Editorial Policy

Should a Personal Finance Course be a Graduation Requirement?

Kristin McGrath

June 8, 2012

Did you have to pass a personal finance course, along with English and chemistry, to graduate high school? Chances are, you didn’t — and many experts in the education field think that needs to change.

In a recent a column for the Washington Post, Brian Page (a personal finance and macroeconomics teacher in Reading, Ohio) describes the consequences of grads’ lack of financial literacy.

For one thing, there’s the recent financial crisis, which was fed by consumers who didn’t know what to do with their money, trusting “experts” they shouldn’t have trusted. Then there are the consequences that don’t necessarily rock a nation’s financial foundations — but that can affect individuals and their families for a lifetime. Credit card debt. A lack of emergency savings. A lack of retirement savings. An inability to budget.

Navigating the financial world can be perplexing and, as Page points out, it’s a test most people never had to pass in school. They never had a teacher to correct their bad habits and don’t have enough knowledge about credit cards, debit cards, 401(k)s, IRAs, the stock market, compound interest and mutual funds to avoid common pitfalls.

While only a handful of states require high school personal finance courses, 82 percent of parents and 89 percent of educators think it should be a graduation requirement.  In the meantime, kids and parents can rely on a variety of helpful guides, including this one from the President’s Advisory Council on Financial Capability.

While my high school offered a personal accounting course, I never took it. My first formal personal finance education happened during my final semester of college, when I enrolled in an elective personal finance course. It didn’t count toward my major, and I didn’t take it for a grade. I admit that I skipped several class sessions and was a bit drowsy throughout the whole experience (the class was at 9 a.m.). Yet, I’d still call it one of the most useful classes I took in college.

The professor (who also worked as a financial adviser) was famous on campus for the lecture he gave the first class of the semester — a lecture that highlighted in frightening detail the real world consequences for ostensibly wealthy clients who had failed to save. There was the attorney who “had less sense than a squirrel because at least a squirrel knows how to hoard nuts for the winter.” And then there was the client who failed to get long-term disability insurance and exhausted his entire savings within the first year of becoming disabled.

I still struggle with the math and calculations that come with financial planning (it was a wise choice not to take that class for a grade). But thanks to the course my school offered, I had the basics of good money habits scared into me — and am now able to polish my financial future with the help of my own financial adviser.

With continuing financial education in mind, here are some of the best money blog posts of the week:

Wise Bread shares the secrets of self-motivation.

Good Financial Cents has some scary stats about retirement savings.

Girls Just Wanna Have Funds gives the lowdown on 529 Plans.

Bargaineering walks you through reading your Social Security statement.

The Dough Roller describes how to plan for your dream home’s down payment.

One Cent at a Time explains how to stick to a budget, even if you’re not good at it.