Ask HN: Why isn’t finance a part of the core curriculum at schools?

[JacKTrocinskI]

I think that in today’s world financial literacy is more important than ever to financial success in life and yet it seems like many kids graduating high school are financially illiterate. In my opinion everyone should a fundamental understanding of how a savings account, CD account, IRA, Roth IRA, 401(k) and MSA account work. Likewise, everyone should have a fundamental understanding of the equity markets, derivatives markets, futures markets, bond and treasury markets along with an understanding of how interest rates work and their effects on financial instruments like mortgages. Kids should be taught about the various forms of business structures available to them from starting a simple DBA to the numerous flavors of corporations out there. All this can be taught without giving financial advice, which may be more in the domain of parents, but by focusing on the theoretical and historical aspects of financial instruments so that kids have a better understanding of how they work and are better prepared for life in general.

[Broken_Hippo]

We got taught about basic finance. It was poor: The teacher had a friend from a care dealership come in to teach us some things. I was 13.

But more importantly: What a wide swath of folks need is how to survive poverty. So many people never get to the point of even considering a CD or IRA. Most folks only really need the bank account for paying things. 401(k) simply because that's what is offered by the employer, and you have to get paid enough to really use it. Sometimes $5 today really is more important than $10 when you retire since it means food to make it to retirement. MSA is similar: You need the extra money. No point in a MSA if you can't afford insurance anyway.

If you can't teach how to afford poverty, the rest is useless and completely tone deaf.

Likewise, most folks aren't going to open a business and many won't invest in markets.

Realistically, what we need are online resources in plain, simple english that explains these things and/or classes that are mandatory for folks starting businesses. The younger the person, the more likely the person is to be pretty good at consuming information on the internet. Just make sure folks know where to go to get good information.

[bartaxyz]

I studied in Czech Republic and we had entire class spanning out over two years for economic and financial literacy at my high school. On the practical level, we were even tasked to fill out tax returns for a fictional company and we learned how to start freelancing & start a company. It was a high school in a rather small town on the south of Czech Republic, nothing special. I don't know how common this is in the rest of the country, but I remember that I and some of my classmates were leaving high school with income from freelancing already. There are very few people I know that didn't have a source of income when they finished high school.

[stjohnswarts]

I grew up in a small down here in the USA. For a few years we had a retired accountant come in and teach (as one of our elective courses) business accounting, stocks, and personal finances. From what I understand he did it for a relatively reduced fee (paid as a substitute teacher). I took the course one year and it was successful for three years and was a pretty good foundation and has been very useful since. Some parents complained about it tirelessly as a waste of time and that students should be learning shop class and advanced math (that they most likely would never use). Eventually the guy got tired of fighting and quit teaching it and they never replaced him.

[petr25102018]

Also Czech. I don't think this is common in here at all. You were lucky with your school.

[anonymousDan]

What were you freelancing as at that age out of interest? Did everyone in the class have to come up with their own idea for a freelancing business?

[inglor_cz]

Also Czech and we did not even touch economic and financial literacy. As if it was considered completely outside scope of schooling.

[sam_lowry_]

What was that small town, Brno? Now known as RedHat european HQ location?

[johnnycerberus]

Milk and honey in Czech Republic. I grew up in Ukraine and Romania and to be fair nobody earned any money after informatics high-school, we had to finish university and leave our families for UK and USA to earn a good income. My group of friends knew that if we stayed in Europe we will end up mostly on outsourced projects. Didn't know Czechia is an incubator of Rockefellers.

[aliassmith]

Every recommendation to add "x" to a school curriculum should state explicitly what alternative activity should be cut to free up time. This could be another subject, sleep or childrens' free time.

For example, a better question would be "Why don't we eliminate <high-school-biology> and teach finance instead?"

[forinti]

You could teach it as part of maths.

I think there's too much algebra in secondary school (and not enough of it in college).

Few people are gonna miss matrix multiplication after school.

[giantg2]

Secondary education typically includes some elective classes or even study hall periods. These suggested classes can even be a single semester, and may already be offered as electives. In fact, I took a 1 semester personal finance class in high school.

I strongly support adding personal finance and logic (philosophy of arguement) courses to the core curriculum.

[Retric]

I would suggest replacing a chunk of geometry. Teaching students the names of the Platonic solid’s for example is seemingly vastly less useful than basic financial literacy. As a math class you can cover plenty of useful ideas like risk assessment at the same time.

Alternatively, I would drop things to 3 years of English to add a year of Home Economics that covered basic cooking, practical nutrition, taxes, personal finances including insurance, and saving for retirement. All I can recall from mine was a few weeks we learned how to fill out a check and sew a pillow.

[lvturner]

In the UK we had 'personal social development' classes during high school.

We could have at least spent some of that time learning about finance.

I'm also pretty sure a lot of my courses, could have been truncated to allow extra time for another class - I don't see why it has to be so binary.

[PurpleFoxy]

We could eliminate religion classes from schools

[loftyal]

I feel high school should be a year longer IMO. Life expectancy has grown, but number of years in secondary education hasn't.

[tracer4201]

I don’t think we have to decide between one and the other. For example, you can combine some topics together. A math class can teach math but instead of arbitrary equations with no practical application, you can connect the subject with a finance topic or economics topic. This gives you a mechanism to ensure students intuitively understand a concept as opposed to simply regurgitating memorized equations that they’ll forget after the exam.

[mellosouls]

everyone should a fundamental understanding of how a savings account, CD account, IRA, Roth IRA, 401(k) and MSA account work. Likewise, everyone should have a fundamental understanding of the equity markets, derivatives markets, futures markets, bond and treasury markets along with an understanding of how interest rates work and their effects on financial instruments like mortgages.

How much money do you think most people have? Half this stuff is completely irrelevant to average workers who don't have income to invest in variety or depth.

Sure, basic financial responsibility and options should be core, or near, but beyond that a detailed dive is going to supplant some other core educational area for no obviously good reason.

[op03]

If you ever teach a group of kids you quickly learn that interests, personality types, needs come in a wide spectrum. Whats in the "core curriculum" and its effects are not predictable.

For example, I had French classes for 4 years and can't speak, read or write it to save my life. The teacher wasn't bad and kept telling me, who knows maybe one day I'd move to France. As a kid, I thought the whole thing was ridiculous. I was quite happy where I was.

Better option is to give ppl, at any point in their life, a route to learning when they discover a knowledge gap.

As did happen when I was sent off for work in France.

[HenryBemis]

Dave Ramsey (not connected in any way - just like his message), can be a bit 'over the top' sometimes, but in his daily radio show you can listen some (financial mismanagement) horror stories. He has a "7 baby steps process" that I believe everyone should know (and adapt to his/her will/preferences/life setup). Yes is a fanatic christian, yes, he can be a bit tiring when he takes a religious tangent, but still, I find his message very useful. I would really liked to have discovered him 20-30 years ago (or whoever was the Dave Ramsey at that time).

I really appreciated/found really helpful the tip of the "seven bank accounts" (Jordan Page, FunCheapOrFree)(also not connected in any way): https://www.youtube.com/watch?v=auzLhKvsxnQ

(Ramsey a similar type of management the "envelope system").

Edit: from what he sometimes says on his radio show, some schools in the USA 'teach' his program/system/7-step-process. I find this amazing and I wish that this (or something similar) is properly taught to every school on the planet.

[jokethrowaway]

I was forced to study Latin for 5 years - and that was in a Computer Science oriented high school.

Nobody yet sent me back in time.

[pfranz]

Like you, most people I know took many years of a foreign language and can speak little if any of it. But I'm curious if that's even the goal of it?

When I took ASL I remember them saying the reason ASL was accepted as a foreign language was because it has a culture that was taught along with it. It may or may not be taken seriously when taught, but a lot of people grow up in a bubble and don't get exposed to other cultures.

I've lived with a bunch of people that were fluent in English, but it wasn't their first language and others who were English native but studied foreign languages more seriously. Learning another language makes you think more about your own language. One friend said her teacher gave her a basics of English book early on when studying Japanese.

[cultus]

In America at least, foreign languages are taught in high school and college. This really hurts retention of language skills. Humans are far better at language acquisition as small children, but our educational system refuses to take this fact into account.

[Jach]

It is. When I was in high school over a decade ago, I did take a required financial literacy class. Required by the state. So yes, students do learn about savings accounts, CD accounts, IRA, Roth IRA. They learn about stocks, mortgages. Various other things (like tax returns by hand). I don't think equity/derivatives/futures/bonds were covered. Another class I took that was an elective (so not required, but available) -- and possibly took it at 9th or 10th grade -- was on business stuff including how to actually go and start your own business, different types of businesses, etc.

Even suppose you make students take a second financial literacy course, at the expense of letting them study what they want (electives), it's not going to help. Despite all the core curriculum that already exists, just because you're forced to take a class does not mean you're going to learn its material. Maybe find a better way to solve your grand social engineering problem, because "more education" isn't it, and disrupts a lot of students from actually achieving a good education because they're forced to deal with required core BS aimed at the lowest common denominator.

[GuB-42]

Generally, school doesn't teach practical things, it teaches the fundamentals for learning practical things later.

Finance by itself is not that complicated. If you know the underlying maths, that's the kind of thing you can learn on the spot, at least on a basic level. If you want more than that, you probably should hire an accountant, or it becomes specialized studies.

For the rest, I don't know what kids learn in the US but I guess things like the great depression are part of the history lessons. Do they teach that without any insight about the economics of it?

So there you have it, you know the stock market and taxes exist from history lessons and you learn the mathematical operations to run the numbers. I don't remember learning about the legal aspect of finance (which may be the most important of all), but we certainly had on overview on how the legal system works.

[nickff]

>"Generally, school doesn't teach practical things, it teaches the fundamentals for learning practical things later."

This is a common belief, but it unfortunately doesn't work that way. "Transfer of learning" as it is known in educational psychology, (similar to 'learning how to learn',) is basically a failure. People have been studying it for over 50 years, and it turns out that students are very bad at taking things they learn in one class, and applying it in another.[1]

[1] https://en.wikipedia.org/wiki/The_Case_Against_Education

[stretchwithme]

I would be happier if kids learned fundamental principles, like the law of supply and demand, rather than some interpretation of historical events.

If history is going to be discussed, it should be more just one view. The Great Depression, for example, is often described as a failure of economic freedom, rather than the failure of the government's myriad interventions.

Knowing only ONE side of the story doesn't necessarily leave kids better prepared to learn, unless it's essentially true (good luck reaching that consensus).

[nostrademons]

There are fundamentals of finance, too, though. You should know how supply & demand work, how markets work, how interest rates work, how profit & loss work, and how different capital structures (stocks, bonds, etc.) allocate profits to different people.

I don't think it's important for kids to learn about specific financial products like savings accounts, CDs, different categories of stocks, etc. That all changes by the time they get into the working world anyway. But just knowing how debt & compound interest works would save many young adults from mistakes that cost them decades of their life.

[vulcan01]

> you know the stock market and taxes exist from history lessons and you learn the mathematical operations to run the numbers.

And most schools have a government class, where you learn why taxes exist and how they've changed over time. This class is generally also where you learn about the legal system.

[cateye]

<tin foil hat mode:on>

Schools are mainly about supplying cheap workforce for existing companies.

Learning things like starting your own company or managing money in a way that increases negotiation power of the workers, is a disadvantage for companies.

<tin foil hat mode:off>

Having financial knowledge is also not always a direct requirement to get the job at a company, so actually it doesn't provide a direct competitive advantage if you are in the job seeker pool.

These 2 factors create maybe the equilibrium of the current composition of the curriculum.

[eeZah7Ux]

> Schools are mainly about supplying cheap workforce for existing companies.

This is historically true and well documented. There is no tin foil hat here.

> Learning things like starting your own company or managing money in a way that increases negotiation power of the workers, is a disadvantage for companies.

Also historically true. For centuries the education of aristocrats was focused on producing leaders and everybody else was trained to become a worker.

In many countries schooling is still very authoritarian...

[hacker_9]

This is the reasoning behind the book Poor Dad Rich Dad, which to be fair makes quite a few good points about this stuff, and says you are left to your own devices because it isn't advantageous for govt, companies etc for you to be educated in these things. Good book to start off your 'financial intelligence' as Kiyosaki puts it. I particularly like how it is themed around the idea 'the rich don't work for money', and so the middle class bear much of the burden of the modern world.

[vladvasiliu]

That may be the case for universities or other institutions which are the last step before entering "active life".

However, up until high school, there are a bunch of subjects that are taught purely for the benefit of the students. I'm thinking about sports / physical education, geography, history, etc. I didn't use anything I learned in those during university and none of the job interviews I've been through touched on those either.

[apatters]

My public high school in the 90s had a mandatory personal finance class. This stuff existed.

It got cut from the curriculum at some point over the years along with art, music, civics, wood shop, gym, and all the rest.

The question is where has all the money gone? Not sure about K12, but at the college level it's very clear, it's all gone to the administrative bureaucracies, with less going to the actual faculty and educational programs.

[quanticle]

You could ask the same question about civics, or science, or shop class, or any one of the other subjects that schools have cut in order to more effectively teach to standardized tests. Most education these days is about meeting No Child Left Behind/Common Core standards, and since those standards primarily specify reading and math, well, that's what gets taught.

School isn't about preparing children with the skills necessary to navigate the modern world. School is about teaching reading and math. The steelman version is that reading and math are fundamental, and the other skills can be learned independently if the child has the necessary literacy and mathematical background. In practice, though, that doesn't happen.

[roenxi]

Two reasons:

1) Financial rules are legal constructs - so not really suitable for academics. An academic syllabus might claim "Roth IRA implies X" then the law changes and it is no longer true.

2) The schools would be opening themselves up to legal liability if they accidental offer financial advice that goes bad (eg, invest in shares -> first time in history share market collapse -> angry people blame school).

No conspiracy, they just can't teach a moving target and the liability issues are - when you think through them - enough to be very troubling.

[jay_kyburz]

I don't think the problem is people not understanding tools for managing money, I think people have a vastly different ideas about what money _is_ and what its _for_.

This is largely an ethical / moral / social issue. (not sure the correct word).

I've been thinking about it a bit lately because I have 2 young kids at home just starting to earn pocket money. For them money is to spend on treats. Sometimes I can convince them to save up for something larger, but fundamentally it's something for them to spend.

It's not until later in life, when you start selling your time that some people start to see money a little differently. No "treats" are really worth that time you invested earning the money to buy them. Money is not for spending on treats, it's for surviving. (and every cent counts.) Food, shelter, clothing, tools, then as little as possible on entertainment / culture / travel.

Then even later, when you have children, you start to realize that when you spend money, you are not only selling your time, but also the time of your children, because if you can just put enough away for them to start life without debt, they'll have to sell a hell of a lot less of their time to just survive.

err, but the point I was trying to make was that not many people are taught that money is not for spending on treats, but I don't thin that's something that you can be taught in school, (would even agree with).

[watwut]

Then again, I used to save up for something larger and my kids tend to save up for something larger too.

[Lammy]

From a USA perspective? Universal financial education might make people realize that our explicit racial segregation became implicit economic segregation after the civil rights laws of the 1960s. California isn't expensive by accident :/

[hermitcrab]

In my ~15 year education in the UK I don't think I ever learned a single thing about how the UK government or the EU works. And I am sure I am not unique in this. I had to pick all that up from TV, articles etc. This might go some way to explaining the total political mess the UK is in now.

Sure it is interesting to learn about the Romans and the Vikings. But we could easily cut out 50% of that and replace it with learning about how the government works. Or maybe the people designing the curriculum would rather keep us in the dark?

[jackcosgrove]

I think to an extent financial education suffers from the same problem as CS education: it's hard to find teachers because those who understand the content can make much more money as practicing professionals than as teachers. It's really a shame because those two sets of skills are very important. Most of my self-learning has been in these topics, to fill in the gaps left by my formal education.

[triceratops]

If I was a conspiracy theorist, I'd say that the moneyed class doesn't want everyone to understand money and finance. People uneducated about marginal tax rates are more likely to vote down tax increases, turn down raises because they'll "go up a tax bracket", and not try to change the difference between tax rates on earned and unearned income. People who don't understand retirement savings are less likely to meet their 401k match, or ask awkward questions about why the 401k/IRA/Roth/pension system is so confusing and convoluted, and so geared towards earning financial institutions fees. People who don't understand monetary policy, deficits, and fractional reserve banking won't make a fuss over QE or have an opinion on interest rates, and can easily be manipulated with cries of "OMG deficits! Irresponsible government!". People who don't understand debt and cash flow will make shortsighted decisions like financing expensive vehicles or taking out payday loans. All of this is beneficial to capital owners (yours truly included).

Using Hanlon's razor though, it's more likely that educators themselves don't understand this stuff so don't consider it important to teach. Most parents don't understand either, so they don't demand that it be taught. And those few parents who do understand its importance just teach their kids by themselves.

[egberts1]

We called it “home economics”, which went the way of the dinosaurs with gun safety training, auto shop, wood shop, Metal shop, and welding shop.

I wonder what changed. :-/

[lordnacho]

I think it's important as well, but I'm not sure it belongs in a school.

The thing school needs to give you is the ability to learn on your own. In order to do that, you need to know the basics of reading and writing, the basics of math, and the basic theory of knowledge. That last one is sorely missing, but that's another story.

You then want a superficial survey of everything humans know. Of course it cannot be anything but superficial, there isn't time after you know how to read, write essays, and solve some differential equations. In the end you're going to focus on the same old things that everyone thinks are important: a bit world/national history/lit, a bit of the headline sciences (phys/chem/bio), and a bit of foreign language and culture.

At best you will end up mentioning the following in passing: economics, psychology, cooking, citizenship, health, the law, and so on.

But yeah someone ought to mention that there are worthwhile fields of study that you'll have to learn on your own.

[tcbasche]

I would argue that most people in life will never even go near the stock market let alone be expected to learn all those different bits and pieces.

How would that help the average high school graduate?

[benlumen]

We’re not taught about money in the UK, either. At least we weren’t when I was at school.

What a difference it would make in the land of payday loans, cheap car credit, buy-to-let mortgages and betting shops.