How is Your Money Smarts?

How is your money smarts?  Did you know you can graduate collegeor get an MBA and never take a class in personal finance?  That includes the accounting, business and finance majors!  Very few high school students can even take personal finance classes.  Is money smarts important?

Photo by Chi King via Flickr


The financial crisis of just a few years ago has sparked a new interest in personal finance in high school.  A few states are including personal finance as a graduation requirement for a high school diploma.  There are school districts across the country that makes personal finance an optional course.  Sounds good, doesn’t it?  How effective are these classes?

According to the Jump Start Coalition, they found that the students who took personal finance classes were no more financially literate than the ones who never took the classes.  They pass the class, but fail to retain the information.  The National Endowment for Financial Education has been addressing youth financial literacy since 1984.  The material is available, why isn’t it working?

Their program has reached more than 5 million students and individuals in schools, youth organizations, community programs and other settings in 50 states.  What do the classes cover?  Topics include your financial plan, budgeting, investing, debt, insurance, and careers.  With that many people exposed to these excellent materials, I would think the results would be better. There are books, websites, online classes and materials too.

Does it work?

Is it putting it in the classroom that is the problem?  Various programs say they are fun, engaging, and relevant to the participants.  They use games or interactive online programs to teach financial literacy.  Some of the biggest credit card companies, banks and numerous other people are all trying to solve the financial literacy problem.  There certainly is a lot of material out there for children.  Why doesn’t it work?

Students attend school and this particular class for a maximum of five (5) hours a week.  How much influence or change can be accomplished in such a short amount of time?  At best, one class (if available) in personal finance may be given in a school!  In addition, students must take a variety of classes to meet graduation requirements.  How do you make the class more meaningful or have more impact on the students?


Personal finance is no different than anything else you learn, it takes practice.  You can practice doing homework, but what happens when you are finished with the class?  You still need to practice and practice what was taught to you.  Practice increases your level of understanding.  How can you continue learning and stay accountable?  The answer is parent involvement!

What can your parents do to help?  They can model good financial habits and help you continue to develop your own habits.  They can stress savings, living on less than you earn and frugal living.  Talking about it is not enough; parents must set an example for the children.  Children are very observant and learn more from what parents do versus what they say.  So come on parents set the example!

Final Thoughts

You can take the best classes at the best school or university and achieve Phi Beta Kappa or graduate Summa Cum Laude.  If you do not apply your knowledge or practice it, you will forget 90% in a matter of years.  Taking a financial literacy class is a great first step.

In fact I have written extensively about teens and financial skills.  Here are three of my articles, Financial Skills for TeensMore Financial Skills for Teens and Even More Financial Skills for Teens.  Your next step is to practice your knowledge with people who can help you become better at these skills.  If your parents are not good financial role models, they can change.  These classes can change family’s lives as well.

Students can teach their parents!  Why not?  I learn from my children all the time.  I learn from my students, friends, colleagues, strangers, blogs, written and spoken material.  You probably do too!  So let’s get on board to actually change things by practicing what we learn and change our lives.  How can you make a difference today?  Parents and students demonstrate good financial skills and practice them daily.  How’s your money smarts?

About the Author

By , on Aug 22, 2011
Larry is a former Chief Financial Officer (CFO), Financial Consultant and Entrepreneur. He shares his knowledge and perspective on personal finance, careers, goals, money and children, investments and managing money at krantcents.

Leave Your Comment (5 Comments)

  1. Shawanda says:

    Students not retaining the information they learn in personal finance classes should come as no surprise. We spend 12 years taking English, math, science, and history courses, and can’t remember 90% of that upon graduation. It’s difficult to defy a culture of financial dysfunction when you’re only exposed to ways to responsibly manage money 5 hours a week.

  2. Dee Cotton says:

    This makes a lot of sense. I’m at the age where I’m having to correct a lot of patterns that I’ve learned concerning spending. Even if I had a class in high school about personal financing, I’m not sure I’d remember it. However, it would have been nice.

  3. Bernard says:

    I feel that most financial information out there from parents, to teachers, to books, and to the media are all wrong. OK, maybe misguided. And I mean information about how to handle your money, how to manage debt, and how to generate wealth.

    To me the formula is simple: do what the rich do. Follow their steps…mostly their mindset.

    I’d say that 95% is mindset over strategy. It’s like running a marathon. If you tell yourself you are going to do it, your body will adapt. And, you’ll find the right strategies.

    What I’ve learned is that in order to reach our financial goals in life…we pretty much have to do the opposite of what we’ve been taught.

  4. Miss T says:

    Practicing what we learn…what a concept! I too have learned many things in the past that are valuable but I have failed to actually implement them and as a result I have forgotten them.Thanks for such a great reminder.

  5. Suba says:

    Agreed on all counts. I read about the report on students who took the financial literacy course not doing much better than those who didn’t. Parental involvement has been downplayed a LOT in the US. If parents teach the kids by setting an example, that will be much more influential than some curriculum they have to memorize.

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