Personal Finance 101: What Should Be Taught In High School?

Some friends and I were talking about the US educational system and how we aren’t taught some of the more basic and practical aspects of life, one of them being personal finance. Think about it, what did you really learn in high school about personal finance? Why aren’t we taught about money from an early age? We learn countless irrelevant subjects that most of us if tested would fail today, but when it comes to a subject that would stick with us for a lifetime, there isn’t a mention of it anywhere that I could see in high school.

So what would a personal finance 101, 201, 301 and 401 class look like? This week we’ll address the different levels and what should be taught in these classes. A personal finance curriculum if you will. Feel free to add your own suggestions in the comments area.

Personal Finance 101 Curriculum Overview

Ideally this would start in 9th grade (1st year of high school if not sooner) and we’d start off with the basics.

Attitudes About Money

Assignment: Students will be asked to write a short essay describing their attitudes about money. What have you learned thus far about money and it’s meaning to your life. Do you work for it? Do you have free access to it? Do you save it or do you spend it? What does money mean to you? Be sure to indicate specifically what your parents have taught you about money so far. Personal finance is personal so there is no wrong answer!

Your Paycheck: FICA, Medicare, State Tax, Local Tax, and Federal Tax

What are they, where do they go and why do they get paid before you do?

Assignment: Research your federal, state and local tax rates and familiarize yourself with the following sample paycheck:

Budgeting and Cashflow

Budgeting Basics-Create a budget based on paycheck pictured above
Tracking Your Spending
Pay Yourself First (Saving)

Assignment: Create a budget based on paycheck pictured above. Students will be assigned different life scenarios based on the CASHFLOW 101 board game by Robert Kiyosaki and write a reflective essay on the importance of budgeting and saving money wisely.

Savings and Investing

Importance of Saving: Set It And Forget It, Making It Automatic
Saving For a Big Ticket Items (Car, Shopping Spree, etc)
Emergency Funds
Compound Interest Is Your Friend: Make Her Work For You!
High Yield Savings Accounts and other types of savings accounts
Using Webware To Track and Achieve Your Savings and Investing Goals: Yodlee, Mint, Rudder, Quicken Online/Mobile, PocketSmith et al

Assignment: Identify the top 5 high yield savings accounts based on interest rates and obtain the permission of your parent or guardian to open one in your name. Then, based on your fictional paycheck and life scenario assigned in previous classes, detail your monthly expenses and determine how much you’ll need to save in an emergency fund.

Credit and Debt

Credit Basics: What is Credit?
Avoiding the Credit Trap
What does the APR, Interest Rate, Billing Cycle and Universal Default mean to you?
Your FICO score and how it shapes your financial life
Debt To Income Ratio: How Much Is Too Much?

Assignment: Write a reflective essay on appropriate uses for a credit card. Create a case detailing an item you really want to purchase, however, you are 6 days until your next paycheck and it’s now or never. Write down the pros and cons of purchasing the item now using a credit card instead of later using cash. Please be thoughtful in your answers.

How’d I do? What would you add to the first year of a personal finance 101 class for high school students?

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About the Author

GingerGirls Just Wanna Have Funds is a personal finance website dedicated to educating and empowering women in the area of personal finance. Our articles center on money management: making it, saving it and growing it which supports our theme: Breaking Financial Ceilings One Stiletto At A Time. We have been featured in Business Insider (contributor), Lifehacker, Consumerist, MSNBC, Essence, Wall Street Journal, Good Morning America and MSN Project Engage Web Series. I believe in a future where women can have financial freedom and choose the life they want to live by taking control of their finances. You only need to want it hard enough while letting go of limiting beliefs around money. Join me as I share tips that will help you light up your financial life and take control.View all posts by Ginger →

http://feedingyourpig.blogspot.com Lora

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http://feedingyourpig.blogspot.com Lora

In my accounting class we had to do the books for a business and we had to reconcile a bank statement. We never did budgeting – that's not an accountants job I guess.
Getting through college with little or no debt should be encouraged.
Credit vs living within your means should be discussed.
My home ec class we had to budget for a wedding I think – that was interesting except the teacher had no reasonable resources for us and the internet wasn't such a hot item.
I'm certified as a math teacher. No class I've taught has had a curriculum section for check writing and registers, budget creating or balancing. I think there was a lower level "models" class that had something of that nature and was intended for special needs students. What about the other 90% of the students?
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Christina

You make some great points, but I think you would be pleased to hear that I actually learned a lot about personal finance in high school. Economics and Personal Finance classes were thrown at us in every direction. There were even investing classes that required us to look at the stock market, subscribe to penny stock newsletters, and we even got to play a stock market game in one class (it was like the stock market, but we didn't use real money). I know one of the newsletters I am still subscribed to today from bullrally.com. We also had people come in and talk to us about the importance of saving and how one dollar a day could do so much for us in 60 years.
Christina

You make some great points, but I think you would be pleased to hear that I actually learned a lot about personal finance in high school. Economics and Personal Finance classes were thrown at us in every direction. There were even investing classes that required us to look at the stock market, subscribe to penny stock newsletters, and we even got to play a stock market game in one class (it was like the stock market, but we didn't use real money). I know one of the newsletters I am still subscribed to today from bullrally.com. We also had people come in and talk to us about the importance of saving and how one dollar a day could do so much for us in 60 years.
http://www.debteliminationamerica.com/ rama

The value of saving should be taught in high school. A little background in Investing in business won't hurt. The consequence of living extravagantly like falling into debt and the need for debt elimination.

Moral values in finances such as honestly is also very important to instill in early age.
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I agree with Stock Market 101. We need to have a fun way to introduce children to the concept of money at home first before implementing programs within our school systems. Otherwise, lots of children will be left behind.
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I think money teaching should start sooner then high school. If people even realized how much money came out of their checks each month (with direct deposit they really don't pay attention any more) they may be more politically involved also.

Teaching it at school though probably won't help much if there is no good examples at home, but it's better than nothing.
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I was taught to write a check during grammar school–but never how to balance the actual check book. These building blocks of personal finance would have been a valued skill I would have loved to acquire early on….
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I'd add balancing a checkbook. It's a relatively simple process, but a scary percentage of adults can't (or won't) do it.
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http://www.laanpenge.org/ Hurtig lån

Agree this topic should be at school for all young people. I would have benefited from some lessons topic.

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http://intensedebate.com/people/itswrite4u itswrite4u

It is a good thing to offer it in schools, because some parents still do not have great financial habits themselves. So, there should be something offered maybe after school or during the summer. When teens start working after school/summer jobs, they should be able to get some kind of training in saving and how to better manage their money. I know I did not get the great lesson at home because my mother did not have any credit, nor a bank account. It takes a village to raise a child.
http://www.mycricket.com/cricketplans/ Jenny from Cricket

Because I'm totally biased on financial lessons that should be taught, I think there should be a semester-long class on cell phones. Here is part of my lesson plan for the semester: Cell phone usage. Pay-as-you-go plans vs. Monthly plans vs. Contract plans. Do you really need nationwide coverage? Picking service based on the best company and coverage for your area, not based on the funnest phone to have. Why a cell phone is not an mp3 player.

With so many kids wanting cell phones, this class should be required. Either that or find a monthly service (like Cricket…sorry, couldn't resist) where you know there are no overages and you don't have to get in depth into text pricing vs. call pricing vs. mobile web pricing and how to track it all so you don't go over your allowed minutes … because it's all just included.
http://www.moneyfunk.net Money Funk

Oh, I like this article. Perhaps it will help me teach my own kids, because they sure are not learning this at school! Well, even if they take a microeconomics class it goes in one ear and out the other. Maybe if I teach my kids at home some of these basic principles they will grow up respecting their money. Ya think?

http://intensedebate.com/people/Gingerlatte Gingerlatte

One can only hope. I tend to think that children should be taught the more practical aspects of life in HS and not things most will cease to use upon graduation.

http://www.budgetsaresexy.com J. Money

Love it. I think teaching ANYTHING finance related in schools would be great. Some already do this, but obviously we could use more. I like the idea of having classes read a book or two on it. The Richest Man in Babylon is a nice and easy one that shares simple information within a story.
http://www.savingcashtips.com/blog/learn-to-invest-money/ JaneS

Rich Dad Poor Dad has a comic book for young kids, I've been teaching my 10 year old since he was 6; and also Rich Dad For Teens. He has the best system – don't expect to ever see this kind of teaching in public schools, which are training kids for cubicles and production lines, not wealth!
careernation

I agree that this is an excellent concept, but more importantly I think parents need to be taking a more active role in teaching their children from a very early age about personal finances – don't leave it up to the school.
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Children get cell phones at younger and younger ages nowadays. Which means they are getting credit cards too. Credit and credit use need to be concentrated on in high school today. Not many high schools today even have personal finance courses, but teaching responsible spending, budgeting, and credit use would be paramount in my eyes.
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I think that is a good list. Most schools are teaching to standardized tests. They don't have time or resources to teach electives but I think places like church and recreation programs could offer these things.

The American Girl store offers financial seminars for the little girls. I think that's pretty cool.
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What a great article.

I totally agree, kids need to be taught the basics of finance from an early age. Once school is finished with they won't have help or guidance.

The fact that many previous generations have suffered boils down to not have the help in the first place.
K.Ann

This was great! I was just telling my CFP that money matters need to be implemented in high school. We need to be able to tell our youth how to handle money better. That way, they will not be without knowledge when credit card companies start trying to get them in college.
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That's what they wanted us to teach when I did PF classes for a high school. It didn't go as well as we had hoped because it just wasn't organized enough. We actually needed 2 days to do the whole thing, not just half a day.