Why Is Personal Finance Not Taught in High Schools

phocus on 14/03/2018 - 09:56

As I get older and talking to coworkers, friends and family about finances. It appears that there is a significant population that don't understand basic finances, like budgeting, investment, loans, super, etc.

This seems like a pretty basic life skill that all people will need to encounter in life in order to live in this day and age. Why is this not a subject in mandatory in most high schools?

It pains me to see people living above their means. Sure its intuitive not to do that, but some people don't understand even basic budgeting to make ends meet.

Financial

Comments

  • [Deactivated] on 15/03/2018 - 06:36
    +1

    Um they do. It’s part of the NSW maths syllabus.

  • DiscoJango on 15/03/2018 - 09:53
    +1

    My high school teacher taught me how to take a dump like a boss. Without this knowledge transfer, i would probably just walk and dump

  • lddv04 on 15/03/2018 - 09:57

    In the same way that we all can't be plumbers or electricians, we all can't be financial gurus. Personally, I couldn't give a rats what the Dow is doing or how much BHP shares are today. It doesn't interest me. If I need advice, I go to a professional, as you would call in a plumber or electrician.

    • outlander on 15/03/2018 - 10:56

      Not equivalent in the slightest. Closest thing would probably be law, which doesn't really get taught a lot either

  • HADOUKEN on 15/03/2018 - 11:14

    I don't know where OP and their coworkers, friends and family went to school. I was taught from year 7 in SOSE how to budget. I can even remember being taught how to properly write a cheque. Not that I have ever had to write one in my 32 years on this earth, but still, I learned it.

  • HeartFeltAxe on 15/03/2018 - 12:58
    -1

    All these people are claiming to be teachers, saying that Personal Finance is taught in schools and I say rubbish. I'm in year 11 at the moment, in maths methods, and I'm learning about how to find the bloody y-intercept of a Parabola, not how to invest and save.
    Sure, in year 10 we learned basic and compound interest but that is about it.

    • [Deactivated] on 15/03/2018 - 22:12

      Y intercepts of a parabola isn't really as complex and/or useless as you make it out to be. You're going to need to know that stuff to calculate break even for a multitude of scenarios. It is one of the many skills you actually need to make a financially informed decision.

  • biozet on 15/03/2018 - 13:03

    of course most adults think they teach themselves to read as well

  • [Deactivated] on 15/03/2018 - 13:30
    +1

    The bare minimum requirement for getting your South Australian Certificate of Education (SACE) requires you complete at least essential mathmetics, an example of the work required is available publicly here.

    This includes budgeting, saving and investing, credit cards (calculating interest costs/fees/etc), reading and understanding pay slips/bills, taxation, etc.

    Note the aim is usually to have students complete a higher mathematics unit when possible, this is more a bare minimum requirement. Typically it's done by students who are undertaking a trade course and still require a mathmetics unit to receive there SACE.

  • VBO on 15/03/2018 - 13:36

    Isn't this parents' responsibility?

    • idonotknowwhy on 15/03/2018 - 14:01
      +2

      Not really. Parents have varying levels of education, and many make poor financial decisions.

      • VBO on 15/03/2018 - 15:19
        +1

        Because their parents didn't teach them.

        • idonotknowwhy on 15/03/2018 - 15:52
          +1

          Exactly. And their parents didn't grow up with Credit Cards in Australia either. Need to break the cycle.
          Better to teach it in high schools than rely on Google to protect everyone:
          http://www.bbc.com/news/technology-43398410

        • [Deactivated] on 15/03/2018 - 23:18

          @idonotknowwhy:
          The public school curriculum is on advice of the ministry of education which is an arm of the government. The same government that allowed credit card debt and disproportionate lending by the big banks.

          The teachers in these schools, they may be parents. The same parents that may be making poor financial decisions.

          Do you really want the combination of the above to "teach" your kid lessons about money?

  • ruddiger7 on 15/03/2018 - 13:37

    I think students should be taught things like superannuation and how impactful compound interest is, how to budget, types of investments (money sitting in the bank is useless), how to do tax etc. Most business classes I ever did in high school were hypothetical nonsense and hardly ever really practical.

  • ozlab on 15/03/2018 - 13:45

    It's being taught nowadays and at least in math class they talk about investment.

  • [Deactivated] on 15/03/2018 - 15:05
    +1

    parents play BIG Part.

    my neighbour's cars are worth 25%-30% of their house market value with kids still living at home and the adult kids drive audi and bmw and jeep each with personalised $2500 number plates. you can tell that they show high level to entitlement to many things have no idea or consideration about 'boundaries' and others' hard earned assets.

    my cars are worth less than 3% of my house market value and both my parents and wife's parents taught us by examples.

    but many people learn by mistakes too, although some keep repeating the mistakes.. or even making bigger mistakes.

  • Shwayne on 15/03/2018 - 15:46

    It was taught to me? I feel like these students choose not to learn, and bad test results don't prompt students to repeat, that and they cheat anyway.

    I even had the option of taking a course called Commerce, which taught business accounting as well as personal finance literacy extensively (I'm extremely grateful for that course).

  • peterw1 on 15/03/2018 - 16:14

    any teachers out there who recall teaching students before they became bank robbers/those charged with financial fraud and entered the big house. It would be interesting to know their level of maths comprehension and how greed/stupidity impacted on it. Currently they would certainly understand the concept of time.

  • aussieprepper on 15/03/2018 - 16:51

    Relaxxx no need for this. I get all my solid financial advise from Ozbargain! The first and foremost bestest investment something something in the business?

  • h4zey on 15/03/2018 - 17:19

    teach you kid not to buy things they don't need, with the money they don't have, just to impress people that they don't like..

    and always remember the first rule!

  • Ivan Krazy on 15/03/2018 - 17:32

    I fathom why tax is not taught at schools. Everyone will be impacted by tax and should understand their obligations.

    • OzzyOzbourne on 16/03/2018 - 17:29

      Especially how to borrow money and negatively gear.

  • berry580 on 15/03/2018 - 17:41
    +1

    It has been taught, it is called mathematics for those who are not able to figure it out.

    If they CHOOSE to not think ahead of time and budget properly, then they brought the situation on themselves.

    Please don't make excuses for people on everything.

  • tunzafun001 on 15/03/2018 - 21:34
    +1

    Interesting read. I'm currently attempting to teach maths to a "modified" year 10 group (modified means they hate school, and don't fit the Aussie curriculum mould). Cut a long story short, my idea of schooling should be around the skills for an enjoyable life. So I've got some curriculum freedom. In my eyes mainstream is all about knowledge for future qualifications and people have forgotten how to simply enjoy life.

    So, my topic is about planning a holiday using life skills. My example being a snow trip I took to Nz for 4 days for under $200 (FF points+relocation Rv with company offering free lift passes and free fuel). Made currency exchange work for me (buying low in advance) and bought food when arriving at supermarket etc etc.

    This includes putting a % of earnings away being mindful of accessibility (online deposit accounts, os currency, managed funds,shares). How to find cheap flights using Google flights (return/ open jaw). How to use reward points for free flights (and how people who don't pay their credit cards in full on time help people like me…don't become them). How to find accom deals and use reviews such as trip advisor. How to pick scams and scammers. Legal scams such as money exchanges at airports and extravagant Atm fees. When life and time are worth more than $s.

    All of the above obviously requires elaboration (for example, What is a share,why banks want you to use credit cards etc etc).

    Most of these skills/ life hacks arent in the Aus Curriculum.

    What I do use for Aussie curriculum is an online life game called Essi money. Requires kids to chose jobs, gain experience for better jobs, invest, open accounts, Pay bills, communicate over a simulated 8weeks.

    • [Deactivated] on 15/03/2018 - 21:57

      With respect, you're teaching them how to get the best deal on a product they cannot afford.

      • tunzafun001 on 15/03/2018 - 22:12

        Cheers for the feedback. But can you elaborate? I was hoping to demonstrate that what society deems expensive can be affordable.

        A survey of why people don't take holidays is almost always tied to "can't afford it".

        Do you mean using credit cards for purchasing? Which I'm totally against unless you have the cash in the bank first. Then a credit card may provide extended insurance that Mr H.Norman will charge the unknowing for.

        • [Deactivated] on 15/03/2018 - 22:23
          +1

          The most important rule that will determine if one will ever achieve financial independance. It is the rule many know the snipet of but not the whole thing. It is a simple rule but the modifier makes all the difference.

          Do not spend more than you make over a lifetime.

          People who are bad with money can think they can afford a holiday. Some come to that conclusion because they have the money in the bank, some because they are able to borrow that amount. These are both irrelevant over a lifetime.

          The average person living to the age of 85 will have 45 years of serviceable health to generate enough money to live 65 years as an independent adult. If I have $100,000 and no debt, you cannot establish if I'm rich nor poor because you don't know if I am still capable or when I will die. $100,000 for someone with a week to live is a lot of money. The same amount of money to someone who isn't able to work anymore and have 20 years to go is a very dire situation.

          The problem with the school teaching money management is that they will undoubtedly talk about pensions and superannuations. This isn't money management, it is the failure to manage money.

        • tunzafun001 on 15/03/2018 - 23:49

          @tshow: Super is a 'maybe' safety net. By the time you reach the current entitlement age, it maybe be stretched another 20 years, or maybe not available altogether (see Greece). By then you will either be dead, or have little use for it.

          I encourage creating your own accessible "whenever you want it" super system (ie. shares, dividends -but not all shares are great see Babcock and Brown)/ managed funds/cash). Use some for property (but not all property goes up. See Detroit). Start early, and keep it small. Never more than you can afford to give away.

          If you do own a house, consider a reverse mortgage down the track for a super stream (your kids might hate you, or learn from you).

          As for Don't spend more than you make over a lifetime.. also Don't waste your lifetime with what you make.

        • berry580 on 16/03/2018 - 08:15

          @tunzafun001: reverse mortgage is a great idea for a retiree. The product is a rarity in Australia however.

          It is good in concept, but ultimately can be open to abuse which is likely to draw strong negative publicity which the banks don't like.

  • dufflover on 15/03/2018 - 22:09
    +1

    Why isn't basic personal responsibility taught in school?

    • tunzafun001 on 15/03/2018 - 23:52

      Why doesn't it apply in real life?

  • OzzyOzbourne on 15/03/2018 - 22:59
    +1

    Dunno and why don't schools teach common sense?

    • tunzafun001 on 15/03/2018 - 23:51
      +1

      It's just 'sense' now…no longer common.

  • locknuts on 16/03/2018 - 00:08

    I think mathematical concepts are taught, but not enough focus is placed on money in school. Especially considering you'll spend most of your life chasing it.

  • zzzsianzzz on 16/03/2018 - 00:57

    government is going take care of you when you have no money like baby boomers with higher taxes while rich people are bypassing all the taxes legally with corporate companies.. take home pay is lesser.. pffftt.. You don't have government benefits when you start building your own small fortune.

    back to 101, use a piggy bank and some basic arithmetic, that's how it began.. nothing fancy..

  • wolffram on 16/03/2018 - 09:57

    True. And “How much money do you want to make?”, rather than “What do you want to do?”, should be the question when school kids are helped through their career choices…

  • Vipso on 16/03/2018 - 13:38
    +1

    Great topic.

    I agree that the majority of the Australian population do not understand the basics of personal finance. You need to know basic mathematical concepts very well to be able to make good decisions in life and be good with personal finances. Australia lags behind a number of developed countries when it comes to education. I would encourage all parents with primary school children to place a greater focus on maths in the primary years and not to rely on your school and the Australian curriculum to get by. Basically, invest time in tutoring your primary years school children from as young as 4. I would love to meet entrepreneurially minded teachers to share some of my ideas on this topic.

    The above might help the future generation but who is going to help the current population who make very poor decisions when it comes to personal finance. This ranges from your person who cannot budget and lives beyond their means to the homeowner who believes the price of property only goes up. People need to be taught about investing (risk versus return) and opportunity cost (alternatives). I would love to teach this to young adults but not sure how i can earn an income from it too. Ideas welcome.

  • Imightnotbearobot on 16/03/2018 - 17:32

    THis is where family upbringing makes a difference. There’s only that much a school can teach

  • ratman on 16/03/2018 - 18:03
    +1

    It basically is taught at schools. We did a lot of this in Maths and most of the students were whining and complaining about maths, like they normally do, "why do we need to know how interest works??" or "I know how to add, budgeting is easy". You're taught it all, but people rarely see the importance of it at the time.

  • [Deactivated] on 16/03/2018 - 18:41

    Because the school system is still stuck in the industrial ages. Its easy to churn pupils into zombie employees who does not take risk and to making a mistake is a fail.

    Most teachers don't know the difference between assets and liabilities and how can they teach the students if they don't know and practice these fundamentals.

  • [Deactivated] on 16/03/2018 - 22:12

    It used to be, it was called Commerce.

  • cloudy on 16/03/2018 - 23:17

    I think enough of the maths is taught in school for one to look after their finances. In all my higher finance education nothing really complex is required (numbers and maths wise) to do well.

    What isn't highlighted enough, in my opinion, is the importance of thinking in terms of numbers and rationality.

    here is a simple example,
    https://www.groupon.com.au/deals/hokkaido-baked-cheese-tart

    you can buy one tart for $3 or 6 tarts for $19.

    Now, basic maths will tell you its better to just buy 6 individual $3 tarts (for $18) than to pay for a 6 pack for $19. you get more choice in flavour and u are not constrained by exactly 6.

    But look at the numbers sold. People just dont do the math.

    Compound interset is also pretty easy to understand and work out, I remember bringing up the power of it when i was taught in highschool. But many see it in a abstract nature that somehow doesn't apply to them. Infact many students in school saw maths as a annoying compulsory subject that was meaningless to them in life.

    • kingmw on 17/03/2018 - 19:37
      +1

      That is f**king hilarious! Thanks for making my day!

  • Wolfofwallstreet on 17/03/2018 - 00:55

    I'm sorry but it cannot be possible to teach finance to students at that age since most of them wouldn't care anyway and for most, it will be above their head at that age. This is because when you start teaching Finance, you cannot ignore Probability theory, calculus, Micro and Macro economics, The Black Scholes model, CAPM, regression analysis and etc. You might think they belong to different discipline but they are all link when you are dealing with Finance and especially Investment. Yeah good luck teaching that to kids who don't even know what they do in life at that age and are going through puberty.

  • Aceboy884 on 17/03/2018 - 11:42

    when i was back in high school over a decade a go

    we were taught in commerce, Australia is moving away from a commodity based economy to one a serviced based economy.

    this was before BHP, became BHP Billiton, and it's share was traded at $5 a pop

    This was the only life lesson i've remember from high school, because it was such a load of crap, its unforgettable.

    I don't know what they teach now, but i'm sure it's probably on par with the quality education we've had a decade ago.

  • WillKillfor5Cents on 17/03/2018 - 13:04

    I think people are missing the point, the biggest thing that school omit when a student finish high school is that there is plenty of alternatives out there. Seen a lot of guys who should not be/could not be bothered going to Uni, do it anyway because getting HIGHER education is the right thing to do. They ended up doing degrees that they don't enjoy/useless in finding employment. Now I know all the Anthropology/Literature majors here are going to neg me in droves, but seriously, your odds of getting a FT job in these days and age are quite low. Risk/return payoff = not worth it (unless you are cream of the crops).

    I think school should also tell student there are other LUCRATIVE careers out there, such as going to the mines/oil rig/doing trades and then UNION UP. These guys easily make 200k++ after few years of experience rather than your anthropology majors who are working full time in Coles/Starbucks. School/Uni is not practical enough.

    Sure if you have the interest/capacity to study something and EXCEL at it, it is worth pursuing further education. Otherwise, too many people in Uni are putting themselves in debt (Lucky we DONT have the American system, they are FUBAR generation now, B*LLS DEEP IN STUDENT DEBT).

    Just my 5 cents.

  • Elnato on 17/03/2018 - 18:33

    No doubt there are examples in senior schooling, its the examples and correlation to everyday life that's lacking in schools

  • Bullion78 on 17/03/2018 - 18:52
    +1

    To quote the late, great George Carlin.

    "There's a reason for this, there's a reason education sucks, and it's the same reason it will never ever ever be fixed. It's never going to get any better. Don't look for it. Be happy with what you've got… because the owners of this country don’t want that. I'm talking about the real owners now… the real owners. The big wealthy business interests that control things and make all the important decisions. Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the state houses, the city halls. They got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying. Lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests…"

    The last few sentences in that rant explain why important lie skills like personal finance (amongst many others) are not a part of the curriculum.

  • MementoMori on 17/03/2018 - 23:13

    The monetary system is absolutely not taught at schools - i.e.

    a) How is currency made?
    b) Is the Reserve Bank of Australia a private company or a government entity?
    c) What is fractional reserve banking
    d) Why are our coins silver and gold coloured, but not made from any silver or gold?

    etc etc

  • Baniya on 23/03/2018 - 00:51

    I think “the maths” and “the understanding” of personal finance is different. When I studied Maths in the late 90s, we often extracted the numbers from the wordy questions, regardless of the question, applied the formula and got the answer.

    Just think back to Grade 2. Did you even care if Jason had more apples than Margaret?

    How interest and the economy works, personal finance lessons, tax returns, investing was all missing.

    This has been my biggest personal gripes with my education. I wish Economics and Accounting were compulsory back then. Well done OP, for putting it out there.

    Glad to also read that things look to be improving now.

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