Personal Finance Should Be Taught in Schools

The following is a guest post from Rich Pulvino as part of ongoing #EduReform project

Will Generation Y ever retire? What about the generations that follow? Financial security used to seem like a guarantee for older generations, but that’s been replaced by a looming question mark. With depleting pensions, and 401(k)s proving to not be the sustaining alternative they were believed to be, retirement for younger generations seems to almost be a pipedream. By helping students with personal finance, we can prepare them to enter into a world knowing how to find the right credit card deals, manage debt, save money, and invest properly. It’s not the most exciting topic, and, it doesn’t exactly inspire creativity or expand the mind. But, it is a necessity that is entrenched in all of our lives.

Debt and unemployment are two of the biggest problems facing the younger generations. And, if that pile of debt doesn’t seem scary enough, add the threat of an education bubble heading our way. These are scary realities. But, with the proper education, students can be forewarned about these dangers before heading off to college and signing over their lives to the banks, or the federal government.

College debt can be classified as “good debt” because you’re investing in your future. However, that “good debt” isn’t so good when it climbs into the $60,000, $80,000, or $100,000 ranges for degrees that don’t pay well out of college. It basically becomes a mortgage on your future. By learning about the financial aid and repayment processes, students can become savvier and cautious about the amount they take out in loans and the options they have when it comes time to pay.

All of this debt has contributed to many futures becoming financially unstable. Pensions and 401(k)s help, but they are heading towards becoming endangered species in this country. Fortunately, there are other options, but saving strategies and investing take a great deal of time, discipline, and can be downright confusing. Providing students with a head start in high school can show them what the future looks like and how they can combat the confusion they may feel when it comes time to graduate.

Senior year of high school—while students are deciding on where to attend college and filling out their FAFSA forms—would be the most appropriate time to hold these classes/seminars. The best part is that this education doesn’t need to take place in the schools. Parents can sit down with their kids and teach it, and a lot of the information can be looked up online. Even though this is the case, too many students are still shocked by the amount of debt they owe and how long it takes to pay it off.

It’s time for school systems—and even colleges and universities—to prepare the incoming classes for what’s in store for them. The future cannot afford to be held back by mountains of debt, and students need to be aware that piling up loans in order to finance an education does not promise them success in the years ahead.

Rich Pulvino is a public relations account coordinator for an integrated marketing communications agency in Rochester, NY. Even though he has not worked in education, he comes from a family of teachers and has always had a invested interest in the system. When not working, he pursues his two biggest passions–music and writing–by contributing to the indie music blog, Tympanogram. You can connect with Rich on Twitter (@rpulvino) and LinkedIn.

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  • Kalen

    Very true. However, first we need to teach it to adults who didn’t learn it when they were in school themselves. Most adults are just as clueless with their money as kids are.

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  • Rich, fantastic article. You hit on some good points. However, in my opinion, student loan debt is definitely bad debt. I understand the logic behind the good debt argument.

    Typically, you would say that you’re getting a return on your money with good debt…as opposed to sunk costs like a car loan…which gives you no return. That said, you are still trading your time for money when you go and get a job. Many people don’t pay those loans off for years. And depending on what you major in, you’re lucky to even FIND a job.

    Also, I tend to believe it’s better for universities NOT to teach personal finance. Heck, if they did, students may finally realize they’re getting ripped off.

    Kidding aside, personal finance absolutely should be taught from a very young age through the rest of a person’s like via self-education. It’s too important.

    (Check out my site @ http://www.FinancialBin.com)

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