Personal finance encompasses everything in our lives that pertains to money including setting and achieving financial goals. At some point every one of us has to reconcile the money we’re earning with the money that we’re spending. With this in mind, we would expect some level of personal finance to be a part of our required education, and yet it isn’t taught to a great extent in our school systems. Most people learn personal finance from what they read, hear, and experience, and from watching their parents. An agreed upon educational framework for personal finance and how it should be implemented really doesn’t exist.

With an abundance of financial information filled with diverse opinions and recommendations from financial experts and the media, most adults say they are overwhelmed by the amount of material available. This saturation leads to apathy due to the difficult task of sifting through it all to glean prudent and relevant material. Given this, we shouldn’t be surprised that for many people, managing their personal finances is an afterthought, or that trial-and-error is often serving as the personal finance classroom.

According to recent surveys by Harris Interactive, nine in ten adults consider it essential for adults to be knowledgeable about personal finance and ninety-nine percent of U.S. adults support personal finance teaching in high school. Yet very few states require a personal finance course or include it as part of another subject. One main reason for this is that personal finance concepts are not part of standardized tests, so there’s less of an incentive to spend valuable teaching time on the topic. Since standardized tests are used to evaluate teacher and school effectiveness, the old adage that “we get what we measure” holds true and personal finance instruction is considered secondary, if at all.

In addition, there is a lack of agreement on a personal finance curriculum. There is a continual stream of recommended methods and systems for debt reduction, saving, and investing that makes it difficult to settle on a general program that would meet the needs of most students. And what needs would they be meeting? Very few High School students are managing household finances and personally feeling the pressure of reconciling monthly income with ever-increasing expenses. As an educator, I know firsthand how difficult it is to impress upon students the importance of a lesson that will benefit them later in life, yet has little application in the present. Postponing the purchase of a new iPhone or cutting back on designer fashions doesn’t carry the same impact as making trade-offs between food, housing, utility, and medical costs to make ends meet. Until we actually have to manage our own finances and plan how our income is going to cover our expenses, we will not learn the hard and fast rules of balancing income and expenses. We end up taking this course on our own in the school of hard knocks, which can be an expensive lesson.

Forming practical personal finance habits in younger generations is an issue of major importance shared by almost every adult, yet the way to go about it eludes even the experts. A recent Fidelity Investments competition soliciting an effective means of teaching teenagers the financial skills they need today, resulted in a variety of entries including games with pretend budgets and spending, and simulated financial scenarios. The winning idea would train teenagers to teach their peers, and leverage the greater impact of hearing the lessons from people their own age. But again, the application in their lives would be limited to their current financial situation.

Generally speaking children learn from their parents and often what they learn at home overshadows what they’re taught in school. As a result of the housing market boom-and-bust, persistent unemployment rate, and ongoing increases in medical expenses, many adults ares just learning the intricacies of personal finance themselves. This renewed focus on personal finance should be shared with younger generations, highlighting the steps that they can take to ensure that they build a firm financial foundation to weather economic downturns. Hiding financial woe from children does not help them learn from mistakes.

We need to impart the basics of personal finance to our children, and how to apply sound financial principles, manage money efficiently, set and meet financial goals, and maintain a course of action to meet those goals. This means that we have to understand these concepts ourselves, and effectively pass them on. Very often what our children are taught is that “money doesn’t grow on trees”, but a more instructional explanation is needed to counteract what they’re constantly hearing around them.

A focus of the media and the majority of mainstream thinking today are contrary to sensible personal finance and achieving financial independence. We live in a consumption oriented society, and young people are bombarded with marketing attempts to separate them from their money or encourage them to take on debt to have the things that they want. Are young people learning the “value” of money and how to manage their finances, or are they learning that they can have all of the things that they want right now?

They need to understand how lifestyle choices affect their financial health, how spending habits are formed and persist, how to set achievable financial goals, and why financial planning is essential. They need to recognize the consequences of accumulating debt, the basics of investing and investment types, and more. Given the breadth of information, it’s no wonder that the preference is to have it taught in schools.

Incorporating personal finance into the school curriculum will fall short of success unless students see and hear at home what they’re learning in the classroom. If they’re taught in school to live within their means and plan for the future, and they see a different set of financial rules in use at home, then the real-world influence at home will overshadow their academic knowledge. In these current economic times, education and parents must unite to ensure the financial stability of future generations.

Thanks for reading!