Teaching Teens About Money Management in High School

I have been giving this subject a lot of thought lately. After I read “Should Schools have Money Management Classes?,” an excellent post from Fortune Watch. As far as I can tell, there are two “real life” subjects being taught in high schools today: sex education and driver education. Both subjects are aimed at helping students survive or perform better in the real world.


Photo from BigFoto

Then the question is, how come we are not teaching our children about money?

Here are some factoids:

  • The official poverty rate in 2006 was 12.3%, or 36.5 million people lived in poverty (U.S. Census Bureau)
  • Average college student owed $3,262 in credit-card debt upon graduation (Liz Pulliam Weston at MSN Money)
  • Personal saving rate has declined into the negative territory (US Government Accountability Office, slide 14)
  • Revolving consumer credit has reached a record level of $907.4 billion and is growing by 6.6% per annum (CardTrak.com)
  • Average person in the civilian labor force owed $6,215 in credit-card debt (Population data from Population Reference Bureau)
  • Average U.S. Household owed $8,249 in credit-card debt (Household data from U.S. Census Bureau)
  • In 2006, there were a total of 597,965 non-business bankruptcy filings (U.S. Courts Bankruptcy Statistics)

Based on these grim numbers, I am surprised that money management is not a mandatory subject in high school. What are your thoughts?

About the Author

By , on Sep 14, 2007
Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

Leave Your Comment (24 Comments)

  1. Gregg says:

    Money management is a must. Even if you don’t desire a planned future or care if you have a dime in your pocket, you need the principles on how to think through or calculate “a deal”. For a sack of potatoes, I’ll trade you my horse and plow.

  2. Annonymous says:

    I didn’t read the article but my school has tons of business classes. Next year I’m taking money management as a sophomore and many more my junior and senior year

  3. vix says:

    I just wanted to thank everyone for being so passionate about this topic. I will opening admit to being financially illiterate. My parents did not instill the importance of saving, explain investments, debits or the effect a student loan can have on the future, and now the future is far from bright. I have to wonder what kind of society do we live in that an 17/18 year old kid, who cant vote or drink, and has little to no assets can be handed a 30 thousand dollar loan! Talk about a debt sentence! Mandatory education, that encompasses on personal finances but on financial responsibilities would, not only save individuals from the stress and hardship of debt but go along way towards preventing future economic disasters.

  4. Derek says:

    Money is not taught in school because money is the biggest form of control in the world today. If our children are taught how to manage money wisely and avoid debt those that fund the schools and curriculum’s that are taught would be directly impeding the progress of their own goals. What needs to be understood more than anything is that banks and government get what they pay for, if they don’t they change the system. So what is being produced is the desired result from the highest levels (people trapped by debt). The entire aim is financial collapse so a new money system can be implemented as the solution to the problem we face.

  5. mamajama says:

    ‘Money smarts’ should definetly be taught to high school students. I think the reason that it is not is because there are already so many subjects that are required for a diploma and there is just no more room in the curriculum. Perhaps it would be better to integrate this kind of program within a math class as a 2 week unit or in an economics class. I think school administrators would be more willing to teach kids about money if they didn’t have to create an entirely new course.

  6. Jilly says:

    1) I could not possibly agree more — I work in a social work agency and the root of 7/8 of the cases we see comes down to poor money management or stress related to money — it manifests itself everywhere. I don’t necessarily think high schoolers will retain any of the information taught in a one-semester class, but I do think this should go hand in hand with math classes, and be a curriculum of life skills that we begin during middle school and continue throughout college — even to desensitize money as a topic of conversation, or to demystify things like the stock market and investments would go SO FAR toward establishing some kind of equilibrium. There are business classes available as electives in many schools, but are being phased out by our systems of standardized testing and teaching to tests.

    2) Re: parents being responsible for most of this teaching to date — makes one wonder whether parenting classes should also be institutionalized as preemptive rather than disciplinary practice. Sex ed is only the beginning and lord knows parenting goes hand in hand with finance. Nothing to curtail the birth rate like a good understanding of the economy…

  7. Brad says:

    If my wife had been given the chance to learn about finances in high school there is a pretty good chance that she wouldn’t have a lot of the debt that she has now. Her parents tried to teach her, but they obviously didn’t do the best job of it since she graduated from college several thousand dollars in debt.

    It’s a shame that it isn’t taught … I honestly don’t understand why it isn’t.

  8. Robin Bal says:

    Thanks for the mention about my post mate, appreciate it. Schools definitely need to focus on Personal Finance as a compulsory subject. I agree not all are going to follow what they learn but many will.

    I started working at 20, had a decent income, knew nothing about Finance Management, end result I kept spending what I earned, needless to say I landed up in unnecessary debt many time. Guess I had to learn the hard way, today if I look back I could have retired yesterday, had I known a little about how to manage my money.

    Good post. Take care and cheers.

  9. Pinyo says:

    @m – thank you for your passionate response. I do agree with two points you made (1) there should be formal teaching of skills needed in life and (2) [some] parents cannot be counted on to teach their children real world life skills.

    As far as striking a balance between purely academic subjects versus real-life subjects, I think it’s a very difficult question to answer. It would be very hard to decide how to trade off what we already have for these life skills subjects.

    Or do we just extend the school hours?

  10. m says:

    As a former high school teacher, I believe much of what is being taught in public schools is a complete waste of time.

    So many Americans are not informed in the most basic but essential topics, such as how our government works, current national and world events, basic history, geography, personal finance, career and job information, health, fitness and nutrition issues, and career and work issues.

    We should be teaching children first and foremost the skills needed in life. How can we leave such important teaching up to parents, many of whom don’t have the skills and knowledge themselves, don’t have time to teach it, or for whatever reason manage to teach these things to their children? There should be a systemic effort to prepare Americans for real life for their own sakes as well as for the benefit of society in general.

    What good is chemistry or algebra when one leaves school not even knowing how to create a resume, what a 401k is, or what careers will allow one to live a decent life and which will leave one struggling for a lifetime.

    I received NO financial teachings at home and as a result, despite being fairly responsible with my money (as best as I knew how), having a solid, supposedly top notch education, and having worked very hard for many years, I am in my mid 30s with nothing to show for many years of hard work and only now starting to learn about personal finance. I am now struggling every day financially and may never catch up or get to a point where I am not struggling just to get by (due to a variety of factors in my life right now).

    Parents can not be counted on to teach their children real world life skills. We must begin teaching these things at school to ensure that as many youth as possible are able to bring to adulthood skills needed for both personal and societal advancement and success. We are doing a large disservice to our youth and our nation’s future, and that is not even taking into account the poor state of so many American public schools and the lack of quality education children recieve in general in any subject, especially in schools in lower income areas.

  11. Pinyo says:

    @DFR – I can see your position as well, but I think making it available would already be a huge step forward.

    @Happy Rock – I didn’t do so well financially either.

    Now that I think about it more, the class can even focus on something as real to high school students as funding college expenses. I certainly would have gone to a less expensive school if I had know how much I damaged my parents’ retirement plan.

  12. I really think there should be something taught. I know I had no idea about money when I graduated college!

    The problem like most things, is that what would be taught wouldn’t necessarily line up with your values. There isn’t a correct answer, like there is in driving. But something is better than nothing.

  13. Pinyo says:

    @fiscal musings and Flexo – welcome to Moolanomy. Wow, you both made the same point! You are right, I may have came off a little strong suggesting that the class should be mandatory. I agree that it should be mandatory that high schools have this class available to students as elective.

  14. Ana says:

    fiscal and flexo: I believe it SHOULD be mandatory, not just an elective. You two are right, the top students will skip such a class unless it is required, and they will need it also…especially if it covers the subject of student loans. I am a good example of a bright student who just didn’t know HOW to manage money. I did learn by experience, but every learning experience in money tends to set you back and is painful.

  15. Flexo says:

    A money management class should be offered in high school… as an elective… but it is a class that simply won’t be chosen by the more intelligent and motivated students, who will opt for more interesting electives unless forced by their parents.

  16. fiscal musings says:

    Whether or not they should make it mandatory or not is another issue, but I think that it should at least be available. Even if you force someone to take a class, it doesn’t necessarily mean that they’ll learn it. But it should be an option to pursue for those that are interested.

  17. Pinyo says:

    @Patrick – that’s a very good point. Many people think credit cards and installment plans are gifts from heaven. Then don’t realize they are keys to financial imprisonment.

    @Trisha – welcome to Moolanomy. I agree. Also considering many people do not go on to college or trade school, this make money management and other practical life experience classes even more important.

    @Brian – that’s really excellent. What did they teach you in 5th and 8th grades anyway? Did you find these classes effective?

  18. Brian says:

    In Florida (Tampa Bay Area) I was fortunate enough to be taught money management early. I had three mandatory money management classes, each in the last year of my elementary(5th), middle(8th), and high school(12th) education.
    I believe all of the public schools around here participate.

  19. Trisha says:

    I wish they taught something like this in my school. I’m struggling right now and sure could have used the information.

    Plus, money management is a lot more useful than something like American History. Money management is used by all, and history only for a select few.

  20. Patrick says:

    Money management should definitely be taught. Most kids graduating high school think debt and payments are a way of life. That it is to be expected and is normal. Well, perhaps it is normal, but I don’t think it should be normal. I will begin teaching my children the basics of money at an early age. Hopefully they will learn and understand how it functions and how to handle it.

  21. Pinyo says:

    @David – I like your post (didn’t read through all the comments yet). I am on the same side with you an think we should definitely teach this.

    @Plonkee – But budgeting is boring, that’s why it failed (you can tell I do not budget right?). To quote David:

    “A simple personal finance class with discussions on retirement, the negative impact debt can have on a person, automobile financing, and saving for the future instead of buying for the now should be implemented in every single high school across the country.”

    I think the key is to show them the trade-offs they are making by not saving, spending too much money, and getting into debt. The idea is just to get them interested.

    @DFR – I agree is should be school that teaches money management because look at the statistics…obviously, adults aren’t all good at money management either. We need someone who knows to teach. We cannot count on parents with bad financial habits cannot give their kids good financial advice.

    Thank you all for commenting.

  22. Ana says:

    I firmly believe responsible money management SHOULD be taught in school. I learned how to manage money from my parents…and that didn’t work for me! Until this past year I was making all the same mistakes my parents have before me, with the exception of declaring bankruptcy. I consider myself lucky to have found a better and more sane way to manage money now; but I would be in such a BETTER position if I had learned this back in high school since right now I am trying to fix 16 years of poor money handling as an adult.

  23. plonkee says:

    We did a little bit of stuff on money at school, mostly about mortgages and budgeting. The trouble with doing personal finance education with teenagers is that its not really applicable to them (we were in compulsory education so under 16). I find that for stuff like budgeting, you really need to have your own information, otherwise you aren’t really living it.

  24. David says:

    I guess a lot of people don’t think this should be done, as I wrote a post saying the same a while back and people didn’t seem to think it was a good idea. But I think we should teach it, its an important part of life!

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