Why our high school graduates should be taught personal finance

First, let me be clear about one thing. When I bring up the issue of teaching teens personal finance, I am not talking about teaching them lessons on financial independence (although this does fall under “personal finance”). I know all of us Bigger Pockets fanatics are all about FI and that’s great!But what I am talking about is just teaching teens the basics of personal finance and let me explain why.

In our country, there are very few places where teaching teens personal finance in high school is required. There are 5 states that require high school students to take a semester-long class that is specific to personal finance in order to graduate from high school.

Nineteen other states require that high school students receive some personal finance education before graduation, but each school/district is left to decide how that will happen. The number nineteen may sound positive, but hold on a second.I live in one of those nineteen states, and in my school (I am a public high school teacher) that requirement amounts to roughly one week of instruction given by social studies teachers in a US Government class. Those teachers are not experts in personal finance (they’ve actually never taken a class on it themselves) and would prefer not to teach the information.They would much rather teach the curriculum they are passionate about - US Government.So in essence, even though there is a “requirement” there is basically nothing being learned by the students. In the 26 remaining states there is no requirement at all to teach personal finance in high schools.(See the New York Times article from January of 2018 written by Ann Carrns titled “Most States Don’t Require Specific Financial Literacy Classes”)

So I am not advocating for a financial independence version of personal finance to be taught in our schools, although I would support that fully. We need baby steps here people.If such a minute number of graduating seniors in our country are getting a semester-long personal finance course, let’s just start with advocating that they all are required to get the basics in this type of course.

If you are a member of Bigger Pockets, I will assume you see the value of personal finance education for our youth. Actually, the vast majority of all people think it’s a good idea.Who among us would have preferred to have known about the following topics prior to graduating from high school? I would guess pretty much all of us.

• Using credit cards
• Student loans
• Mortgages
• Stock market investing
• Compound interest
• Taxes
• 401K, IRAs
• Savings and checking accounts
• Budgeting
• Planning for retirement
• Work benefits (stock options, health insurance, HSAs, etc)
• Auto loans and auto insurance
• Amortization schedules
• Building a good credit score
• Renting vs buying a house
• Life insurance
• Homeowners insurance and renters insurance

Now I am a realist. I know firsthand that if you teach a curriculum to all high school students it doesn’t guarantee they will digest it and it certainly doesn’t guarantee they will use it. But if even half of our high school graduates had basic knowledge about these topics and made financial decisions based on that knowledge what would happen to the following?

• Unpaid credit card debt
• Unpaid income taxes
• Bankruptcies
• Foreclosures
• Crime
• Uninsured motorists
• People with no health insurance
• People depending on government assistance (food stamps; Section 8 housing; etc)
• Homelessness
• Financial support for people who are too old to work and have no retirement savings

And that list doesn’t even include the stress financial insecurity can have on families which can lead to divorce, suicide, domestic violence and other crimes.

The above list is really a list of liabilities our government has to pay for which means taxpayers are footing the bill. What if personal finance education in high schools significantly diminished all of the above?How much less would we each have to pay in taxes? Or, where else could that tax money be spent?How much happier would the average American be?How would that new found sense of financial security for so many Americans increase our positive treatment of others?

So why doesn’t this happen? Well, unfortunately, the answer is money and politics. (The topic of a future blog post of mine to come.)

What are your thoughts?