The following is a guest post from Briana Myricks who writes at her blog, How’s Married Life?
High school teachers emphasize preparing for the real world, but in reality, how many of the things you learned in high school do you use today? Has The Scarlet Letter been mentioned at any time outside of a classroom?
Do you utilize your US history lessons when it’s not an election year? Besides knowing what H20 means, what elements do you remember from chemistry class?
Part of a valuable high school education should include things you will definitely experience in the real world. One subject that should be taught is personal finance, as that’s something that can be used even before a student graduates. Since personal finance education is such a broad subject, what topics specifically should be taught in high school?
Personal Finance Education Needed In High School
How to balance a checkbook: Even though checkbooks and ledgers are going a little out of style with the use of debit cards and online banking applications, students should know how to balance a checkbook. This essential step is all about knowing how much money you have, especially after making a deposit or a purchase. Once a student gets the hang of balancing a checkbook, they have a better grasp of what money management is.
How to save for an emergency fund: High school students love to live in the moment, so very few of them actually think about something happening in the future. Learning about saving for an emergency fund is very important, as it will give them a head start for saving. They should know what constitutes as an emergency, which is something even some adults have a hard time grasping.
How to set up a budget: Budgeting is going to be important, no matter how old someone is. Learning to set up a budget includes knowing your expenses and your income, and ensuring the two will leave you in the positive, or at least breaking even.
Without a budget, you have a disconnect as to what you may be spending and paying for. Setting a budget, even when you’re in high school, helps you keep track of how much disposable income you have after your expenses are paid for.
Investing basics: When you hear from the experts, many of them emphasize that it’s never too early to start investing. When students learn the basics about what’s included in investing and how to do it, it may spark their interest to look into it further, or give them a general idea of it if they ever become interested in it later on in life.
Insurance basics: High school students may have heard about car insurance or phone insurance, but again, there’s a disconnect to it since they usually don’t pay for it. It’s important that they learn what insurance is, how it works, and what it can be used for. There’s no doubt they’ll need to know about things like deductibles, and it could be sooner than later that they need the knowledge.
How to manage credit: Once students graduate from high school and go off to college, that’s a time where they become vulnerable to credit card companies, and when many students find themselves discovering debt. Teaching them ahead of time, before they rack up debt, is extremely important. Students need to know what credit is, how to look for interest rates, and learn the importance of paying back the money they borrowed in a timely manner.
These lessons are sometimes learned the hard way in adulthood, but if personal finance education is included in high school curriculum, students can avoid the hard lessons.
Are these the right lessons in a personal finance education that we need in our high schools? What would you add to personal finance education lessons?
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I agree with every item on your list, Briana – and I’m a huge supporter of increasing financial education for students before they hit the real world. I also think that teaching the “why” is just as important as teaching the “how.” Teaching someone how to budget, create an emergency fund, and how to manage credit is great, but it may not really “stick” unless they are also shown the consequences of not doing it, or not doing so correctly.
Travis,
I actually disagree to a certain degree. I do not think most high school teachers are qualified to teach personal finance topics. While they can help students understand the basics like balancing a checkbook and budgeting, I definitely do not think that they should be teaching investing to students or giving insurance advice.
You are incorrect. I have been a Business/Technology Educator for many years in high school and college and am completely qualified. I have directed a very successful Academy of Finance Program which is recognized on a National Level. There are many, many like me and the National Academy Foundation oversees many of us.
Thanks Travis! Yes, it’s very important to know the consequences before hand. Especially since a lot of high school students assume they’re Superman or Superwoman and they’re the exception to all the rules. Seeing first hand what financial mistakes will do can prevent a lot of issues down the line.
I think as long as students are being given knowledge of how to learn, and how to teach themselves, then I don’t believe they need to have their hand held through everything. We all figured out how to buy insurance right?
What’s important is that students are taught the importance of doing research and exercising diligence – then they’ll be covered for any eventuality.
Jon, I love the sentiment of your comment. You can lead a horse to water but you can’t make him drink. The only thing that I really wonder is if we really all figured out how to buy insurance or the right insurance to buy? I bet the answer is no for a lot of people.
Very good stuff! I was taught about the importance of money management very early, and I did the same with my kids as well. My parents (both 69) are retired and spend 4 months every winter at the gulf shore. I’m 49, and also retired. My kids are both grown and married, and seem to have gotten the message as well. If you are willing to be an active participant in your financial life, you can make great things happen, and starting kids off early with this concept will really help.
I completely agree that balancing a check book is an essential first skill when it comes to personal finances. It sets a foundation on which further budgeting and money management can happen. Great article.
I’ve been teaching personal finance to HS students for several years. It is amazing how they truly eat it up. They love talking about money. Their enthusiasm about the subject matter makes for interesting classes – for the students and teacher.
Money related issues is the #1 cause of divorce in America. Just think how our culture would change in a couple of generations if we could buy students in early to sound money management practices. That is what I try to accomplish every class I teach.
I love this article! I am a firm believer in teaching our children as early as possible about finances.