Most High Schoolers Don’t Know How to Manage Their Money
High school students are studying up on calculus, advanced chemistry, and world history, but most aren’t learning fundamental money lessons to help them financially navigate the real world.
Kids are exposed to computers and technology all the time. Yet when it comes to buying the computer and financing it, they’re clueless.
Odds are your children will graduate from high school without being taught basic money lessons, including how to create a budget or write a check. Sadly, I know I did.
Although the recession raised awareness about economic issues and criminally differences in opportunities in economic mobility, it appears those heightened concerns have only prompted a few states to require a personal-finance class.
Interest is there, opportunity is not
An interest in personal finance among high school students doesn’t appear to be the issue. A recent poll found that 84 percent of high school students desire more financial education. Among 16- to 18-year-olds, 86 percent said they would rather learn about money management in the classroom than make financial mistakes in the real world.
Parents have also expressed concerns over their children’s lack of financial knowledge. According to an August survey by MasterCard, 64 percent of parents with college-bound children are worried about their children’s ability to manage money.
“You can’t learn a language in two hours, so having a two-hour visitor coming in to talk about money really doesn’t provide the students with what they need.”
State governments are so focused on teaching the core subjects of math and English that personal finance often gets overlooked.
“If you can’t read and you can’t count, all bets are off.”
Many cash-strapped states lack the funding to institute a personal-finance course.
Discomfort among teachers and parents
Getting teachers to feel comfortable teaching the subject may be a bigger challenge. If teachers provide students with misinformation about the dos and don’ts of personal finance, it can have serious implications on their livelihood. More than 70 percent of teachers polled in a nationwide survey said they are willing to receive formal financial-education training to teach a financial literacy class.
Many parents are also uncomfortable with teaching their kids about money management. Some parents lack confidence in their own financial management and knowledge. Since they haven’t learned critical financial values themselves, so teaching their children may do more harm than good.
Parents may be passing along bad financial habits to their kids because that’s all they know.
“To say it’s a parent’s responsibility seems unfair — unfair to the parents and unfair to the kids. You can’t ask people to be responsible for teaching something if they haven’t received the education themselves.”
— Ced Funches, founder of Schooold
Consequently, money is among the lowest priorities in conversations between parents and their children — below talks about the importance of good manners and the benefits of good eating habits. *
So what role should parents play in teaching their children about money?
Experts says parents don’t necessarily need to impart financial lessons to their children, but they should encourage discussions about the topic.
While parents may not need to teach their children about advanced subjects like 401(k)s and mutual funds, they can teach the basics, such as the difference between wants and needs. Another important concept is learning how to apply the time value of money. Not spending $1.50 a day on a soda can have a big impact on a person’s financial future, and that’s something that young kids need to understand.
Parents need to be financial role models. If you’re running around and you’re buying a luxury car when you can’t even afford to buy groceries without a credit card, you’re setting a bad example for your kids.
Schooold is the first platform that unites parents and children to learn financial lessons in a dignifying way. The issue at hand is the method of teaching people about money is outdated, slow and a tad insulting.
Money is personal
Some parents avoid the subject of money altogether because they don’t have any. My parents didn’t talk about finances whatsoever. They talked about keeping the rent paid and the heat on. I grew up extremely poor. We lived on welfare when I was very young and I always thought of having money as a adventurers quest instead of a tool.
Timing and empowerment
Is high school the right time for students to take a personal-finance class? Or should it be taught earlier, in middle school or even elementary school? For us, financial education can’t wait until high school because children begin to develop their understanding of money much younger.
I believe teaching financial literacy to high school freshman, sophomores and juniors syncs well with what’s going on in their lives — they’re getting driver’s licenses and figuring out how to finance their first car, becoming more aware of gas prices, and some are starting to earn money from part-time jobs. As seniors, they learn about the implications of taking on student-loan debt while they’re considering what college to attend. Imagine learning how credit works, before you go off to college and get bombarded with credit-card offers the first day on campus.
Supporters of financial literacy say getting high school students to feel in control of their own financial lives is a matter of finding the right teacher, the right curriculum, and enough governmental support.
I believe it is far simpler than that.
update 4/27/15
It has been 2 years since I first wrote this and nothing has changed. I’ve watched billions of dollars be given to “fin-tech startups” who have absolutely no idea how to even talk to the people who need help.
“You can’t solve a problem you’ve never had.” –– Ced Funches, Schooold
