Should We Make Our Kids Take Finance/Business Classes?

Should We Make Our Kids Take Finance/Business Classes?

Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

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.

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Real Estate Consultant · Federal Way, WA · Member since 2012 · 74 posts · 13 votes
12y

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.

See this reply in the discussion

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  • Real Estate Investor · Buffalo, NY · Member since 2013 · 23 posts · 8 votes
    12y

    Every summer i spend a couple of evenings teaching my kids the basics of personal finance, simple stuff like living below you means, saving 10% of everything you make, the magic of compounding interest, investing etc...... These are some of the most important life lessons and they do not get taught in school. That is why we have tenants for our rental properties. If they taught it in school everyone would own our home and not rent.

  • Scott TrenchPro Member
    OP
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    12y
    Originally posted by @Bill Gulley:

    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. :)    

     Bill - wow this is a great post.  Thank you for your perspective.  I think you make an extremely intelligent argument about the age at which finance courses should be introduced.  I certainly don't have the background on elementary education to determine when children's brains are prepared for certain kinds of thinking!

    Yes - it is truly amazing that if I had not minored in finance in college, I would have gone through 13 years in the public school system and 4 more of undergraduate study, and have taken ZERO finance courses.  I would have been EASY prey.  A doctor goes through at least 21 years of schooling.  No finance.  Is that a joke?

  • Scott TrenchPro Member
    OP
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    12y
    Originally posted by @Adam Moehn:

    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.

     Thanks Adam.  This really sums up my way of thinking.  Couldn't agree more. 

    One thing I want to discuss is the concept of the difficulty of agreeing on a curriculum.  I think we have this problem in every subject, and that many of them are far more problematic than finance.  Look at history!  Look at how much controversy surrounds just the study of European settlement of the U.S. and their conflict with Native Americans! 

    I think that finance is WAY less subjective a field of study than History, English, or any other Liberal Arts course.  I don't buy the argument that its not feasible.

  • Flipper/Rehabber · York, UK · Member since 2013 · 895 posts · 453 votes
    12y

    I'm not going to be redundant, I think the obvious benefits and challenges have been well stated... I'm just trying to imagine an America where a majority of people live within their means, use credit responsibly, and have been planning for their financial future since Jr. High. What would the impact be? I'm sure there's an intriguing novel/film to be created on that concept.

  • Rental Property Investor · San Jose, CA · Member since 2013 · 486 posts · 170 votes
    12y

    @Scott Trench 

    It would be great to have personal finance classes in school, but I think the best way for kids to learn is through their own experience. 

    My family was poor and I never had money to buy video games. My mother told me If I created my own ventures, she would allow me to use that money on video games. That created the drive for me to start numerous kid ventures, which were all fun for me, and fun for her because I wasn't bugging her anymore. Long story short, that taught me the value of a dollar and it propelled me to learn finance.

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    For those who are on Bigger Pockets who have a good grasp of personal finance, have you considered volunteering to teach a short class through your city's Parks and Recs Department? They usually have social programs.

  • Real Estate Agent · Prairie Village, KS · Member since 2014 · 37 posts · 10 votes
    12y

    I really think personal finance should be a part of all students' education. I always got really good grades all the way through college with a business degree. I never once learned anything about how to manage my money. When I graduated, I had nothing to show for it besides a piece of paper and a pile of debt. It took me several years to get back on track and that was after I educated my self by reading books like The Millionaire Next Door, Rich Dad Poor Dad and The Total Money Makeover. I especially think college athletes would greatly benefit from financial education. It's sad to see so many young athletes blow through millions of dollars when they make it to the big leagues. If one class was absolutely mandatory for a college freshman, it should be personal finance. 

  • Scott TrenchPro Member
    OP
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    12y
    Originally posted by @Jordan Thibodeau:

    @Scott Trench 

    It would be great to have personal finance classes in school, but I think the best way for kids to learn is through their own experience. 

    My family was poor and I never had money to buy video games. My mother told me If I created my own ventures, she would allow me to use that money on video games. That created the drive for me to start numerous kid ventures, which were all fun for me, and fun for her because I wasn't bugging her anymore. Long story short, that taught me the value of a dollar and it propelled me to learn finance.

     Jordan - that's a great story, I think that a ton of kids would benefit from those types of projects.  I think the problem is that many of them wouldn't have parents creative enough to help their child earn money like that.

  • Scott TrenchPro Member
    OP
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    12y
    Originally posted by @Dawn Anastasi:

    For those who are on Bigger Pockets who have a good grasp of personal finance, have you considered volunteering to teach a short class through your city's Parks and Recs Department? They usually have social programs.

     Dawn - this is a great idea.  I'm going to look into it immediately. Thanks!

  • Investor · Columbia, SC · Member since 2012 · 47 posts · 15 votes
    12y

    Living below your means and saving is the first step in personal finance.

    American economy is based on consumer spending. 

    The government is not interested in people living below their means. Quite a lot of adults arent interested either, they have to "catch up with Joneses".

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    12y

    Life lessons teach our children.  When my 2 boys and I go to one of our apt buildings to mow lawns, they see the nice cars in the parking lot with tenants playing on their i-phones while drinking fancy coffee. "Dad, why do we drive a beater and have an old slider phone while you and Mom make coffee at home? Can't we have 200+ TV channels on a huge flat screen so we know who was voted off the island? Can't I have a big screen in my room with an Xbox and 89 games on  my $600 phone like my friends who live here?"   After I proceeded to collect $4800 in rents and pay them $30 cash for mowing and had free time the whole week following to be with them, no answer was necessary. What was the lesson? Work equals money. Don't buy things that go down in value.   Payments equal working all the time!  To this day they don't tell me about all the cool stuff little Jimmy has anymore.     

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    Some people think that people in jail have too good of life because they sit around all day, get free housing, and free food, paid for by the taxpayers.  Also people think the same about the welfare recipients.  They can sit around and get their hair done, and have a flat screen TV, etc.

    The people in jail have no freedom.  They can't go and see a movie whenever they want.  They don't have the privacy like you and I do. Someone monitors what they do, decides what they wear, and what they eat.  Do you really envy someone with no freedom and privacy?

    Likewise, the people who take the government handouts who do not want to work, they have no financial freedom.  The amount of money they get every month is decided for them.  They don't have the freedom to take a trip to Europe, or to enjoy retirement around the country in an RV, or various other things that would have been available to them had they decided to work and save.

    I don't have a huge flat screen TV and I'm not jealous of those who do.  I have a 25 year old TV and I hardly use it.  I have the means to travel around the country or to go to Europe if I want.  If I want to go to CA or FL to escape the winter, I can do it.  So no, I'll never be jealous of the people who have locked themselves down in a financial prison.

  • Bethesda, MD · Member since 2012 · 22 posts · 4 votes
    12y

    I think @Lynn M. makes a really valid point there - it's inherently difficult to add new material to the curriculum of any local school system. It can easily become politicized or ideological pretty fast.

    That being said, I'd agree there is room for financial literacy education in our high schools. It's far, far less contentious of a topic than health education and less likely to stoke any kind of outrage. Along with a stronger focus on civics/informed citizenship, I personally think it's long overdue.

    I know that some of the schools where I grew up are now having smaller, once or bi-weekly courses on civics or "health" (which covers a broad range of topics). The lucky thing about basic financial literacy is that you can be pretty objective about it. There's nothing openly political about loan management, credit sense, or debt minimization.

    I'd say that in the best of all possible worlds we have this course for kids in one of their final two years of high school. A lot of the students enrolled in a class at that age will likely be looking to take out college loans or open a credit card in the near future. There's a chance a lot of them would be receptive to at least hearing some advice on how to handle these in the best way possible.

    I think long-term finance and business class would be difficult to instate. It would be nice, but would face far too many hurdles in the immediate. But I do think it's long overdue that we teach some basic money sense classes. It could however be a baby steps thing - assuming we instate financial literacy courses at the higher levels, we could graduate to making it something that encompasses all four years of high school in some form.

  • Accountant · cedar rapids, IA · Member since 2013 · 99 posts · 46 votes
    12y

    schools are too busy handing out condoms, teaching kids why little timmy has two dads and the dangers of global warming to include such non sense as financial education.

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by @Tyler Smiarowski:

    schools are too busy handing out condoms, teaching kids why little timmy has two dads and the dangers of global warming to include such non sense as financial education.

     I think there are a lot of adults who could benefit from learning safe sex practices, tolerance for others, and science -- not just kids.

  • Accountant · cedar rapids, IA · Member since 2013 · 99 posts · 46 votes
    12y

    @Dawn Anastasi 

    When our school system is in a constant decline and more and more kids our not ready to enter college and our unable to read at the appropriate levels...topics like these are takign away from reading, math, etc and leaving kids not equipped to enter college or the workforce.

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    12y

    The best way to financially educate our kids in school may be online/dvd type courses from the private sector.  A lot of them are corporate-sponsored at reduced or no cost. I think Dave Ramsey has one and it's not christian-based.  No way the public education system invents a decent financial curriculum acceptable to all on their own.  Look at congress!  

  • John HornerPro Member
    Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
    12y
    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. 

     Unfortunately Bobby is right, if you want it done you will have to do it yourself.

  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    12y
    Originally posted by @Tyler Smiarowski:

    @Dawn Anastasi 

    When our school system is in a constant decline and more and more kids our not ready to enter college and our unable to read at the appropriate levels...topics like these are takign away from reading, math, etc and leaving kids not equipped to enter college or the workforce.

     Bullocks!

    Teaching children to be more compassionate, socially conscious, and accepting of differences with others does not detract from their development and is in the best longer term interest of society.  These values can, and frequently are, incorporated within the regular instruction towards literacy and matriculation.

  • Accountant · cedar rapids, IA · Member since 2013 · 99 posts · 46 votes
    12y

    If they are not taking away from the core concepts I am unsure how then the public education system is getting the results that they are. See 1st link below. My overall point is that the public education system is largely indocrinated the students. I am not sure how the youtube video below is incorporating math or reading.

    http://www.washingtontimes.com/news/2012/sep/24/high-school-grads-reading-skills-hit-new-low-most-/?page=all#!

    https://www.youtube.com/watch?v=PJFC1qFCgyA

  • Real Estate Investor · Rosenberg , TX · Member since 2014 · 1 post · 1 vote
    12y

    Great topic.  

    I believe it's imperative to teach our children at least basic accounting.  They need to understand the fundamental difference between assets and liabilities.  No, not your accountant's version.  Personal residences and vehicles are not assets, but liabilities.  They should at least be able to create a simple personal finance statement and know how to calculate metrics like return on equity, debt to equity, and identify dead equity within a balance sheet.  This may sound too advanced but it's quite simple with a little practice.   

    Another thing, is what's the purpose of school?  To get educated right?  Educated to do what?  Get a job?  And what's the purpose of getting a job?  To make money of course. Why not just just find a shortcut between the beginning and end?  We should teach our kids how to make money instead of how to work for money.  Schools may never do this, but parents sure can.

    Love this topic and could go on and on.     

  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    12y

    @Tyler Smiarowski - look beyond your boarders, there are many other public education systems which incorporate these values in unison with instruction.

    @Jeff Jenkins  - in French there is a distinction between education and instruction: the first you receive at home (home including your neighbourhood / society), the second being what you receive in school.

    In both your country and mine, the school system - post secondary included - has, more-or-less, morphed into an assembly line to turn out cogs and consumers.  So successful has this transformation become that most of our student tenants are attending university with the objective of getting a piece of paper to secure employment and not to enhance their cognition and for the sake of knowledge.

  • Burt, NY · Member since 2013 · 8 posts · 3 votes
    12y

    We should definitely be teaching finance in schools!  I graduated High school in 2006, and although we didn't have a dedicated finance class, I had a great "Social Studies" teacher who must have seen the need to give us kids a dose of financial reality.  He assigned a project that made us basically financially plan out our life in two scenarios. 1) If we didn't graduate high school and had to live off of minimum wage. and 2) If we had our dream job and made the going rate for that field.  He had us account for rent/mortgage, vehicle payments and insurance, fuel, utilities, food etc.  And it was quite the eye opener... Looking back, it was probably more of a way to scare us into going to college, but I had already planned on it so I looked at it more from the financial angle.   I think about that week-long project all the time, and the more I advance in my career, acquire assets, and just life in general, the more grateful I feel for that little reality check so early on.

  • Accountant · cedar rapids, IA · Member since 2013 · 99 posts · 46 votes
    12y

    @Roy N. 

    I certainly look beyond my boarders..

    http://www.npr.org/blogs/thetwo-way/2013/12/03/248329823/u-s-high-school-students-slide-in-math-reading-science

  • Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    12y

    @Scott Trench 

    A good topic... I would make them take "personal financial management".  Required reading for the course would include:

     "The Richest Man in Babylon"  By George Samuel Clason

    "Think and Grow Rich" (original 1937 edition) by Napoleon Hill

    "The Science of Getting Rich" by Wallace D. Wattles

    I would also require them to submit a class project, which would be a business plan and requirement to raise capital and take action to actually implement the business plan (I started a lawn moving business at 12 years old).

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