Why Personal Finance Isn’t Being Taught in Schools

This one has been bugging me for awhile. And, I know that others have raised the question too – of why personal finance isn’t being taught in high schools and/or colleges for that matter (heck, it’d even be interesting to see it being taught in grade schools!).

I know Charlie has talked about some of the advice he’s gotten in some of his college classes by a wise professor. But, I think that seems to be an exception rather than the rule. 

On the whole – teachers seem to be skipping over one of the most important lessons that can be taught in schools today. And truthfully, it isn’t exactly all their fault. It’s administration, the school boards, legislators and even parents. I’m sure if enough parents were pushing that personal finance be taught in schools, it’d get taught.

why isn't finance taught in school

The lack of education in finances can really set a graduate back if they make a lot of foolish money decisions.

My memory is pretty suspect a lot of the time – but individually, I can’t recall doing any budgeting or personal money management classes in school. There was economics – but that seemed more related to macro economy issues and domestic things in the home- not really personal finance.

But why is this?

I’ve thought about it some and I’d like to give you some of the perceived reasons why I think it isn’t a requirement in schools today. And, I’d love to hear your take on this too.

  • Money is a personal issue. I think one of the biggest reasons is that (even today) money matters is still considered a personal matter. It’s a bit like talking about politics or religion. The subject is taboo and off-limits.
  • Personal finance education doesn’t help. Education doesn’t always correlate to better behavior. Sometimes it seems that money management is perceived as something you have or something you don’t. And, while I do believe some of us are born with an innate ability to manage money better than others, it doesn’t have to stay that way.
  • Many administrators, school board members, teachers are bad with their own personal finances. I think some school leaders are struggling themselves to make ends meet, don’t have a budget or have never really be taught to manage their own money. So they may find it hypocritical to be teaching others.
  • The “System” is set up to create debtors not savers. According to a relative who has studied the education system – it was devised to make workers for the factories who would, in turn, buy gadgets and gizmos from that factory and ultimately become slaves to the factory. Why would this type of system want to empower its workforce to take control of its finances? People in debt are easier to control and are not really free.
  • Schools believe parents are already doing it. If money matters is a personal topic, the schools believe this too ought to be covered at home.
  • It’s too complex and vast a topic. A class on personal finance would need to cover investing, income, banking, taxes and on and on. It may be too much for the schools to take on?

Whatever the real reason(s) may be – I think it’s about time we start the discussion or implementation of personal finance education in schools.

I think the newly created CFPB (Consumer Financial Protection Bureau) is doing right be taking the initiative in this area and is calling for education to start. Here’s a white paper on their recommendation for K-12 finance education.

What are your thoughts?

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  1. Understanding money management leads to financial health and positive attitudes around money. People’s attitudes around money can be instrumental in shaping their character, plus promotes the desire to give back. The study showed that in lieu of school-sponsored personal finance lessons, many Americans turn to alternative sources of money advice and information. For example, 41% of respondents said they’re self-taught, while 37% said their parents taught them about finances. Just 12% said they learned about personal finance from teachers.

  2. I feel like personal finance is something that everyone will deal with when they graduate but is so under taught within the education system. Kids graduate with a good knowledge of the periodic table but don’t know the basics of credit, mortgages or loans. These are all things that I think should be mandatory as part of the education system. The more people know about finances the more they can take control of their own financial situation (and eventually reach financial freedom). Parents teach their kids the basics but I think the education system should also take responsibility by adding it to the curriculum. Even if it’s just the very basics it is better than nothing

  3. These are all excellent points, that are sadly true. But I wish they at least taught the basics…writing checks (still used sometimes) reviewing your bank statements, what factors determine your credit score, how interest works, etc. There are ways to touch on the basics without getting personal opinions involved. Basics would be better than nothing.

    • I’ve heard of some schools covering some of the basics like you mention Heather – but just doesn’t seem prevalent enough. Would be better than nothing.

  4. I don’t think that schools *can* teach personal finance. Kids learn how to manage their money by making painful mistakes with it. When they don’t learn early, they’ll make financial mistakes as adults instead – when the stakes are so much higher.

    We teach kids how to cook – by giving them food to work with. We teach carpentry – by giving them wood. We teach kids personal finance – by giving them money to manage, of course.

    I don’t think the schools will ever be able to enter this game, and compete with the attention and care that parents can provide when it comes to learning about managing money. It’s not complicated – just give your kid some money to manage (money you would have spent on him regardless) and then start having conversations about how he’s going to spend it.

    You’ll never learn these lessons in a textbook.

    • You make an excellent point Bret. Experience often is our greatest teacher and its often through failing we learn the most.

  5. I agree. This is a real pet pieve topic of mine too.

    Ultimately, as a parent I think it is my responsibility to train my child and we have tried to do that. I think though a big part of the problem is a lot of parents are really lousy with money too, and so even if they wanted to teach their kids, they don’t even know where to start, largely because no one ever taught them.

    Throw our consumeristic, I want it now, culture on top of that and I think it’s really a serious problem that is only going to get worse.

    • A bit like the birds/bees talk – parents don’t know where to start :) Hoping things change.

  6. Most practical life skills from how to make a simple carpentry repair to personal finance are missing from school curriculums (with the exception of an elective class here and there). I guess they’re counting on parents to fill the gaps, but it’s not like the parents always know either.

    • You may be right Stefanie – this could be an at-home issue.

  7. This financial ed issue has always concerned me. While I had both macro and micro
    Econ in college, the best course for me was a college Business Math class.
    I think parents would welcome it taught in K-12 and not feel it was getting into personal
    The whole field of Business is becoming a dying curriculum in High Schools.
    Business Education used to be a strong major in college but don’t hear much about it anymore.

    • Thanks Ron

  8. I agree with you Aron. The personnel at school can’t educate students about that matters because they find it very hard to have incomes.

    • Yeah, it’s too bad.

  9. Hello Aaron, you nailed it.

    I also think it is not taught in school because most teachers and administrators are poor at managing their own finances, so they can’t properly educate students too.

    Thanks for the reminder finance is a personal thing.

    Do have a great day

    • I agree with you Uche. Hard to teach what we (ourselves) aren’t very good at. Thx

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