For Youth, Learning about Personal Finance has Immediate Applicability to Life Decisions

Recently the National Financial Educators Council asked financial experts to answer the following questions: “Do you feel teaching personal finance to students will benefit them? When compared to core subjects taught in school – mathematics (algebra, geometry), science (biology, chemistry) and social studies (history, government) – do you think the knowledge they gain in comprehensive money management courses will provide greater benefits to students after they graduate?” This article summarizes some of their responses.

Jun Wei of Singapore Management University has noticed that many of her peers have received no proper education or guidance, and thus have no idea what to do with their finances. “Many of them…fall prey to multi-level marketing schemes or other errant schemes due to inadequate knowledge,” Wei says. After teaching many students across several years about money management, explains Wei, “Many students come back to me and tell me that they are extremely thankful as I teach them actionable steps to get started. As compared to core subjects – though mathematics and science as well as social studies build the foundation to a successful career – most individuals have no semblance of idea how to properly make their money work for them.” Offering kids personal finance courses is important, Wei adds, because “money management is not just a skill to apply after graduation, but something…one can apply right now at any point in their life…money management isn’t just an important skill but in fact a life skill, similar to effective communication and managing relationships.”

Teaching financial literacy in schools is extremely important, according to Edwin Ivanauskas with Citadel Insurance. “The biggest hurdle we face coming out of school is that on top of having no formal teaching

[in personal finance], we tend to pick up the habits of our parents. For the majority of people, those are bad habits. So when there’s no education on money management and finance in high school, that just makes it harder to break those learned habits.” Tammy Johnston of The Financial Guides adds, “Money is a fact of life. It permeates absolutely every aspect of our lives and we are taught next to nothing about the subject.” Yet people tend to avoid the subject, Johnston comments. “In fact in my 23 years of experience I have found it to be a more taboo subject than sex. Knowing how the financial world works and especially knowing how to ask the right questions serves kids for all of their lives starting immediately – not just once they graduate high school, college, or university…The biggest part of my job actually is marriage counseling because of all the ways that money and the taboo nature of the subject ripples out into every aspect of life.”

Arete Wealth Strategists’ representative Matt Goren contributes to the conversation, “Money management is a basic skill people need to survive a modern capitalist society. Courses that don’t prepare people for the real world and courses than focus on theory instead of skills won’t provide as much benefit.” Goren asks, “When…is the last time you thought about the quadratic equation, molar units, or the Liberal Revolution of 1848? The liberal arts argument is that this broad knowledge is vital for a functioning democratic society. But so many of our students graduate without basic abilities like opening a savings account or making a résumé. No one can be truly active in the political process or build a better culture if they’re unable to pay their rent. Foundational money management skills and knowledge are, in my view, even more critical to modern democracy than a robust liberal arts education.”

Ben Malick of Three Nine Financial expresses shock that personal finance courses are not a requirement in high school. “Look no further than the mountains of young professionals drowning in student loan debt,” says Malick, “To see how much the subject of money management is needed in schools today.” He adds, “Money management is something that EVERYONE must learn at some point, therefore it is just as, if not more valuable than many other core subjects taught in schools. But since most high schoolers are still dependents of mom and dad, we must find a way to make it engaging AND relevant for the students.” This omission is “super important,” adds Martin Luenendonk of Cleverism. As a former banker and small business owner, “I have seen many young people who are not able to make wise financial decisions balancing their income and expense,” says Luenendonk. “I believe a course on the fundamentals in money management including what factors are driving your income and what you can do about it, what are your expenses and how are you financing them, and how money creation and wealth distribution occur, can be beneficial in not being over-[in]debted at some point in life.”

Financial education for kids is crucial among populations of all backgrounds. While young people, especially those living in poverty, probably will never use algebra, geometry, biology, or chemistry after leaving high school, “They will always use some form of financial literacy,” says Ella Butcher of Butcher Investors LLC. “Money management is a key component to their future along with teaching them the importance of credit. [The] majority of the children in the urban community I mentor and teach barely can add or subtract nor can they use percentages. That’s basic!”

Clearly learning personal finance skills has immediate applicability to the lives of young people, and the overwhelming consensus among financial leaders is that such education would have great value to our country’s future.



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