It only takes a global financial meltdown to introduce financial education to young people. That’s comforting. A new bill is in the works that will create a three year pilot program to require a finance basics course for high school seniors in six New Jersey school districts. It would cover some basics such as writing a check, paying off credit card debt, and obtaining a mortgage.
Personally, I’m glad this is beginning to take place, even if it’s just one community or one state at a time. Unfortunately, this is something that should be taught at home and isn’t something that should necessarily be part of a public education, but let’s face the facts. It isn’t being taught at home, so this is the next best option. I guess you could say the same thing regarding sex education. A lot of kids won’t get the proper education at home, so the burden falls on many schools, right or wrong.
Critics point to issues around the already crowded curriculum, and it is true that many public schools are already faced with trying to work with a shortfall of time, resources, and money. If you want to introduce a new course, it will likely have to replace something else, or in some cases, may even require a longer school day, which in turn costs even more money. Proponents of the changes say that the personal finance concepts can be incorporated into existing business or economics courses.
Requiring yet another area of knowledge to be included in the curriculum isn’t a perfect solution, but what are the alternatives? It’s fairly obvious that a good deal of the financial problems we’re facing right now stems from a lack of basic financial knowledge. There is plenty of blame to go around, but when you have a whole generation of people who have no idea how a mortgage works, or the ramifications of compounding interest on credit card debt, or the importance of saving even a little money, it’s no wonder people often find themselves in a bind.
So, what’s more important? Would high school graduates be better off knowing that Hernando de Soto was a Spanish explorer that discovered the Mississippi River, or knowing that you can ruin your life with just a small piece of plastic?
Too Little, Too Late?
I’d almost have to argue that this type of course is too late to the game if it’s targeted to high school seniors. Good spending habits are learned over the course of a few years, and the sooner the better. And let’s not forget the bad case of seniorits that goes around and has many seniors day dreaming about girls, college, and graduation parties.
I’d obviously like to see more parents take a hands-on approach to finance and lead by example while passing down good money habits, but we need to walk before we can run. If parents didn’t have this kind of education and can’t manage their own money, it’s obvious they won’t have much to pass on to their children. So, maybe by starting to introduce some basic financial skills at the high school level, we can at least begin to churn out some financially savvy new parents.
What do you think? Is the introduction of financial education into schools a good idea? Should it be done at an earlier age? Or should we keep the status quo?
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.