a semester of statistics with an emphasis on finance ahead of all of them.
Ditto that. Few people use geometry, trig, or cal in their careers, and if they do, they will be taught those subjects in college. I completely agree that stats is far more useful to a broader array of people. But I'm on the fence about personal finance since the data have shown that it doesn't seem to have an effect on the students.
NotWhoYouThink wrote:
Thu Jul 18, 2019 11:43 am
They teach grammar and writing in school. How does your experience with new hires suggest that is working out?
Sadly, you're correct. Few high school grads can write a single page that isn't filled with mechanical errors. I don't have much confidence in our primary education system to teach anything very effectively right now.
Regarding the grammar/writing and lack of confidence in the educational system, keep in mind that the educational system changes because people OUTSIDE the system claim that those in the system don't know what they are doing and should instead do it "this way" or teach "this content".
What you are currently complaining about are students who were educated using a curriculum and methods designed to get them "college or career" ready instead of an "outdated" curriculum and methods that weren't useful for "the real world".

coachd50
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Re: Why Personal Finance is not taught in Schools in the US

Post by coachd50 » Thu Jul 18, 2019 12:41 pm

Jags4186 wrote:
Thu Jul 18, 2019 12:28 pm
For the most part I don’t think it really matters.

Personal finance basics can be taught in 15 minutes and written on 1 piece of paper.

People need to make a choice. Do I want a new purse or save for retirement? Do you want to go bar hopping every weekend or pay down your student loans?

I mean is personal finance really any different than keeping in good physical shape? Everyone knows eating like garbage and watching 6 hours of TV everyday is an unhealthy lifestyle. Yet some people do it and some don’t.
Excellent points. Personal finance theory is simple, just as it is simple to teach basic fitness, health, etc. Getting one to exhibit good personal finance behavior can be just as difficult as getting them to choose behaviors that are congruent with a more healthy lifestyle.

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Re: Why Personal Finance is not taught in Schools in the US

Post by JackoC » Thu Jul 18, 2019 12:45 pm

Yankuba wrote:
Thu Jul 18, 2019 10:10 am
livesoft wrote:
Thu Jul 18, 2019 10:04 am
I believe that there is at least one study that showed that teaching personal finance in a school had no measurable change in outcome from when personal finance was not taught. That is: It does no good to teach personal finance in school.

Of course, I suppose one could study whether teaching any subject in school has a measurable change in outcome, but let's not go there.
+1

Financial literacy courses don't work. The meta analyses of these programs show they are a waste of time.

https://money.usnews.com/money/personal ... urses-work

"For example, a 2014 paper from three professors looked at the results from nearly 170 papers covering more than 200 scientific studies on financial literacy and found that financial education did little to improve subsequent financial behaviors. "Our meta-analysis revealed that financial education interventions studied explained only about 0.1 percent of the variance in the financial behaviors studied," the authors concluded."
But that same article a few paragraphs down from the quote you gave, in an 'OTOH' section, links to a contrary study saying:
"In a meta-analysis of 126 impact evaluation studies, we find that financial education
significantly impacts financial behavior and, to an even larger extent, financial literacy."

Social 'science', isn't it great? :happy

It's hard to believe a focused course on *very basic* personal finance (it might not even get to typical Boglehead stock/fund topics, just stuff like, 'if your borrow at 25% for awhile you have to pay back a truckload more money than you borrowed') would not address the extreme case given in OP's example. Then again, maybe it wouldn't. I realize that 'hard to believe' based on my general impressions as a non-educator does not mean 'untrue'. The other aspect is some implicit assumption that students with zero understanding of finance are picking up much from other subjects they take in school beyond literacy (as in being able to read at all), arithmetic (like making change) and 'yeah I guess I think I heard something about that in school' for the most basic thumbnail sketch of US history. Whereas lots of higher performing kids come from backgrounds where some basics of personal finance are learned at home. I guess there's some middle ground of kids effectively capable of absorbing a topic like rudimentary personal finance ('capability' including any interest in trying) who don't get it at home and maybe the 'studies' just disagree how numerous that group is.

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