Should We Make Our Kids Take Finance/Business Classes?

68 Replies

So this is a subject that I’m very interested in and I’d love to get everyone’s opinions.

What do you think about mandating Finance class for grade school children?

I’m not talking about making them take it one year of high school, or making it a part of math class - I think a lot of people (at least on BiggerPockets) would agree that there should be some improvement in our finance/business curriculum in public schools. No, I’m talking about full-blown making it a focus of the United States (and the world’s) public schooling curriculum - given as much priority as language, math, and science throughout the entire 12 year duration of public education.

My (perhaps naive) opinion is strongly in favor. Let me know if you disagree!

Here’s my argument:

When I was growing up, I was a pretty good student. I got decent grades in Math, English, and Science, though I was certainly lacking talent in the art and music departments. But there was one subject that I didn’t master. I didn’t even get the basics down. In fact, I was never even taught it. That subject was finance.

Like it or not, in our capitalist society food, shelter, transportation, wealth, and power stem largely from one thing - money. The fact that we don’t absolutely mandate the education of all things money through the duration of our children’s schooling is totally mind boggling to me.

Sometimes people say that finance is boring, that it is a study children might not enjoy, and that they might not comprehend.  To that argument, I’d repeat what I heard growing up every time I didn’t like a subject in school, but had to do my homework anyways:

Too Bad.

A lot of kids don’t like ANY courses in school. We make them go anyways. That’s because we believe that those things are part of life. We believe that they are necessary skills for them to develop. What about money matters? How can they not be at or near the top of the list in subjects that are critical to our children’s development as human beings and as effective citizens?

Let me leave you with one final thought.  Have you ever heard someone say, “Oh he’s really good at that - he’s been doing basketball/violin/piano/coding/insertcoolskillhere since he was six”?

Yeah - he’s good because he’s been doing it since he was six.

Let’s make the world’s kids great in what really matters for them. And let’s get them started early.  Let me know your thoughts.  AND if you think some sort of change could be realistically implemented.

While this is an interesting concept, I do not think there would be a way to realize it.  Parents cannot even agree on the concept of allowances -- no allowance, allowance for good grades, allowance for chores, allowance just because, etc.  I can't imagine the ongoing battle on what concepts would be taught, and the uproar that would ensue when a school tried to teach a child a different concept than the parents believed and lived by.  Economists have different schools of thought.  Financial advisors are all over the place. Even basic ideas like savings can cause huge arguments within the same family, much less a classroom or citywide school format.  I see the high school class that teaches how not to get mired down in credit card debt, how to establish good credit, etc., but that's about it.    

@Scott Trench   I agree with you that Finance should be taught in school. 

Basic finance classes should be mandatory for High School students, and while I agree with @Lynn M. that all parents and financial advisers follow different advice and guidelines. The class could focus on the facts and teach things like how different financial concepts work such as APR, Compound Interest, Mortgages, Credit Scores, Stocks, Bonds, IRAs.

I don't have any kids of my own, but are there any resources out there already geared towards teaching kids concepts like these? If not might be a good money maker.

Yes, I agree with @Lynn M.

It would be chaos and eternal debate as to what the curriculum would be. Then you would need to consider how different states, counties, cities would be teaching different curriculum because of drastically different socio-economical lifestyles.

I live 30 minutes out side of Baltimore and I guarantee the schools in our district wouldn't agree to teach the curriculum that the schools in Baltimore City teach (and vice versa). I think it's a really great idea and agree completely that kids need to be exposed and active in financial principles and learnings early on. I especially want my kids to understand money and that money doesn't control them---they control money. But I don't think that is something that can be taught in school.

I think parents need to take the time to implement these teachings and practices in young children and adolescents with constantly so that when kids start making money they aren't mesmerized with idea of having cash but rather understand how to control and handle cash which in turn gives them more freedom to think of how to use that money to make more cash. This was a really cool thought and post and I don't know if I want to type more to expand upon my thought on the issue but looking forward to reading other opinions on the matter.

There are a lot of things that are important that we want our kids to learn, but there is only so much time.  For the reasons above and many others, I do not think that is something that needs done at the schools.  What I would like to see schools concentrate on is holding a higher standard, remove lousy programs like no child left behind, and give kids the grades they really earned.  It will allow the children to learn better and give those that put in the effort, the ability to standout.  Standardizing and testing can not only show where kids stand put point to holes in the various schools.  Before I get everyone angry- I understand there are issues and drawbacks to all of these things.

@Scott Trench   I talk about our rentals to my daughter who is 13, she knows I believe people who can and do develop good credit can have more opportunities because their cost for money is less.  She knows we work hard and hope she will too so her life will be easier than ours was starting out.   I have talked to her about understanding costs for simple things like using an atm when you take out $20 and have a $2.50 atm fee vs. using your bank without fees or if it is not an option take out $200 if you can stretch it over a longer period so your cost for the funds is lower.

She knows I believe in saving for what you would like to have and don't buy it if you don't have the money or don't need it.

I think financial education is important and comes from home.  We have gone over what bills are and how it will be important for her to have a good education because money doesn't grow on trees.  Most families don't talk as openly about finances but I want her to understand without having to learn the hard way.  I think it also comes down to interest.  If she is open to a conversation and is curious it has paved the way to more interesting discussions.

I have also talked to hear about a Roth IRA once she is old enough and the benefits to the long term growth if she starts really early.

I have had her do some investing/finance simulators for kids, that she enjoyed.  She thought that they were a little basic but a good experience.  

When I was in school in the 80s one part of our class (I think it was social studies) did this. It was part of life skills. We picked out a house to rent from the paper, made a budget to include menus and the prices for meals. We did talk about APR. I remember being disgusted that my patents, if they were to follow the 30 year mortgage at. 13% , would pay I think it was 100000 for a 45000 home.
The kids who did the calculation stuff like this were in a class called Consumer Math. Those kids were not in algebra trig or geometry. I remember the book had all of those types of financial problems and "real world" scenarios. That class was not a requirement, but was seen as a remedial class. I would totally support a curriculum that had this information!

Originally posted by @Scott Trench :

So this is a subject that I’m very interested in and I’d love to get everyone’s opinions.

What do you think about mandating Finance class for grade school children?

I’m not talking about making them take it one year of high school, or making it a part of math class - I think a lot of people (at least on BiggerPockets) would agree that there should be some improvement in our finance/business curriculum in public schools. No, I’m talking about full-blown making it a focus of the United States (and the world’s) public schooling curriculum - given as much priority as language, math, and science throughout the entire 12 year duration of public education.

My (perhaps naive) opinion is strongly in favor. Let me know if you disagree!

Here’s my argument:

When I was growing up, I was a pretty good student. I got decent grades in Math, English, and Science, though I was certainly lacking talent in the art and music departments. But there was one subject that I didn’t master. I didn’t even get the basics down. In fact, I was never even taught it. That subject was finance.

Like it or not, in our capitalist society food, shelter, transportation, wealth, and power stem largely from one thing - money. The fact that we don’t absolutely mandate the education of all things money through the duration of our children’s schooling is totally mind boggling to me.

Sometimes people say that finance is boring, that it is a study children might not enjoy, and that they might not comprehend.  To that argument, I’d repeat what I heard growing up every time I didn’t like a subject in school, but had to do my homework anyways:

Too Bad.

A lot of kids don’t like ANY courses in school. We make them go anyways. That’s because we believe that those things are part of life. We believe that they are necessary skills for them to develop. What about money matters? How can they not be at or near the top of the list in subjects that are critical to our children’s development as human beings and as effective citizens?

Let me leave you with one final thought.  Have you ever heard someone say, “Oh he’s really good at that - he’s been doing basketball/violin/piano/coding/insertcoolskillhere since he was six”?

Yeah - he’s good because he’s been doing it since he was six.

Let’s make the world’s kids great in what really matters for them. And let’s get them started early.  Let me know your thoughts.  AND if you think some sort of change could be realistically implemented.

HI Scott,

I was a computer science major turned finance as I found my calling but still an engineer at heart.

The problem is in school they only teach the fundamentals of finance and theory (time value of money, real rate of return, cap rates, arbitrage, velocity of return, options, stocks, derivatives, and etc). This stuff is great but I think what was missing was how to link these concepts in a way that would be applicable to different stages of a persons life. I often thought of this as well and how I would impart this information in a meaningful way to others who were younger allowing them to get a head start in life. 

The problem is the curriculum never taught what money is, the history, practical application, and how the flow of money (currency) & regulation of the financial system can be used to manipulate the value of assets causing more violent boom/bust cycles than if it was left to a more lassez faire type market.

I have lost any hope in today's US school system: 30+ kids in a class,  teacher's unions, "no child left behind", "Common Core, a.k.a. rotten to the core" and $250k student loans - pick your poison.

Today's parents are too lazy to spend time with their kids so they try to offload their parenting responsibilities to the schools. If you want to teach your kids the things that are important to them - you have to do it yourself. Please spend 30-60 minutes a day reading and discussing economics with them. There are plenty of good books out there that with your help can be very beneficial to your kids.

I have started my kids at age 8 with books like "How the economy grows and why it crashes", The Uncle Eric series (Whatever happened to penny candy, the money mysteries, etc.) and now at age 9 we are reading Rich dad poor Dad. They enjoy our reading and discussion time and get disappointed when we have no time due to school activities.

Don't cop out, do it yourself. 

@Bobby Narinov I agree with you. Take responsibility to teach your children at home. I bought Kids Cash Flow and play the game with my children to teach they to win the game of money and get out of the rat race. The game is genius !

We've been playing well over a year now; one Ages 4 now 5, the other age 5 now 6. It's fun and the concepts are learned in a fun environment.

The Department of no education and Public schools create employees with no financial education whatsoever. With Federal control of education it's only worse, rotten to the core -'common core' group think, dumbing down bright students. Parents take control and take on the responsibility of providing financial education at home.

We enjoy the game, and it's taught my wife a lot about money too!

Happy investing.

1st reaction is that it's a great idea.  2nd thought is that the public schools would never be willing or able to deliver a useful education in finance.  I'd bet they'd do more harm than good.

I think it's a good idea, but not at all hopeful about its successful implementation in our government schools. 

I do think parents should teach their kids personal finance and investment.  I'd add innovation and entrepreneurship. When they aren't giving out jobs, create your own.  Better yet, create 10 jobs. Give your kids a huge advantage. Don't have the knowledge yourself?  Well, there are these useful inventions called books and the Internet.  Embrace websites like BiggerPockets. Learn together.  

It wasn't until I was a college graduate that a guy I just met white boarded the rule of 72 for me. Epiphany.  Do this for your kids. Makes math more fun. 

I strongly agree with the concept of beginning to teach financial literacy at a young age - and continuing through the end of high school.  It would be great if it was a part of school curriculum in a meaningful, comprehensive, age appropriate way. 

There is a financial literacy program available to everyone, sponsored by the credit union industry.  It is shown on TV in some areas, and there area episodes available to all online at www.bizkids.com

The US Mint offers lesson plans and more financial literacy support activities with an elementary school focus.  Their website is www.usmint.gov

There are also some really good, age appropriate books out there to help.  Full disclosure - I worked for a local credit union for several years and my focus was financial literacy for children and young adults.  If I can be of help, please let me know.

Yes, personal finance should be taught, however, grade school is getting a little ahead of things, the math skills aren't there yet to go into evaluating opportunity costs, differences in interest charges or the maturity to concepts of priorities of a car payment or insurance or rents or life insurance, I doubt the average 6th grader would get it.

Simplistic ideas of products, costs, profits and business should be taught, from the time they are old enough to have a kool aid stand.

I'm speaking from a position of teaching the subject, elementary school is pretty objective, facts are taught, business and finance quickly get into subjective thinking which really isn't developed as to making choices until the 7th and 8th grade as well as the math skills needed to apply concepts.

Personal finance includes understanding investments vs savings, a 5th grader can get savings, but not yields of mutual funds, IRA advantages, what types of risks should be insured and why, comparing insurance, how and when to borrow......heck, we have adults who can't get it and why it should be required in high school.

I'm not sure there would be enough basic information that could make up a class for 45 minutes 3 days a week ( like my Spanish class) over a school year.

IMO, the introduction should begin at the 7th grade.

AND!!!!!

Can you believe it, some kid can go to medical school and never have to take a finance class! Dentists and young doctors are the favorite targets of insurance salesmen, stock brokers, Realtors and others selling financial products, and unless they took some classes as electives, they are on their own.

It doesn't matter what your kids end up doing, wealth can be built over time from almost anything, the key is in making good personal finance decisions, if you can't do that you're sunk regardless of what you do. :)    

It seems kind of crazy to me that a society the runs based off money doesn't teach the basics of how it works to our children. Even most college graduates have probably never taken a personal finance course ever in their life. It's an afterthought if it's done at all.

I actually did a thesis on the concept in college. My conclusions were basically that people who have taken a personal finance course on average had improved financial outcomes, but it was a weak predictor. I suspect it's weak because of a selection bias on who takes that kind of class. As someone else mentioned, it's often used like a remedial course. I know in my high school the only kids to take the one business course offered did so as an alternative to taking a more difficult math class. A bigger predictor to improved financial outcomes was if their parents taught them about money.

So my thoughts are that:

1. Even a single personal finance course would probably be helpful

2. But more would probably be better

3. And parents ought to be teaching their children about money

Of course the problem with number 3 is that many adults have never really been taught anything about money so it makes it hard to teach their children. So schools should be picking up the slack. If they did, maybe in a generation or two there would be less money problems in the country. That would help not only individuals but the whole economy.

Of course actually getting it implemented wouldn't be easy. There would be a lot of politics about it among teachers, school administrators, and of course, politicians. When I was doing this thesis I talked to some various people about why it wan't required at my college. The answer was basically it's not because it never has been. It's hard to add more required courses. You'd probably need to remove a different course from being required to make it work because you can't have too many required general education classes. And all departments in the college would fight tooth and nail to make sure it wasn't one of their courses that got removed. So it would be very difficult to add just one course at one college. Imagine the difficultly of doing it nationwide.

@Scott Trench  one of the organization I'm involved with is Junior Achievement and it actually does teach grade school kids finance but its program is only in underserved communities. 

If we start teaching basic finance in schools,  the teachers might figure out what a ridiculously bad deal they are getting and they will all quit. 

Then who will teach our kids to follow their dreams and passion and the money will follow? 

I think some type of personal finance should be mandatory. It should cover the basics such as banking accounts, credit, credit scores, saving, etc.  Just like many of the credit scoring sites have ways to see how credit scores are affected by different behaviors, I think they could design curriculum to do that, and make it interesting, and pertinent to real life. 

Too many kids get sucked into applying for easy credit, student loans, etc. and all of the sudden their scores are in the tank; and they're in debt they'll never dig out of, because they don't understand how important credit scores are. 

I'm surprised that Experian, Transunion, etc don't work with schools to get such a curriculum into schools, or banks for that matter. 

I have always said the book The Millionaire Next Door should be mandatory reading for anyone graduating high school. It  is full of good advice, but it primarily teaches to live BELOW your means instead of spending money on useless toys. Save you money and invest it in something sound. Finance classes should be taught in high school. The time value of money concept is very important. The kids should be required to have something like a Texas Instruments Business Analyst calculator and then learn how to use it.

There should be general topics on investing in things like stocks, mutual funds, ETFs, and of course real estate. 

Originally posted by @Joe Fairless :

@Scott Trench one of the organization I'm involved with is Junior Achievement and it actually does teach grade school kids finance but its program is only in underserved communities. 

 Joe - I'd love to discuss this further.  I am currently involved in a charity out here in Denver that helps those in financial crisis.  It's good work, but I also want to donate my time to work on what I believe is the fundamental problem - education, especially at the early education level.  Could you send me a link or more information - scott at biggerpockets dot com.

Originally posted by @Ben Grotte :

Yes, I agree with Lynn M.

It would be chaos and eternal debate as to what the curriculum would be. Then you would need to consider how different states, counties, cities would be teaching different curriculum because of drastically different socio-economical lifestyles.

I live 30 minutes out side of Baltimore and I guarantee the schools in our district wouldn't agree to teach the curriculum that the schools in Baltimore City teach (and vice versa). I think it's a really great idea and agree completely that kids need to be exposed and active in financial principles and learnings early on. I especially want my kids to understand money and that money doesn't control them---they control money. But I don't think that is something that can be taught in school.

I think parents need to take the time to implement these teachings and practices in young children and adolescents with constantly so that when kids start making money they aren't mesmerized with idea of having cash but rather understand how to control and handle cash which in turn gives them more freedom to think of how to use that money to make more cash. This was a really cool thought and post and I don't know if I want to type more to expand upon my thought on the issue but looking forward to reading other opinions on the matter.

I currently challenge this line of thinking.  I feel that developing any curriculum is probably very challenging - both in getting a chronology in order, and agreeing upon the subject matter.  Just because its difficult, doesn't make it unimportant, and its hard to imagine that even a lousy program wouldn't be a step in the right direction (an improvement over NO program).

I also disagree with the common argument that parents need to teach their children about money.  Most parents don't know about finance.  I'd bet that most adults in the U.S. have never taken a basic finance course.  How can they then teach that subject to their children?  I wouldn't want to teach a child about History, Math, or Science, so how can I be as qualified as a professional to teach that child about finance, arguably the most important subject for success in our economy?

Originally posted by @Anna Shaver :

@Scott Trench  I talk about our rentals to my daughter who is 13, she knows I believe people who can and do develop good credit can have more opportunities because their cost for money is less.  She knows we work hard and hope she will too so her life will be easier than ours was starting out.   I have talked to her about understanding costs for simple things like using an atm when you take out $20 and have a $2.50 atm fee vs. using your bank without fees or if it is not an option take out $200 if you can stretch it over a longer period so your cost for the funds is lower.

She knows I believe in saving for what you would like to have and don't buy it if you don't have the money or don't need it.

I think financial education is important and comes from home.  We have gone over what bills are and how it will be important for her to have a good education because money doesn't grow on trees.  Most families don't talk as openly about finances but I want her to understand without having to learn the hard way.  I think it also comes down to interest.  If she is open to a conversation and is curious it has paved the way to more interesting discussions.

I have also talked to hear about a Roth IRA once she is old enough and the benefits to the long term growth if she starts really early.

I have had her do some investing/finance simulators for kids, that she enjoyed.  She thought that they were a little basic but a good experience.  

 Anna,

I think that you are in the tiny minority when it comes to developing sound financial education in your daughter's home education.  Think about the incredible advantage that you are giving her, and compare that to the millions of children that go through the public school system who don't have parents that instill the concepts in their children that you instill in your daughter.

I think that your daughter has an immense advantage, and frankly, that this is totally unfair (definitely not a slight on you - you are doing something I think is great obviously!).  It's unfair to the other children that will have to compete with your daughter financially one day.  Every child should be set up for success in the same way - and if we can't expect parents to teach their kids in other subjects, I think that we can't expect all parents to teach their children finance either.

Originally posted by @Albert Bui :
Originally posted by @Scott Trench:

So this is a subject that I’m very interested in and I’d love to get everyone’s opinions.

What do you think about mandating Finance class for grade school children?

I’m not talking about making them take it one year of high school, or making it a part of math class - I think a lot of people (at least on BiggerPockets) would agree that there should be some improvement in our finance/business curriculum in public schools. No, I’m talking about full-blown making it a focus of the United States (and the world’s) public schooling curriculum - given as much priority as language, math, and science throughout the entire 12 year duration of public education.

My (perhaps naive) opinion is strongly in favor. Let me know if you disagree!

Here’s my argument:

When I was growing up, I was a pretty good student. I got decent grades in Math, English, and Science, though I was certainly lacking talent in the art and music departments. But there was one subject that I didn’t master. I didn’t even get the basics down. In fact, I was never even taught it. That subject was finance.

Like it or not, in our capitalist society food, shelter, transportation, wealth, and power stem largely from one thing - money. The fact that we don’t absolutely mandate the education of all things money through the duration of our children’s schooling is totally mind boggling to me.

Sometimes people say that finance is boring, that it is a study children might not enjoy, and that they might not comprehend.  To that argument, I’d repeat what I heard growing up every time I didn’t like a subject in school, but had to do my homework anyways:

Too Bad.

A lot of kids don’t like ANY courses in school. We make them go anyways. That’s because we believe that those things are part of life. We believe that they are necessary skills for them to develop. What about money matters? How can they not be at or near the top of the list in subjects that are critical to our children’s development as human beings and as effective citizens?

Let me leave you with one final thought.  Have you ever heard someone say, “Oh he’s really good at that - he’s been doing basketball/violin/piano/coding/insertcoolskillhere since he was six”?

Yeah - he’s good because he’s been doing it since he was six.

Let’s make the world’s kids great in what really matters for them. And let’s get them started early.  Let me know your thoughts.  AND if you think some sort of change could be realistically implemented.

HI Scott,

I was a computer science major turned finance as I found my calling but still an engineer at heart.

The problem is in school they only teach the fundamentals of finance and theory (time value of money, real rate of return, cap rates, arbitrage, velocity of return, options, stocks, derivatives, and etc). This stuff is great but I think what was missing was how to link these concepts in a way that would be applicable to different stages of a persons life. I often thought of this as well and how I would impart this information in a meaningful way to others who were younger allowing them to get a head start in life. 

The problem is the curriculum never taught what money is, the history, practical application, and how the flow of money (currency) & regulation of the financial system can be used to manipulate the value of assets causing more violent boom/bust cycles than if it was left to a more lassez faire type market.

 I certainly agree that we need to teach fundamentals AND practical application.  I'd think that true preparation of that nature is only doable over the course of years.  It needs to be an integral, closely studied part of our education.  

Originally posted by @Alan Mackenthun :

1st reaction is that it's a great idea.  2nd thought is that the public schools would never be willing or able to deliver a useful education in finance.  I'd bet they'd do more harm than good.

 I disagree with this opinion currently.  I think that a years long study of money and finance is a good thing for everyone involved.  I've taken many courses in finance that were useful in college.  I'd imagine that those curriculums could easily be taken, stripped, and customized to a younger demographic.  

Originally posted by @Bobby Narinov :

I have lost any hope in today's US school system: 30+ kids in a class,  teacher's unions, "no child left behind", "Common Core, a.k.a. rotten to the core" and $250k student loans - pick your poison.

Today's parents are too lazy to spend time with their kids so they try to offload their parenting responsibilities to the schools. If you want to teach your kids the things that are important to them - you have to do it yourself. Please spend 30-60 minutes a day reading and discussing economics with them. There are plenty of good books out there that with your help can be very beneficial to your kids.

I have started my kids at age 8 with books like "How the economy grows and why it crashes", The Uncle Eric series (Whatever happened to penny candy, the money mysteries, etc.) and now at age 9 we are reading Rich dad poor Dad. They enjoy our reading and discussion time and get disappointed when we have no time due to school activities.

Don't cop out, do it yourself. 

Bobby - I certainly admire your dedication to your children's education.  THIS is what I believe is the fundamental problem in our society.  Want to know why I believe that income inequality is getting more and more unequal?  It's because some children are exposed to money early, regularly, and intelligently (like yours) and some aren't (probably 99% of the rest of the country).

Want to know why your kids will be in the 1% one day (or have a better chance than almost everyone else)?  Because they'll have been doing finance and economics since they were 8.  It's the same thing with great musicians or athletes.  It's nurture, not nature.

And it seems to me that we can't expect parents to have the same dedication in this field of study that you do.  Most parents probably aren't doing that, and frankly, its unfair to their children.  They probably won't start their lives with the knowledge and toolkit that yours will.  It's an incredible head start.

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