A common refrain among personal finance nerds, and among people in general is that Americans in general are financially illiterate. A common solution thrown out is that personal finance should be taught in schools. On the surface, this seems like a no-brainer. But is it really that simple? Here, Mrs Picky Pincher explores the pros and the cons of teaching personal finance in schools.
Ahhh, school. Some people, like me, have fond memories of it. Others wish they could take a flamethrower to the 13+ years of pain. No matter which camp you fall in, I think we can agree that school doesn’t teach you everything. My schooling was great, but I didn’t learn how to cook for myself, how to file taxes, or how to do a job interview during my time there. But don’t worry! I learned how to write a thesis and stumbled my way through geometry.
Schools provide so much value, but they can’t teach us everything about life. Sometimes we have to fall into the crucible of adulthood before we really know what the hell is going on. Live and learn, after all.
But, given all of that, should schools teach personal finance (PF)? It’s a controversial topic with a lot of considerations, but there’s never been a more important time to ask this question. According to a report by Ed Trust, schools aren’t preparing students to be ready for college–or even for careers in the real world. Why? There’s a large emphasis on box-checking and standardized test scores over real-world skills.
On the flip side, as of 2015, the average American household savings rate hovered at 5.5% and carried debt upwards of $130,000. Overall we feel less prepared to face the real world, which might partially explain the dismal debt and savings rates as we try to frantically sort out our lives.
So, should schools bear the responsibility of teaching PF?
The argument for PF in schools
The biggest pro of teaching PF in schools is having a more financially literate population. Heck, payday loan companies would shutter their doors and Google searches for “how do i adult” would drop to all-time lows!
PF is mandatory in 17 states right now and we’ve seen some juicy results already. According to Business Insider, high school seniors who attended PF classes “were more likely to save money, have a budget, and invest.” Providing a basic understanding of money to these young folks makes them less likely to take on debt, which means less stress and a chance at financial independence. PF education could lead to a world with less crime, fewer evictions and foreclosures, and stronger family relationships. I mean, I can’t prove that statistically, but having the chance to learn PF is better than not having the chance at all. And teaching PF in school gives people that chance.
I really do believe that education sets us free, and that includes robust programs to teach PF.
The argument against PF in schools
Sooo, I won’t lie. I definitely lean to one side of this argument and it was hard to come up with an argument against PF in public schools. But I came up with three reasons PF isn’t widely taught in schools.
1. It’s inconvenient
Let’s face it, folks. Our public school teachers are under a lot of stress. They have to check off a lot of boxes and work long hours for comparatively little pay–and put up with a ridiculous amount of BS from all directions. If we made PF mandatory in schools, it would be another burden to an educational system that already needs fixing.
2. It’s expensive
That means new textbooks, buying more technology, hiring more teachers, building additions or improvements, and slotting in time for the courses themselves. Schools need to pay people and keep the lights on, and the additional burden of a new mandatory course could be too much. That also could mean an increase in taxes, which people avoid like head lice.
3. Some businesses don’t want educated people
This is a messed up thing to say, but a lot of businesses make money off the fact that we don’t know things.
I use TurboTax because I have no idea how to file taxes myself. Some people pay for financial advisers to tell them how to spend, save, and invest their money. Other people take out payday loans because they don’t know how else to provide for their families. (Heh. I can imagine the collective pants-crapping of payday loan companies if PF were mandatory in public schools.)
I wish we lived in a world where everyone wanted what’s best for everyone else, but that isn’t the case. Sometimes education is the enemy of enterprise, and enterprise has the money to fight back.
The Bottom Line
We live in a messy world that doesn’t come with an instruction manual. The gap in PF knowledge is only going to widen over time as debt loads increase and savings rates decline. Are we going to continue down this road, or are we going to stop tomorrow’s problems today?
We want to know: What do you think? Should personal finance be taught in every school?
Mrs. Picky Pincher is the blogger and money-saving maven at Picky Pinchers. She writes about living the good life while paying off $225,000 of debt.
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- While I do strive to only write accurate information and dispense valuable advice, I am not a licensed financial adviser. All information is based solely on my personal experience and personal research and should be treated as such. Find out more.