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Karyn N. Lewis
Professor S. Warycka
Written Argument 0502-443-01
Fall 20081

Education for Living in the World:

Support for an Early Introduction to Personal Finance Management

While technology, the global economy, and other social trends are changing the financial
planning environment, many fundamentals remain constant (Kapoor, Dlabay, and Hughes vi).
Individuals’ ability to make informed choices related to spending, saving, borrowing, and investing
continue to be the foundation of long-term financial security. Each day we are surrounded by new choices
for shopping and other activities, while each day personal finance planning activities are affected by
changing influences in our society and the economy. With a continued emphasis on technology, real-
world decision-making, and practical advice from financial planning professionals, personal finance
knowledge from an early age would provide a strong foundation for current and future personal economic
The logic behind teaching children and teenagers about personal finance is pretty obvious (Bal).
Just think of all of the finance clichés: start investing as early as you can, the most important factor in
investing is time, don’t get into credit card debt, etc.—all things that are best to learn sooner rather than
later. However, the basic aspects of personal finance currently aren’t taught in schools. Is it any wonder,
then, that when kids go off to college they rack up so much debt? A simple personal finance class with
discussions on retirement, the negative impact debt can have on a person, automobile financing, and
saving for the future instead of buying for the now should be implemented in every high school across the
Every week or so, there always seems to be a new article in CNN, USA Today, or Yahoo about
young adults struggling with debt, whether it be from credit cards or loans in general. High interest rates,
hidden fees, whether or not to consolidate debt—these terms and concepts are mostly unknown to young
adults (Kim). A prime example is thinking they just have to pay the minimum on their balance and not
realizing that by doing so, they pay 2-3 times as much in the long run. Alongside that, most young adults
don’t have a clue on how to invest their money. They don’t know what a Roth IRA account is, or a 401k,
or the magic of compound interest, the tax benefits associated with investing in a vehicle, etc. Credit
score is another big thing. A lot of young adults don’t bother to check up on it to make sure there are no
errors. Even something as basic as creating a simple budget is beyond the grasp of some young adults, or
the intangible things such as learning to differentiate between need and want, delaying the gratification,
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and having an inner sense of value. There’s a lot of specialized knowledge out there that young adults just
aren’t aware of on when it comes to how they can invest their money. These concepts must be introduced
in the classroom early on for the most benefit.
A finance class that teaches fiscal responsibility and retirement planning would be a benefit to
many young students. Instead of going off to college and binging on shoes, clothes, beer, cars, televisions,
etc, maybe they would think twice before piling on the debt. I am guessing that most of these students
graduating with a ton of credit card bills assume they will just pay off the bill when they get a job, but this
is often not the case. In fact, the average college student is now more than $20,000 in student loan debt at
graduation (Weston), with more than $3,262 in credit-card debt as well. On top of that, the personal
saving rate has declined into the negative territory (Walker) and revolving consumer credit has reached a
record level of $907.4 billion as of July 2007 (Spencer)—growing by 6.6% per annum. Furthermore, the
average U.S. household owes $8,249 in credit-card debt (U.S. Department of Commerce). Overall, the
official poverty rate in 2007 was 12.5%, or 37.3 million people who lived in poverty (U.S. Census
Bureau), with a total of 822, 590 non-business bankruptcy filings in 2007 alone (U.S. Courts). Based on
these grim numbers, it’s surprising that money management is not a mandatory subject in high school.
Why don’t schools teach personal finance? It’s probably not a stretch to say that most people
would be happy to see personal finance being taught in schools. However, there may be many reasons
why it’s not. To start with, school budgets are already limited (Silicon Valley Blogger). Parents, teachers,
and school administrators alike have their eyes on public officials to pass mandates for school funding;
any delays throw huge wrenches in the schools’ planning and budgeting processes. If many existing,
standard classes such as art, music, or P.E. sometimes get axed because of limited resources, it makes
sense that it would be much harder for unconventional subjects like personal finance to make headway in
school curriculums. Money management or personal finance topics may already have some coverage in
schools—just not the way we think. The topic of money is often threaded into other subjects—for
instance currency may be discussed in history or social sciences, or money problems introduced with
mathematics. The subject of finance doesn’t get its own focused class, but may be taught in bits and
pieces across various subjects. Overall, money management is not covered in depth at schools because
there’s not enough support for it.
It may be that we spend ourselves into oblivion not just because we can’t help it, but because we
just don’t realize we’re compromising our financial futures by doing so. The lack of awareness and
education in the area of money is what’s keeping many of us broke. The best long-term solution to money
management crisis is educating people early and making financial capability a compulsory part of the
school curriculum and embarking on a public awareness campaign to show the potential hazards of not
saving (Bal). Financial literacy is necessary education for living in today’s world.
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Works Cited:
Bal, Robin. “Should Schools Have Money Management Classes?”, 2007.
Web. 10 Nov. 2008.

Kapoor, Jack R., Dlabay, Les R., and Robert J. Hughes. Personal Finance. 8th ed. New York: McGraw-
Hill/Irwin, 2007. Print.

Kim, Brian. “Top 5 Things That Should Be Taught in Every School.” Web. 10 Nov. 2008.

Spencer, Julia. July Debt., 11 Sep. 2007. Web. 10 Nov. 2008.

Silicon Valley Blogger. “How Would you Grade Your Money Management Skills?”, 4 Aug. 2008. Web. 10 Nov. 2008.

U.S. Census Bureau. Poverty: 2007 Highlights., 2008. Web. 10 Nov. 2008.

U.S. Courts. Bankruptcy Statistics., 2007. Web. 10 Nov. 2008.

U.S. Department of Commerce. “Projections of the Number of Households and Families in the United
States: 1995 to 2010.” Bureau of the Census. Web. 10 Nov. 2008.

Walker, David M. “Saving Our Future Requires Tough Choices Today: Fiscal, Retirement, and Health
Care Insecurity.” U.S. Government Accountability Office, 2 May 2007. Web. 10
Nov. 2008.

Weston, Liz P. “How to Blitz Your College Debts.” MSN Money., 2008. Web. 10
Nov. 2008.