Financial Literacy In Schools

I have been a big advocate of financial literacy in high school; I feel it is important to teach sound financial concepts and principles at a young age before the bad habits are developed. Finally it seems like the Canadian Federal government and the Ontario government are catching up and recently announced that Ontario high schools will include will integrate financial literacy in the curriculum from grade 4- 12 starting September 2011 great news!

Money and Children

Why Teach Finance In High School?
Whenever I discuss this topic with parents the first question I get is why waste time teaching simple personal finance when the time can be spend on more important things like English. Shouldn’t the question be whey shouldn’t we teach personal finance early?

Universities are filled with credit card solicitors, as soon as the student hits eighteen the bank offers them student credit cards and surely enough they max it out because they do not understand credit cards or interests, they are bombarded with ads of the latest’s must haves, saving and financial responsibility is never advertised or taught, no wonder consumers are in debt to their necks.

It is important to teach students simple personal finance concepts and financial responsibility at an early age, before they are attacked by credit card companies.

Until just recently the debt to income ratio levels in Canada and the US was at record level, consumers kept loading up on debt without thinking or understanding the consequences. Although teaching finance will not eliminate financially irresponsibility it will at least reduce it. If at a young age you are encouraged to have a savings account rather than a credit card would that be so bad?

Retirement Not Important – Keep it Relevant
Often people think of retirement when they think of financial planning, however retirement is not of any importance to a seventeen year old. When educating young adults about finances things should be kept simple and of interest to them, discuss saving and building wealth, educate them about how interest works for and against them, how credit cards work and the tremendous long lasting negative effect it can have on their future. Whenever I discuss these topics with young adults I almost always am able to get them involved and interested, the best topic is discussing the magic of compounding. How compounding works and how to calculate it this always fascinates them and sure enough I see them calculating how much money they’ll have when they are twenty years old.

Although the government does not know exactly how this integration will work and many question if this is the best method, I am happy to see that the government is moving in the right direction.

What are your thoughts on this topic? What do you think of the Government implementing this program?

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Comments

  1. says

    I agree 100% The fact that the US has a negative savings rate is enough of a reason to have financial literacy education in schools. There was also a recent report by HSBC that said that nearly half of all Americans have never had any financial education. Clearly something needs to be done to address this.

    ~Z Money

  2. says

    I applaud the Ontario government and hope to see this catch on elsewhere soon. Ironically, Nova Scotia had a mandatory personal finance unit in the high school curriculum until last year. Not anymore. There is work being done to integrate it into the curriculum of other courses (math, social studies, business, etc.) and I’m crossing my fingers that it will happen.

  3. says

    This is great and wish there was more basic financial education when I was in HS and in college. Learning the real life finances that you will need in every day life oppose to the stuff that was useless.

  4. Ethan says

    I think it’s a steep uphill battle. High school students don’t learn this well – they are more likely to learn it *earlier* or else later as a result of their own experience. I also have little faith in most schools to teach this well at all. It’s not about learning facts and spitting them back out on a test, it’s about teaching *skills* and attitudes. Our public schools aren’t even good at recognizing that need, let alone filling it.

  5. says

    By the time students reach high school, their spending habits are set. My child participates in an elementary school program where he makes deposits into his savings account before school. He practices saving every week and sets savings goals. Financial literacy should start in elementary school. That way, by the time they get to high school, they’ll be experts at the basics and can focus on learning more advanced skills like applying for a credit card or student loan.

  6. says

    I think that’s great news too!

    We really have to get them while they’re young… to engrain the beliefs in being smart about their finances.

    Should be interesting to see how the program plays out.

  7. says

    I am in total Agreement with you. Young persons should know about Personal finance and the rules of money management. Once they are educate with this then they will not make the mistakes persons in our generation did. Every Education Ministry worldwide should place this in the curriculum.

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