I Care About Personal Finance, Not Money
6 November 2007
6 Comments
Financial literacy isn’t something that is formally taught. You might be able to pick up a class on running a business here or an investing seminar there, but most of us get one Consumer Education class in high school and then get to face the big bad world all on our own.
Your Consumer Education class probably wasn’t too much different than mine: the teacher explained how to write a check, had students sum up an article from Consumer Reports, and then let us play hangman and watch Disney flicks for the rest of the summer.
Financial literacy is apparently hard to teach, at least to a bunch of seventeen year olds who all think that they have better things to do. Maybe half have jobs, and a savings account. Checking accounts are complicated and investments are outright black magic.
From my experience, good personal finance is only learned one place: out in the real world, along with everything else. I started learning about the basics of personal finance because I liked this whole eating every day thing. Balancing a budget is a heck of a lot easier than working an extra couple of hours to pick up money at the end of the month.
Trial and error is how most of us picked up how to handle credit cards and checking accounts. But we want more, don’t we? Paying the bills each month isn’t enough. I want to be able to work for myself. I want to be able to take a couple of days off in the middle of the week if I need to. When I have kids, I want to be able to stay home with them.
A million dollars in the bank isn’t going to get me that — at least not anymore. Instead, I need to figure out how to eliminate my debt (which is just about all student loans), increase income and focus on what I really need to live my life. I can say I don’t care about money, because that’s only part of the picture. Where I’m working, how hard I’m working and benefits beyond money matter to me just as much how big my paycheck is.
Financial literacy is the way to get there, and just like my high school teacher thought, we won’t learn it sitting in a classroom. Instead, we’ll learn it by trying new things, reading blogs just like this one and deciding on what really works for us.
Yeah, I’ve been trying to learn by reading blogs and articles a lot as well! I think I have the basic ideas for most things, but when it comes to some topic, I think I might still be in the dark.
There should definitely be more concentration on financial literacy in schools, not a day goes by in which I don’t think about how much better off I would be now, if I would have been taught more about how money works and the importance of saving and living a fragile life. I’m still somewhat young, 28 in three days, so I’m teaching myself the important things about personal finance, so that one day I can teach my kids the stuff they need to know about financial matters and life in general. Great post, I look forward to reading and learning more from you in the future.
I agree that it is difficult to teach personal finance to high school kids; however, it is critically important and should be a required class. All you have to do is look at the personal spending habits of Americans today to realize the importance of better education in personal finance. How many times has it been reported that personal spending has exceed personal income – too many. It didn’t used to be that way.
It is difficult to teach anything of personal responsibility to many high school students as they are at the age of instant gratification. However, I remember the Home Economic classes where students were required to care for a computerized infant for a week. I think the night feedings, dirty diapers, and feedings every four hours gave a realistic experience and helped reinforce the importance of personal accountability. Why couldn’t the schools do something similar with personal finance?
I work with physicians on a daily basis. Some of these physicians net (after taxes, benefits, and expenses) incomes of over 300K per year yet they are cash poor. How can this happen? It happens because they are spending well above their means. Just like most other Americans they don’t own anything. Nearly every penny they make goes towards their debt. It’s expensive having a boat, plane, three cars, two houses, and a million dollar lifestyle. Yet they continue to work to finance their lifestyle well into their late fifties and sixties.
I started learning about the importance of personal finance about 10 years ago by reading every book I could get my hands on. I have not found one that I agree with 100% but have used some information from each to drastically change my future. Unfortunately, my experience has been that very few people are wiling to make the personal changes required as most are still in the age of instant gratification. This seems to be the common mantra: Why save and buy it tomorrow when you can borrow and have it today?
Finances should be a part of the math curriculum from kindergarten. If children start learning early, they’ll be more receptive to it in high school. If they aren’t at least they’ll have a solid base by the time they reach high school. My bank gave me a little bank in the shape of a lock when I was 4, I thought it was the coolest thing to fill it up with money and take it to the bank and deposit in my savings account. I firmly believe this is why I am a saver and it led me to open my first retirement account in high school. I never worked a real job in high school, but I saved every penny I got and ended up much richer than any of my friends that worked all the time.
We should all be writing out congressman’s to say that finances should be taught in schools. My DH and I have been trying to figure out how we can teach our nieces and nephew about finances without stepping on their parents’ toes.
Unfortunately, I just don’t think that more financial literacy in the classroom is going to get children where they need to go. There are a few subjects that really ought to be covered at home, and this is one of them.
Since the best way to learn is by doing, parents ought to be encouraged to include their children when paying bills, budgeting, writing checks, etc. At the very least, the information will be more real.
Great article Thursday, this is definitely a problem in modern US society. Unfortunately, we run into the problem of the chicken or the egg. We can’t have financially responsible children without financially responsible parents for them to look up to. However, we won’t have financially responsible parents without some kind of educational programs in our schools to teach them when they are young.
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