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Archive for August, 2019

5 Reasons High School Students Should Be Taught About Finances

The fact is the overwhelming majority of Americans, and possibly people in other countries, do a bad job of handling their money properly. We tend to believe it’s because most people really don’t think about learning anything about finances until they get into trouble. If they did want to know more where would they go, besides a few blogs I know of or maybe an accounting firm? 🙂


David Robert Bliwas via Compfight

Obviously I was in high school in the past. I learned a lot of things I was never going to have any use for. Some of it I enjoyed, but since I never saw myself as becoming any kind of scientist or a historian, I’m thinking something I could have used, that would have made my early adult life easier, were lessons on personal finance. That would have helped me a great deal, not only when I had to go out on my own but even in college.

How? Let’s look at these 5 thoughts of mine:

1. The concept of college loans and interest.

We all know how much it can cost to go to college. Some kids believe that if they don’t go to a top name college that they’ll be looked down on in life and never get the job they want. The reality is there are a lot of successful and famous people who went to a state university where not only is the education very good but the costs can be drastically lower; in some states students qualify for a free education.

If students were taught about finances and long term debt in high school, they might understand the need to work harder and concentrate on getting a scholarship to help defray some of the costs of a college education. Many might realize that they could start at a community college and transfer if they still want a higher degree, saving thousands of dollars.

2. Understanding credit cards.

When I went to college, students weren’t offered credit cards like they are now. These days, some kids are being offered credit cards before they’ve graduated from high school. When you’re not fully educated, thinking about paying the minimum on a credit card seems like a no-brainer; who couldn’t afford a minimum of $25 a month?

What if more students understood the concept of compounding interest, and how long it takes to pay off bills when only paying the minimum amount? Would they accept the liability of paying a bill over the course of 11 years or try to get it paid off within 3 by making slightly higher payments? Maybe they’d understand that having more credit cards and paying minimum balances restricts them with long time serious debt that could affect their ability to buy a car or a house or even keep up with payments on other loans.


Julie Kertesz via Compfight

3. Monthly budgeting.

A friend of mine never had to worry about this until having a car accident on an icy road and had to buy my first car, as he received his first car as a gift from his parents. He quickly learned how fast his money was draining away trying to keep up with a $197 monthly car payment for the first time.

It might not sound like a lot of money these days, but in the 80’s that was a lot of money, especially when it was suddenly an unexpected payment. If he’s known about both budgeting and putting money away, as well as having a better car insurance plan, he might have been able to handle it better. In his case he lucked out by finding a different job that compensated for bigger bills, but that doesn’t happen for everyone.

4. Learning how to economize.

When you don’t have a lot of money, eating can be a complicated business. Not enough people are taught how to use coupons; even fewer are taught how to shop properly to help their money spread further so they can eat better.

For instance, some stores have days where they sell certain things for less money. Buying items like spaghetti and sauce, frozen vegetables and other items can add up to multiple meals at lower costs. Learning the importance of interpreting the cost of things based on the tags at the grocery store can save a lot of money when you know what you’re looking for. These are things almost everyone experiences early on; learning in high school could help everyone in some way.

5. Learning how to save money for your future.

When you’re young, you probably never learn anything about putting money away for your future. There’s always a warning signal in the news that Social Security might go away because it’s underfunded. Whether it does or not, the amount you get back might not be enough to take care of you when you’re ready to retire.

If students were taught about saving money, they would start putting away money earlier so the balance would have time to grow. Investing early allowed them to wait out the bad times because good times always come around, and they get used to putting money aside for it and might even feel comfortable increasing their monthly contribution.

Wouldn’t it be nice if young people learned some of these lessons while they could still benefit greatly from them? If your child’s school doesn’t teach it, either you should start teaching them or find a local source that does.