Our Schools Should Not Teach Personal Finance To Our Children

by Hank Coleman

Yes, you read that title correctly.  Our teachers and schools should not teach personal finance to our children.  Almost all of our teachers, public and private alike, are not qualified.  I even have an issue with many high school teachers teaching economics to our children. 

blackboard-classroomTeachers Are Not Qualified.  The problem with teaching personal finance, say in high school, is that most teachers at that level are not qualified to teach the subject to our students.  Many of them have not learned the topics themselves.  Most high school teachers have bachelor’s degrees in their area of expertise such as math, history, science, etc.  Hardly any of them have a degree in economics or business administration.  That’s not how you qualify in America to become a high school teacher.  You have to have a degree in the subject you teach.  The problem is that there is only one or two classes of economics that are taught in most high schools, not enough to warrant hiring a business major to teach those classes.  Not to take anything away from our nation’s great teachers, my mother and wife both are teachers.  But, in GA for example, they make history and social studies teachers teach a econ/finance class one out of the four nine weeks with practically no finance or economic background.  My wife was petrified during her student teaching that she would have to teach classes on those topics because she had never even taken an econ class in college.  We are potentially teaching our children incorrect information. 

Financial Problems.  One of my best friends asked me about getting his first tattoo, and I told him that he should pick a tattoo artist based on his talent, of course, and by how many tattoos he or she has on their body.  I walked into a tattoo parlor once and the artist only had one or two tattoos on his arm.  I immediately walked out of that store.  I want my tattoo artist to be passionate about his craft.  I want him or her to have full sleeves of tattoos running up and down his arms.  I want my tattoo artist to have tattoos on his neck.  That is one way to increase your odds on having an excellent tattoo and experience getting one.  Why would we let teachers who earn peanuts in income, have a lot of personal and credit card debt, and have very little investments teach our children about personal finance.  We need someone with a CFP designation teaching our children.  We need someone who has followed the principles that they are teaching with their own finances.  Most teachers thankfully still fall under a defined contribution pension plan, and their need for outside retirement investments is smaller than most workers in America.

It is a great idea to require personal finance in school if teachers are trained, knowledgeable, and passionate about the subject.  But, sadly that is not the case.  And, it is not the fault of the teachers.  The American educational system is to blame.  If teachers are thrown into the role of personal finance coach to our children, we are going to end up with ever increasing corp of mis-educated and still uninformed consumers graduating.  Teaching personal finance in our secondary schools may be one of the answer to our nation’s debt and personal money problems but not the way we are tackling it now.

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{ 26 comments… read them below or add one }

Katie Sanchez September 28, 2009 at 7:59 am

So you’d rather leave it up to the parents who are up to their necks in debt to tell their kids about personal finance?

I think teaching them the basic funamentals about saving, what the recession was all about is all there needs to be.

Economics… they are learning the basics… demand and supply, opportunity cost etc which can be belted out word for word out of the text books that the kids never read fully anyway.

Being a certified economist and being a teacher wouldnt mix… they’d earn more as an economist.

I understand why you may want this but it wont happen :)

becky grant September 28, 2009 at 8:09 am

Financial education is so important yet it’s not even taught in school. It is such a shame that this happens because so many people would be better off it they had the proper direction.
I wish I had a mentor lol

-Becky

Eric J. Nisall September 28, 2009 at 9:11 am

I don’t think that it is necessary to be passionate, or even have a degree in economics to teach children about basic financial principles. What credit is and how it works in the sense that it is just a short-term loan, how checking & savings accounts work, simple budgeting practices, balancing a checkbook are all relatively easy concepts to relay. As far as having a CFP, or other experienced professional come in and do that, it’s going a little overboard. These people get paid (quite handsomely in many cases) to do what their title implies–planning. They generally work with higher-net worth clients on estate planning, tax planning, insurance planning, etc. Plus what school system (other than an individual private school) could afford to go that route? It’s doubtful that people would allow for their taxes to go up to afford this when other programs such as after-care programs, sports, and teacher salary budgets are being slashed, and some systems cannot even afford current or decent books/supplies.

I am not denying that financial literacy and education are sorely lacking in this country, but there are other ways to solve the problem. Personally, I believe everything starts at home. Perhaps it would be of greater value to educate the parents , so that they would be able to be the primary educators (since it is their responsibility) and to reinforce what is taught in the schools. Maybe it is just a matter of coming up an easy to follow curriculum to enable the teachers to pass on this information with more knowledge and authority. However it gets done, I agree totally that financial education is something that needs to be addressed in one form or another

Donnie September 28, 2009 at 12:02 pm

I suppose the same argument could be made about sex-education. Yes, our teachers “shouldn’t” be teaching it, but it is probably necessary, because they are still better equipped to teach it than most parents.

MLR September 28, 2009 at 12:08 pm

Why would we let teachers who earn peanuts in income, have a lot of personal and credit card debt, and have very little investments teach our children about personal finance.

^^ Do you have any basis behind that statement? Is there statistically significant data that says teachers have more personal and credit card debt versus both the average population and the CFP population? The same goes for investments. In reference to “earning peanuts” — it depends where you work. I know people who make $50-53,000 right out of college teaching middle school. Peanuts, I think not. And even so, a lot of lower income earners are BETTER at personal finance because they really understand the concept of making ends meet.

MoneyEnergy September 28, 2009 at 8:50 pm

I agree with the general thrust of the argument, and whereever the premises are true, then I think you have a point (for example, it’s not going to be true that all teachers will have an equally poor economic or finance background; and conversely, “personal finance” is something everyone has to deal with whether or not they’ve had a formal education in it – so if someone has no debt and a good size portfolio of investments, by this logic they should be qualified to teach it – whether or not they took those classes somewhere).

Another thing to be careful about is one of the last points – “We need someone with a CFP designation teaching our children.”

Again, not everyone with a CFP is going to be good at their own finances. Just take a look at our doctors and nurses. Are they all healthy non-smokers? Nope.

Hank September 29, 2009 at 6:55 am

@Katie – You said, “Economics… demand and supply, opportunity cost, etc which can be belted out word for word out of the text books.” This kind of education is exactly what we do not need from our teachers. What kind of engaging education will our children receive this way? We should not force teachers who are uncomfortable with the material into teaching our middle and high school children which is what Georgia does.

@Donnie – Good point about sex education.

@MLR – I’m basing my statement on personal experience. While it may be a small population sample, not many teachers I know handle their money well and most do not have enough retirement investments. I think that that would make for excellent scholarly research if it has not been done already. Based on my experience, I think that we will see a statistically significant correlation between debt, lack of investments, and the teaching profession. Peanuts for income is relative to cost of living in the area in which you live in. $50,000 a year may go a long way in NC, but teachers there only start in the low $30,000 range and the cost of living there is much lower than somewhere like New York or California.

@MoneyEnergy – You said, “Not everyone with a CFP is going to be good at their own finances. Just take a look at our doctors and nurses. Are they all healthy non-smokers?” That is very true, and that is also why I made the statement about tattoo artists. I probably would not use a doctor who smoked. And, likewise, I would not use a CFP who is not good at his or her own finances. That is one of the questions that we should be asking our financial advisors, and those are questions that high school principals should ask our teachers before we allow them to teach personal finance to our children.

Matt Jabs September 29, 2009 at 9:18 am

We don’t need statistics to know there is a problem. Focusing on such trivialities draws our attention away from the problem… and therefore the solution.

As Hank pointed out, the current problems surrounding public schools and their ability to teach personal finance is not the fault of the teacher. A majority of the time they simply lack proper training themselves – both personally and professionally. These are obvious truths of the society we live in.

It is also obvious, albeit forgotten in modern American society, that parents are responsible for training their own children. It is not the responsibility nor fault of the public school system – although I decry the majority of their policies and practices – it is the fault of parents.

Most parents are in debt themselves, therefore requiring both spouses to work leaving little time to properly train their child. Further… most parents are in the same boat their children are in – they lack proper training due to the same poor public education and lack of proper parental training. We must overcome. Now is the time, this is the generation.

The time for complaining and blame is over – now is the time to suck it up and act. Start with the man in the mirror – then be an example and an encouragement to others.

David September 29, 2009 at 10:19 am

You are right; let’s let kids graduate high school without knowing how to handle money at all – not even how to save $10. Then they can leave high school to go to college where they get into loads of credit card debt like 60%+ of them do.

Ignoring the fact that parents don’t or can’t do a great job of teaching life skills to their own children doesn’t make it go away – it just creates more ignorant adults that muddled their way through college and straight into a life of debt. Too often parents don’t teach their kids much of anything, thinking “they will learn that in school” – but then people don’t want to pay taxes to have the necessary classes in school for their kids to learn enough to succeed in the world.

Even teaching a kid “how to save” would do more than most parents do on their own. If personal finance class was implemented in the school, then teachers would be qualified – way more than most parents are or could be.

Peter September 29, 2009 at 11:57 am

I have to disagree to a certain degree. I don’t think that just because we don’t have teachers qualified to teach this currently – doesn’t mean we can’t have teachers become certified to teach the BASICS of personal finance. There are several states that already have some sort of mandatory personal finance curriculum (oklahoma and texas among them), but I think more states need to make it available. Our country has a huge problem with debt and credit – and we NEED something. Does this mean that parents and family don’t have any responsibility? No. But I do think learning about personal finance is one of those basics that we need kids to learn from an early age -because if it isn’t taught – they’ll just begin a harmful cycle of debt and credit.

Jen @ After the Alter September 29, 2009 at 12:08 pm

I’m going to have to disagree. I think that at the high school level teachers should be able to teach the basics. Kids should learn how credit cards work and how to save and about interest and stuff…I mean college kids who have no knowlege are the ones that get hit the hardest with debt because they weren’t properly taught!

Dad September 29, 2009 at 12:53 pm

Honestly, I’m not sure it would help that much anyway… Personal Finance is a lot about emotions and I would say habits. If your parents didn’t use credit cards there is a good chance you wont. I don’t think a kid, with parents deep in debt and still using credit, will learn good personal finance habits from the school. I think we have a better chance if we talk to our neighbors and friends. And, without a doubt, start with the man in the mirror!!!

Jason @ MyMoneyMinute September 29, 2009 at 2:46 pm

Well, count me on the side of disagreement, but a fantastic post nevertheless because it creates great discourse.

I think done right, PF education will be demanded in some way from the local level through individual school districts. There are education platforms out there they could use that wouldn’t require much expertise on the teacher’s part.

Simple things should be taught about money management in our schools though — time-value of money (interest), the risks & burdens of consumer debt, budgeting, etc.

MoneyEnergy September 29, 2009 at 3:03 pm

Good points all around here, I don’t think it’s an issue that can really benefit from a simple agree/disagree analysis anyway. There are too many “if…. then….” clauses in the problem.

For example, who wouldn’t pull in an acquaintance with no teaching certifications whatsoever, but who had yet mastered their own finances and became a millionaire through savings to teach their class? If that person was, say, a garbage collector, but a healthy millionaire, of course you want that person teaching $ – and they may be horrible teachers, nonetheless.

I think that we learn many things through many channels, and the more the better. You’ll always get a different angle each time, but that’s good because it enables you to see a bigger picture.

Jason September 29, 2009 at 3:45 pm

I agree with you for the most part about teachers being unqualified or unmotivated to teach finance properly. My school has, in fact, hired business administration degree teachers who have also gained their certifications. The problems is in finding someone who knows what they are talking about and can still handle students. The two criteria do not come together often. As far as teachers being broke, I think the numbers are likely off. Most teachers are very young on average and many young adults are poor with money in general. Older teachers are usually on target finacially. Asking someone why is broke to teach finance is like asking a fat person what you should be eating. It’s useless. We have to get better trained individuals teaching our students and we need parents to step up, open up their finances to their kids, and grow up to show their kids how a competent person handles money.

FinanciallySmartServices September 29, 2009 at 3:53 pm

Well I am not in total agreement with you. If the schools going to have this on the syllabus then they will need an expert to teach this subject. The every day teachers will not be qualified because he/she doesn’t have this in his/her expertise. Personal Finance has to be done in such a way that the child will understand and be able to apply it in his/her life.
Where I am in agreement with you with is that if it is the everyday teacher who has no expertise of Personal Finance then schools should not place it on the syllabus.

Eric J. Nisall September 29, 2009 at 6:53 pm

What I keep seeing here is that “regular” teachers should not teach a personal finance course, and that someone who is certified in some discipline should be the one to do it because of the education and experience. But what most people are forgetting is that just because they may not have the expertise or enthusiasm for the subject, they are still teachers and are experts in planning and getting through to the students. Most CPAs and CFPs are not very entertaining (anyone that has watched a Continuing Education DVD or attended seminars will likely agree) and more importantly are not used to talking to kids, so they may not make the best instructors either because they may not necessarily be able to speak in a way that is engaging to children–even teens. Understanding the subject matter is only a piece of the puzzle: understanding the audience and being able to tailor yourself to their needs and capabilities is the other piece when it comes to teaching or public speaking.

MoneyEnergy said it best in that it is not a simple debate. There are a lot of variables, and something that needs to be look at over an extended amount of time and monitored very closely should it be implemented.

B Railsback October 22, 2009 at 10:59 pm

Obviously, you are not at all familiar with most high schools. Most high schools do have qualified business people on staff–they are called high school business teachers. They have degrees in business and education. And, I know that Georgia has them in their schools. They have taken courses in personal finance, financial management, economics, and accounting as well as other related business courses.

Considering that most of our high school administrators are old PE and social studies teachers who have no clue about anything, is it any wonder that they would want their “good old boys” to teach those classes. By the way, math educators don’t typically take courses in business/personal finance either and according to surveys I have conducted don’t feel comfortable teaching math, but most state legislators (who have no clue about collegiate curriculums of study) think that both social studies and math teachers are qualified.

B Railsback October 22, 2009 at 11:11 pm

A couple of other comments:

First, teachers are broke because they buy things for their classrooms that schools won’t purchase and for their students because their parents won’t come through. It is sad and disgusting to think of the number of times when I was teaching to see the dirty (can’t they put clothes in a laundromat washer) clothes kids were wearing as well as the number of times they didn’t have toothbrushes or other basic hygiene items at home. You would be surprised at how many teachers (especially high school teachers) will put basic hygiene products in shower rooms for students to use, pay for meals on field trips because the parents couldn’t/wouldn’t (wouldn’t want to give up the 6-pack of beer money to do something for their kid) send $5 for a stop at McDonalds or some other eating establishment or at least send a sack lunch. High school teachers are also known to buy athletic shoes for kids, pay for dues for kids so they can join an organization (research shows participation in extra-curricular activities is good). And, they are typically paid less for working their 2,000 hours per year than anyone else. It amazes me to hear people complaining about those teachers getting all that time off in the summer and over breaks. Teachers are paid for the days they work and most teachers log well over 2,000 hours per year. Figure that out, please. If you work 40hours a week for 50 weeks a year (we won’t count your PAID vacation), you are working 2,000 hours per year. Teachers just work those 2,000 hours in fewer days than most people. We pay nurses for 40 hours of work when they work 3 12-hour days–maybe we should pay teachers by the hour (especially for grading, attending conferences, etc.). If everyone in every profession donated the amount of money to their employers that teachers donate to school districts, the big banks would have enough to send their top executives on lots of “retreats.”

There are trained teachers in the schools to teach a lot of basic fundamental skills that so many parents can’t seem to do because they are the “me” generation and if it doesn’t tickle their fancy, they wouldn’t begin to do something that wasn’t for them. Hower, our great powers that be think that EVERYONE has to go to a 4-year college and that academics are the only subjects to teach in high school. From a personal finance viewpoint (and by the way, to teach it, a teacher must not only teach the facts, they have to modify screwed up behavior the kids have learned AT HOME), it would be better to teach kids how to change the oil in their cars, do basic plumbing, and basic repairs around the home, cook from scratch, grow their own gardens and can the food. But that would mean that we would have to go back to teaching industrial arts, home ec, vo ag in the high schools and that would just be terrible for NCLB.

Finance February 8, 2010 at 5:09 am

I think done right, PF education will be demanded in some way from the local level through individual school districts. There are education platforms out there they could use that wouldn’t require much expertise on the teacher’s part.

Clare March 17, 2010 at 3:04 pm

Personal finance is not just all about investing. Giving the reason that teachers lack knowledge of investing is not a good reason to not teach personal finance in schools.
1. Most College kids that get in trouble with money are not having trouble with investing, they are most of the time having trouble with their debt.
2. Parents that are supposed to be teaching personal finance to their kids often know nothing of investing themselves. Even the ones that do tell their kids about money and saving and all that good stuff.

Hank March 18, 2010 at 11:03 am

@ Clare – You are absolutely right. Personal finance is not just investing. I also
referred to economics as well in the article. Teachers like those in GA are not
qualified in that regard either. In GA, it falls on history teachers who do not
have the prerequisites for that either.

Hank May 18, 2010 at 7:18 am

Researchers at the University of Wisconsin at Madison surveyed K-12 educators, and most instructors don’t think they are suitably trained to teach their students the basics of personal finance. The study, “Teachers’ Background & Capacity to Teach Personal Finance,” was funded by the National Endowment for Financial Education (NEFE). In the study group, 0nly 37% of K-12 teachers had taken a college course offering personal finance content. Only 11.6% of K-12 teachers had taken a workshop on teaching personal finance.

http://www.nefe.org/NEFENews/PressRoom/PressRelease/UWMADISONRELEASESSTUDYONTEACHERSCAPABILITY/tabid/835/Default.aspx

http://www.washingtonpost.com/wp-dyn/content/article/2010/05/07/AR2010050705270.html

Sharon O'Day December 27, 2010 at 11:49 am

Maybe local school boards should enlist businesspeople in the community to come give a simple (pre-established) curriculum in the schools, say once a month, tailored to grade level. (What better way to invest time than in their future client/employee pool?) That would guarantee that the basic message was correct, and the orientation would be that of a success-driven person. Coming from a business person, instead of a teacher, would add to the message by possibly motivating some of the kids to follow in their footsteps. Just a thought …

Hank Coleman December 27, 2010 at 2:52 pm

Sharon,

That is a very good idea. I like that idea a lot. It is a win/win situation for business leaders and school teachers.

Steve Gail February 22, 2013 at 3:38 pm

its’ amazing that some one would not want teachers to teach PERSONAL finance to kids, because one claims they are not qualified. Amazing, the schools will not even utilize the course with teachers who had 30 years in the investment community before teaching. Because in California, the powers that BE think kids don’t need it. Better teach teach it , than stress out parents who are in debt….

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