Money Management Topics To Teach Students
10 Topics of Money Management High Schools Should Teach
For some time, I’ve had a great concern that our school systems are failing to see the necessity of teaching students personal money management. In a country such as the United States, this is an absolute disgrace.
Students graduate from high school and many haven’t a clue about important money matters, as evidenced by their bad financial decisions. We can’t rely on parents to teach these concepts either, since many of them haven’t learned or practiced good basic money management. Teaching personal finance must begin in the early grades and progress through high school so that the students will be prepared when they enter college.
This is one of the most important topics every graduating high school student must learn. Granted, with their limited resources and responsibilities they wouldn’t have much use for a budget. However, they need to be taught the importance of a budget and how to set one up with personal money management software so that they will be able to take control of their spending. Maybe if our generation had been taught this important topic, our country wouldn’t have seventeen trillion in debt. Something to be said about good money management.
Loans & Borrowing
Another hot topic that every student must understand. For many, their first exposure is in college when student loans enter the picture. They need to be taught about borrowing in high school, including interest rates, and the repercussions that occur if loans aren’t repaid on time.
Using Credit Cards
In conjunction with the topic of borrowing, proper use of credit cards is crucial. Many students see how easy and exciting it can be to buy things now and pay for them later. Then when their card is maxed out and they have no funds to pay, the endless cycle begins. They pay the required minimum payment that covers the interest and this goes on for years.
Good Credit Score
This is one of the most important concepts of money management that must be learned early. Maintaining a good credit score will have an effect on most aspects of your financial life. It determines the loans & credit cards you can obtain; the interest rate you pay; and even a job. It’s easy to have your credit score fall but very difficult to get it back up.
In most math courses, interest is discussed in a general way, but very seldom in ways that affect someone in a real life circumstances. The student needs to see how this factor can influence borrowing and also how paying high interest is a waste of money, especially in non-deductible credit card interest. Basic money management would cover this topic very well.
This is the dreaded “D” word and a concept that the student must master so that they may avoid this trap. With college tuition so high, and corresponding student loans increasing, it’s very easy to accumulate high debt that can plague you for many years, and for some, a lifetime. Having high debt also can be detrimental to a credit score and future borrowing.
This topic is seldom if ever expanded upon in high school. Most students are aware that auto insurance is required for their cars, but it’s doubtful if they really understand what it covers and to what degree. Probably some adults lack that expertise as well. Students need to understand the other types of insurance, and how to shop for it. Some programs like Quicken will help to track this as well.
Saving for Retirement
High school students at their young age will not be thinking too seriously of retirement. However, it’s so important that they understand the concept and how a small monthly investment can grow into a sizable nest egg for their retirement years. This is a part of the problem today where many individuals simply don’t have the resources to retire. They were never taught in their high school years to save for retirement. We could correct this problem significantly by teaching the current high school students.
Stocks, Bonds & Investments
This topic is covered to some degree by schools, but it should be a part of the curriculum. Students need to learn how money can grow by wise investment decisions.
Last, but not least, is taxes that has an impact on all of our lives. Students hear adults complain about taxes of all kinds, and perhaps don’t fully understand why taxes are assessed or how they are used. When they get their first job, they see social security, federal, and state taxes coming out before they see one dime. Learning why will help them to better understand the concept of how to manage your money and how to budget your money more effectively.
There are some states that have introduced courses in money management to some degree. However, there must be a concentrated effort for every state to require it, and have a structured course in their curriculum. Until this happens, we will continue to have this problem with money mismanagement. Some alternatives are online money management courses that can be very helpful.
Gust Lenglet is the CEO of HBS Financial Group, Ltd., an accounting & tax preparation firm in Maryland. He has more than 25 years of experience in the banking and financial industry. Gust started his career as a loan officer at a major national bank, and then moved on to become controller of a major law firm. In recent years, he has written many financial articles that have been published on Ezine Articles and many websites.