Teaching Financial Literacy in High School

teaching financial literacy in high school

financial literacy awarenessAs a teenager I remember sitting in an economics class in high school and learning about the stock market as well as the value of gold. I remember my teacher bringing in a small one ounce gold bar that he had purchased and I believe at that time it was worth a few hundred dollars. He was very excited about how much that ounce of gold would increase in value in the years to come. As of April 12th that one ounce gold bar is valued at $1,534.90.

(I wrote this post and then saw this interesting bit of news online: Gold Investors Exit Amid Price Collapse)

In an effort to teach us about the stock market he had us a do a semester long project where we each went through the newspapers (no Internet back then) and chose 5 different stocks (hypothetically) to purchase.

Before we chose our stocks we discussed things such as:

  • the key characteristics to look for when considering different companies
  • our risk tolerance
  • the difference between a bull market and a bear market
  • and portfolio diversification

We were given time to research each company that we wanted to purchase stocks in, as well as ask our families for suggestions. Once we purchased our stocks it was our job to track their value every morning, which included the variation in price from day to day, for the rest of the semester. It was somewhat of a competition to see who in the class would earn the most by the last day.

What I liked about this project was that we were given a chance to practice what we were studying. The concept of investing was made fun, which in turn made it much more interesting than simply reading a text book about the concepts of investing and then writing an exam on it.

Financial Literacy Needs to Be Taught in High Schools

Why did I decide to talk about teaching financial literacy in high school and the things I learned in my economics classes?

Because, although this one class opened our eyes to the possibility of investing our money in the stock market in the hopes of receiving a nice return on our investment, it wasn’t enough to prepare us for all of the different financial aspects that adults need to know to be financially successful.

Throughout the 4 years that I attended high school I think there were many times when financial literacy could easily have been incorporated into the curriculum that the teachers were teaching, but it wasn’t.

Home Economics Class

sewing in high schoolFor example, in home economics, instead of just teaching us how to cook, the teachers could have taught us how to meal plan, how to buy groceries, how to shop for good deals, how to create a grocery budget and stick with it, etc.

Instead of teaching us how to sew a stupid stuffed monkey they could have talked about how much money a person could save by learning how to make their own clothes, as well as home accessories such as pillow cases, curtains, duvets, and so on.

They also could have grouped us into pairs and used practical projects to teach us about finding our own place to live and how much that would cost. As well as how much it would cost to get married and have children one day.

Accounting Class

In our accounting class they could have taken some time to teach us about personal budgets, banking – including writing cheques, and balancing cheque books.

I remember my first roommate in college didn’t even know what a “rubber cheque” was, because of course she was never taught that.

One of the many things that I really wish they would have taught us in high school was that interest rates on savings accounts and other investments can fluctuate quite a bit and that the 22% interest rate we were experiencing at that time was unusual, and that it most likely wouldn’t stay like that. Heck, for the past 10 years interest rates have been sitting between zero and two percent.

Why do I focus on that point so much? Because during my years in high school I was earning a lot of money on my savings account, with rates like that, and it led me to believe that I always would. I know how crazy that sounds, but as a teenager, with limited financial knowledge, it was all I knew. I was never told that it could/would change one day. Kinda like my roommate not knowing what a rubber cheque was, and that was even after she wrote a couple of them.

I have no idea how the curriculum for high schools is chosen. I wouldn’t be surprised if many schools are still using the same old text books that we were using so many years ago.

When many of us are young we are encouraged to attend high school and college to get an education that will hopefully help us find a nice job and make a nice income.

Personal Finance

But what about teaching students financial literacy that we can apply to our personal lives so that we don’t spend more than we make.

Why not teach us how to save money first, and then buy a new car, or a house?  Talk about how important it is to save up for a vacation instead of putting a vacation on a credit card and paying it off for the next 3 years.

Many times I’ve said that some people are born to be spenders and some are born to be thrifty.

For those of us that are born to be spenders, education around personal finance is even more important.

Yes, it is great for all of us to learn the skills that we need to find a good job. However, if all we ever do is spend every dollar we earn, and then some, how have we really benefited from our education?

There is an on-going argument around the fact that parents need to teach their children about money. But what if the parents do not have the skills, time or knowledge to do that? They rely on the schools to teach those skills. And the schools rely on the parents to teach those skills. And that is where most people miss out.

If you take a look at pretty much anywhere in this world it is pretty obvious, that for many people, financial literacy wasn’t taught at school or at home. But it should have been!

April is Financial Literacy Awareness Month and I am happy to participate in the Financial Literacy Blog Carnival that my good friend Shannon over at The Heavy Purse has organized for today. Please drop by her blog today to check out her post as well as all of the other participants.



    • Justin

      Justin 04/17/2013 3:49 a.m. #

      School teach us skills that allow us to earn money, but not what to do with it. This is a shame. It's like teaching someone how to fish, but not how to cook it.
      I suppose they think that parents should be the ones to teach life skills to their children, but many parents are just as in the dark as the kids.
      It's a shame really that more people don't know how to handle their money.

      • Shannon @ The Heavy Purse

        Shannon @ The Heavy Purse 04/17/2013 9:45 a.m. #

        Oh, I love this - "It's like teaching someone how to fish, but not how to cook it." That's so true and that is what is happening today. Yes, we need to earn money but even more importantly we need to learn how to THINK about money and how to use it properly.

      • Sicorra

        Sicorra 04/17/2013 1:10 p.m. #

        Exactly, they teach us skills to find a job but now how to deal with the income, or for that matter life in general. And to take it one step further, they often do not teach people how to interact with others once they get a job. And many parents skip that as well. Very unfortunate.

    • Glen @ Monster Piggy Bank

      Glen @ Monster Piggy Bank 04/17/2013 5 a.m. #

      It is no wonder that both the people and the governments around the world are so indebted. The same people running the country have had the same level of education (when it comes to finances) as everyone else.

      I think Laurie from the frugal farmer has the right idea - she is home schooling her kids and I bet they get to learn more about money management than most kids will through the traditional school system. I also bet that it holds them in good stead too.

      • Sicorra

        Sicorra 04/17/2013 1:12 p.m. #

        It seems like the only people that have learned how to manage their finances properly are the ones that made the extra effort to do so. Everyone else is at the same level, as you said.

    • Laurie @thefrugalfarmer

      Laurie @thefrugalfarmer 04/17/2013 5:14 a.m. #

      Sicorra, wonderful post! You're so right: we can do SO much more in the schools by just adding some basic stuff to classes like Home Ec and Accounting. Imagine the difference it would make in the world. :-)

      • Sicorra

        Sicorra 04/17/2013 1:14 p.m. #

        Thanks Laurie! Maybe some day they will update what they teach.

    • DC @ Young Adult Money

      DC @ Young Adult Money 04/17/2013 5:21 a.m. #

      In high school I was really interested in business, economics, etc., but there simply were not offerings for these subjects. I did take a college econ class my senior year of college, but I wanted more. I think there should definitely be more classes in high school on these topics, and I think there is demand for them as well.

      • Sicorra

        Sicorra 04/17/2013 1:17 p.m. #

        They didn't offer business and economics classes in your high school? That is unfortunate. I wonder why those were not included.

    • Pauline

      Pauline 04/17/2013 6:43 a.m. #

      Great post Sicorra. Financial literacy should be mandatory in high school. I like the idea about learning meal planning and grocery shopping at school too. Many parents rely too much on school to educate their kids and in the end forget to teach them what is not taught at school.

      • Sicorra

        Sicorra 04/17/2013 1:19 p.m. #

        Thanks Pauline! Yes, there are so many things that are not taught at school or at home. The schools complain that there is not enough time and the parents probably figure they are too busy. Sad.

    • AverageJoe

      AverageJoe 04/17/2013 6:55 a.m. #

      There were many times that we could have had more financial literacy in high school! I was lucky to get to speak at local high schools on several occasions and every time the kids wanted more and we ran out of time.

      • Shannon @ The Heavy Purse

        Shannon @ The Heavy Purse 04/17/2013 9:49 a.m. #

        I've had the same experiences. Parents think kids don't want to learn about money but they are HUNGRY for the knowledge. They are smart enough to know the role money will play in their lives. They want someone to tell them how it works and no one is.

      • Sicorra

        Sicorra 04/17/2013 1:21 p.m. #

        It is very unfortunate that it gets skipped over and then kids have to learn about it on the street so to speak. Some people figure it out without any problems, but as we can see around the world, many do not.

    • Jenny @ Frugal Guru Guide

      Jenny @ Frugal Guru Guide 04/17/2013 6:59 a.m. #

      Unfortunately, although there are states that require personal finance courses, these are usually taught in such a way that they don't really connect to kids, and kids who have gone through them fare no better than those who haven't. Such courses MUST be extremely, directly relevant. Pretending to run through a number of scenarios would be ideal, so that kids could understand the consequences of their actions.

      Part of the problem is that just about any paycheck seems like a lot to teens because they live subsidized lives with their parents. So $25k a year is "a lot," and $50k a years is "a lot," and so is $100k a year. They have no context for actual living expenses, taxes, transportation costs, etc.

      • Sicorra

        Sicorra 04/17/2013 1:26 p.m. #

        I agree, actual projects\scenarios need to happen. It can be fun and educational at the same time. I remember watching a show once where the class project included pairing up the boys and girls into couples. They were given a specific amount of pretend money each month and they had to find an apartment, figure out how much groceries would cost, utilities and so forth. Then half way through the semester they were given a doll and told they just had a baby and that they could never leave it unattended which meant they had to find a babysitter too. It was an amazing project.

    • Debt Roundup

      Debt Roundup 04/17/2013 7:23 a.m. #

      I agree with you Sicorra. I actually took a home economics class and that is what taught me how to cook. I wish they would have had some good lessons about learning how to shop with a budget, but that was no where to be seen. There are a lot of missed opportunities in school when it comes to finances.

      • Sicorra

        Sicorra 04/17/2013 1:39 p.m. #

        So many missed opportunities and the students do not know to ask for help with that stuff because they are too young to realize that they will need those skills one day.

    • femmefrugality

      femmefrugality 04/17/2013 7:26 a.m. #

      I'm so with you on these! I've witnessed some great teachers doing some of these things even though it wasn't part of the mandated curriculum. Then I've sat through dry, boring, inapplicable classes as well.

      Side note: That article on gold was really interesting! It makes sense that the value would rise in a bum economy and then drop when things got a bit better, but that never occurred to me before.

      • Sicorra

        Sicorra 04/17/2013 1:41 p.m. #

        Some teachers do go the extra mile and put more effort into making sure that their students learn by using practical examples. Practical examples make it easier to remember vs reading stuff in a text book or listening to a lecture for 60 minutes.

    • John S @ Frugal Rules

      John S @ Frugal Rules 04/17/2013 7:30 a.m. #

      Good post Sicorra! Like you pointed out, there are many ways that basic finances principles can be taught in the school system in a way that's not being done. I think it should happen both at school and at home, but you never know what goes on at home so by teaching it at school you can start to help solve the problem.

      • Sicorra

        Sicorra 04/17/2013 1:44 p.m. #

        So true! The schools could ensure that everyone is taught the same financial courses. At home some kids come from broken homes, where their parents are so busy working to keep a roof over their head that they just don't have the time to teach as well. It sounds unfortunate but it happens all the time.

    • Thrifty Dad

      Thrifty Dad 04/17/2013 8:41 a.m. #

      Great post! I never even had one school course discuss money subjects, growing up. It's sad. Those fake stock investing contests like they have in the papers are fun, and sure get kids interesting in investing. But because it's usually a short-term thing, it's usually the ones who pick the riskiest investments that come out on top. Not exactly the best lesson. I love your idea of turning every class into a place to incorporate personal finance education.

      • Sicorra

        Sicorra 04/17/2013 1:46 p.m. #

        Thank you! I can't believe you didn't have one class that talked about money. See it just goes to show you that what is taught is not universal, even across Canada.

    • krantcents

      krantcents 04/17/2013 8:47 a.m. #

      I taught a personal finance class in high school for about 4 years. For the students to get the most out of it though, they need to practice it. It is a little like a foreign language, if you don't practice, you forget it.

      • Sicorra

        Sicorra 04/17/2013 1:48 p.m. #

        Exactly. The ones I remember the best were the ones where we did actual projects and put things into practice. I remember that Economics class like it was yesterday.

    • Mackenzie

      Mackenzie 04/17/2013 9:52 a.m. #

      Completely agree!! They really need to teach financial skills in high school, even if it's just the basics, like how to balance a checkbook, etc...

      • Sicorra

        Sicorra 04/17/2013 1:49 p.m. #

        How to balance a cheque book, how to do a tax return, all super important things.

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 04/17/2013 9:56 a.m. #

      This is a fantastic post, Sicorra! Thank you for participating in my carnival. Your teacher did a great job bringing investing to life and there are so many opportunities for finances to complement the current curriculum. Home Ec is a great example and understanding food costs, food waste, running a household budget is even more important than baking the perfect apple pie (although that's a close second). While I still believe parents are the best teachers, I agree that many parents are either simply unaware it is something they need to do or their own situation prevents them from feeling qualified to do so. This is why I'm excited to see school getting prepared to introduce financial literacy in schools.

      • Sicorra

        Sicorra 04/17/2013 1:53 p.m. #

        Thanks Shannon and thanks very much for organizing this!

        It may be a big adjustment for teachers but hopefully more courses around managing your finances will get added in. Sometimes even the most educated parents do not take or make the time to talk to their families about finances.

        • Shannon @ The Heavy Purse

          Shannon @ The Heavy Purse 04/17/2013 4:19 p.m. #

          Absolutely! Even parents who never struggled with money and made smart choices from the get-go need to talk to their kids about money. Otherwise kids have no idea how to run a household and don't automatically follow the right path. They may instead take a detour through a slew of credit cards, not understanding that their parents paid of their bills every month, etc.

    • Erin (aka BrokeMillennial)

      Erin (aka BrokeMillennial) 04/17/2013 9:59 a.m. #

      I could not agree with you more. Financial literacy desperately needs to be taught to young people, especially before college/entering the work force.

      I'm impressed your high school even offered an accounting class. I want to high school in Japan and China and attended international schools. Neither of them offered home economics (nor "shop class"). In my opinion it was because they felt those skills weren't worthy skills for us to learn. Boy, I wish they did teach us. Being able to sew your own clothing, even just to fix a button or a tear is such a great skill to have and saves some serious cash!

      • Sicorra

        Sicorra 04/17/2013 1:57 p.m. #

        Thanks Erin :-)
        That is so impressive that you went to school in Japan and China. I would imagine that even though you missed some of those classes you must have had an opportunity to experience so many other cool things?

    • Nick

      Nick 04/17/2013 10:29 a.m. #

      I agree with everything you wrote, but I also think personal finance classes need to start earlier and continue on to college. I believe it should be in elementary curriculums and a requirement for "general education" in college. Thanks for your post!

      • Sicorra

        Sicorra 04/17/2013 1:59 p.m. #

        I agree with continuing on to college for sure, but I think grade school kids would probably be too young to grasp the concepts and may just get bored.

    • Corina Ramos

      Corina Ramos 04/17/2013 11:22 a.m. #

      You're so right Sicorra.

      When I was in high school my accounting class only taught us about record keeping and like you said how to write checks and balance our checkbook.

      Now that I think about it there was lots of room for incorporating how to save money and teach us how to make good financial decisions.

      I hope the government will wise up and incorporate more in the schools curriculum. Great post!

      • Sicorras

        Sicorras 04/17/2013 2 p.m. #

        Thanks Corina! I think it will be a lot of work for them to revise they way they currently do things, but hopefully over time they will make some serious changes.

    • Cat

      Cat 04/17/2013 1:36 p.m. #

      Learning the basics would be such a great idea - I really hope they introduce a course on this soon!

      • Sicorra

        Sicorra 04/17/2013 2:01 p.m. #

        Introduce a course or add specific things into existing courses.

    • canadianbudgetbinder

      canadianbudgetbinder 04/17/2013 9:16 p.m. #

      How fortunate that you were taught about stocks in high school. I wish our school system did that for me as I really would have soaked up all that information. I also believe that education of finance should start in the school system because it's the system we can trust to teach our kids how finance works. Many may argue that it should start at home and it should if the parents understand how to teach their kids about finance and understand it themselves. Thanks for sharing.

    • @debtblag

      @debtblag 04/17/2013 10:12 p.m. #

      That's interesting. We did the stock-picking game in grade school too and I always thought it several grades too advanced. Little kids might be better served seeing the effects of saving a little bit in a bank account every day; or to flip it, seeing how quickly credit card debt can add up

    • CarolB

      CarolB 05/29/2013 5:19 a.m. #

      You are so very right! Too many kids have no reality of what it takes financially to live in the world today. I used to do a one-day seminar at local high school freshman geared towards the girls, and why they would want to keep taking math and science. (My undergraduate degree is in engineering.) I did a segment on take-home pay and how much they would need from that check just to cover their basic cost of living. Saw a lot of kids take notice at that! They really had no clue!

      We talk with our boys about fiscal responsibility. For example, I take my boys from time to time to the grocery store. As painful as that is - lol - it has opened their eyes as to how much it costs to feed them, and why I don't buy all that soda, or why we don't go out to eat all the time. We've discussed how much gas costs in relation to the cost of driving my gas-guzzling SUV (hey, it's paid for and ten years old), and why I "schedule" my travels and if something is forgotten at the store, I don't just run back out to get it.

      I just think too many kids aren't being taught the basics of living fiscally responsible when they need to be.

      • Sicorra

        Sicorra 05/29/2013 11:35 a.m. #

        You are exactly right Carol. Many are not taught basic financial skills or any life skills for that matter. And it is very sad.

        How cool that you did that seminar. I could see that being extremely beneficial. And to discuss their pay check is critical. In regard to living expenses but also in regard to how much of their pay that they will not receive because it goes tot he government for taxes. How many young people are told in school that a certain job pays $50K a year and they think that is great, not realizing that a nice chunk of it goes to taxes and other things first.

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