Personal Finance Lessons I Wish I’d Been Taught in School

November 6, 2013
school classroom

One of the things I’ve been very vocal about in the past is how few personal finance lessons are taught in the classroom. I grew up and went to school in Victoria, British Columbia, Canada, where to this day the only required course high school students take that teaches them a little something about personal finance is Planning 10. I’m not knocking Planning 10 but, as the older sister of 17 and 19-year-old siblings, I can tell you it is looked at as a complete throw away course – an elective you have to complete (often by doing the bare minimum, because students are bogged down by “real” homework) in order to graduate. Planning 10 is basically the beginning and the end of financial literacy in B.C. schools and, while I have worked with some of the material and know it’s good information, it’s not good enough.

In July, when I wrote that I wanted to make personal finance cool in school, there was some mixed feedback. Some people agreed and said personal finance principles should be taught and reinforced in the classroom. One mother emailed me and said her 17-year-old daughter was already worried about money and would love to take a course to learn more about it. Others (and this one infuriates me) felt that teenagers don’t care, wouldn’t care, etc. That infuriates me because my experience has taught me that most teenagers just want to be talked to like adults. If we say that they won’t care, wouldn’t listen, etc. then we’re taking away their potential to learn something – something that will help them throughout their entire adult lives. And then there was the employee from one of the big banks who emailed me to say teachers aren’t fit to teach personal finance for various reasons. (I’ll let all of the teachers I know speak to that.)

The fact of the matter is there are things that should be taught, discussed, reinforced and repeated in our classrooms – before teenagers walk out the door and enter the real world – and I think basic personal finance principles are a few of those things. Here are some of the personal finance lessons I wish I’d been taught in school:

1. How to Read a Pay Stub

How many times have your kids – or even your friends – come to you and asked what something meant on a pay stub? What’s the difference between gross vs. net income? What the heck is EI? Why am I paying CPP? Where is my money going? Why? Why? Why? I’m lucky to have parents who actually enjoyed talking about this kind of stuff, but the fact that people still ask me questions like that to this day shows that not everyone does. I wish I was shown some real-life examples in school, and had someone explain not only what I was paying into (CPP, EI, etc.) but why.

2. How to Write a Budget

High school students may not earn a lot of money yet, but that doesn’t mean they should be spending their earnings freely either. I wish I’d been taught about income, fixed expenses, savings, fun money, emergencies, life events, etc. and how every decision I made would affect my monthly budget. A budget doesn’t need to be looked at as a strict, boring plan that students need to follow – it’s a tool that can help open their eyes to how much they earn vs. how much they need/want to spend (and if they need to cut back or earn more) <- that is what I wish I’d been taught in high school.

3. How Much to Save and Why

Most high school students won’t be old enough to open a TFSA, and some may not even generate RRSP contribution room by claiming earned income (getting a job and filing their taxes), but that doesn’t mean they shouldn’t learn about the savings tools that are within arms reach. Think about it this way: usually within a few months of graduating, all of these options become available to them. It’s not like we’d be teaching them something they’d never use! (I could list some of the classes I’ve never used.) I wish I’d been taught more about how much to save in my RRSPs (now TFSAs) in school and why it’s so important.

4. How to Use a Credit Card

Have you ever heard of (or seen) the documentary Maxed Out? Sure, it’s about how too much credit is given out to Americans… but, you know what? Too much credit is given to Canadians too! I just applied for my first rewards credit card and the lender granted me a $15,000 limit (more on that later)! Who needs that much credit!? If I racked that up, it would take me a couple years to pay off. Good for MasterCard, bad for me. And one part of the documentary shows how college students are bombarded with credit card application forms during their first week at school – the exact same time they are stressing about how to pay for school and still live a semi-fun life. I wish I’d been taught how to use credit cards as a tool, and not as a second bank account, when I was in school. (Hearing from people who have racked up/paid off credit card debt would’ve helpful too.)

5. How to Pay for Post-Secondary

When I was in high school, nobody told me that I wouldn’t qualify for student loans. Nobody told me how much tuition/books would add up to over all the years/programs I took. And nobody showed me that my grades were good enough to apply for some scholarships. If I had known that school would cost my parents at least $5K and myself another $15K, I would’ve taken the financial part of it a lot more seriously – especially if I’d known how much money would (or would not) have been coming in, before I started. I wish I’d been given some solid ideas of how to pay for post-secondary (or how long it would take to repay it) before I jumped into it – and I’m sure a lot of Canadians feel the same way.

These are just a few of the things I wish I’d learned in school, and that I think should be part of an entire personal finance course made available to all high school students. We can’t assume students won’t listen and/or won’t retain the information, and it’s also not fair to put 100% of the responsibility on parents. Yes, I think parents should encourage their kids to work hard, earn an income, pay their bills and save for their futures – but teachers and school districts can help too. I know for a fact that some of this information is available in various courses, but it’s strewn about and not taught in a concentrated format; that’s what I think needs to change.

Are there any personal finance lessons you wish you’d been taught in school?

Flickr: ms_sarahbgibson

  • Steve November 6, 2013 at 8:33 am

    I found that story about the bank rep hilarious when you told me about it. I don’t know if I could have shown the same restraint to not publicly oust her if I were in your position!

    I pretty much agree with a lot of what you said. In my opinion, they should revise how math is taught now in high school so that instead of a pure theory approach, they incorporate real life examples as the basis for learning math. Would be a heck of a lot more relevant and engaging than what it is now.

    • Cait November 7, 2013 at 8:16 am

      Couldn’t agree more!

  • Lynsey November 6, 2013 at 8:34 am

    I totally agree with you Cait. What’s really shocking is that where I live (Scotland), there is absolutely nothing provided to high school students at all – not even an minor ‘elective’ class. Some of the larger national banks have schemes to teach students about finance, but this isn’t a national initiative and is restricted to a handful of schools. In my opinion we are just setting a whole lot of people up to fall by not providing them with these basic skills! x

    • Cait November 7, 2013 at 1:28 pm

      I couldn’t agree more, Lynsey, and thanks for sharing what you’ve experienced (or not experienced) in Scotland. I don’t see any reason why we shouldn’t be teaching students at least the very basics of how money works – it’s a universal language, and we all need to understand it!

  • Morgaine November 6, 2013 at 9:36 am

    I can actually consider myself “lucky” that I wasn’t good at theoretical math and decided to take business math in high school instead (now this was before the curriculum changed, we didn’t having Planning 10 then). In this business math course, I learned about investing, personal finance, and doing my taxes. We learned about the deductions on your paystub and RSP deductions (probably would have taught about TFSAs if they were available then). We also had to read David Chilton’s “The Wealthy Barber” were I first learned about paying yourself first and saving at least 10% of your income.

    Funny that if you’re considered to be “good at math” you don’t need to learn practical math skills? Even if you work as a math theorist you might need to know how to budget ;) For my part, I plan on teaching my kids myself because I know how painfully little is taught in school.

    • Cait November 7, 2013 at 1:29 pm

      Business Math!? And you read Chilton!? That sounds freaking sweet!

  • Rob November 6, 2013 at 9:39 am

    “Are there any personal finance lessons you wish you’d been taught in school?”

    Sadly, all of them, Cait. Back in the day, when I was going to school and later university, we received nothing along these lines – not even your Planning 10 course. And to make it more sad, much of what we memorized our butts off to learn (in the courses that we were taught) were of very little or no value when we finally got out into the working world. I sure many of your readers can relate. So it’s not surprising that the state of the economy is what it is today. Basically, those who succeed financially are usually those who are self taught financially or are lucky to be guided by such people so as not to mess up their lives.

    • Cait November 7, 2013 at 10:47 pm

      “So it’s not surprising that the state of the economy is what it is today.” Good point.

      Now, the Planning 10 course has some great information, but it’s not presented in a way that makes it relatable or offers any sense of urgency. I do know that Investor Education Fund works closely w/ a lot of teachers (those who are willing) in Ontario, to bring personal finance into more classrooms there, but there’s still nothing similar in BC. Maybe one day…

  • moneystepper November 6, 2013 at 9:45 am

    I agree that personal finance should form part of the curriculum, but the government effectively decides the cirriculum and the government probably wants people to get into debt and increase consumer spending etc etc.

    The majority of people don’t learn about personal finance until its too late and they have already learned many, many mistakes the hard way!!

    • Cait November 7, 2013 at 10:55 pm

      The government wants people to borrow money, of course, but that doesn’t mean they shouldn’t incorporate some basic lessons into our curriculum. Like how to write cheques and how to file our taxes – don’t they need us to do that too? ;)

  • Deena Dollars November 6, 2013 at 9:45 am

    One thing that I feel I lacked as a teenager was a sense of scale or orders of magnitude when it came to money. I was responsible with my money that I earned at my $8/hour job, so I could budget in the hundreds or even a couple of thousand dollars — but then I was supposed to make decisions about college at 17 when I didn’t really even have a grasp of what those tuition numbers meant. My parents never discussed their own salaries, and so I didn’t really understand what $40,000/year meant. I remember one time seeing a Hummer H2 pull into a parking lot, and realizing that it was the fanciest car I’d ever seen at the time, and that it cost the same as *ONE* year of school at a private university in the U.S. I was like “WAIT, WHAT? COLLEGE IS HOW MUCH MONEY?!”

    I got admitted to my dream school – an Ivy – with no financial aid or scholarships. It would have cost my parents and I the equivalent of 1 Hummer per year for 4 years. Lucky for me, my Dad sat down and explained that if he and Mom were to pay for my college, they’d have to re-mortgage their paid-off house and I’d have a ton of loans. I wasn’t about to put all of us through that, so I chose a lower-ranked school where I got scholarships. I graduated with $0 of debt and a little bit of savings. (My downhill spiral was all after that and unrelated….)

    Anyway, long winded but yes, teach teenagers about money! :)

    • Cait November 7, 2013 at 10:59 pm

      Thank you so much for sharing that, hun! Even though I’m sure it wasn’t easy for them to do, or for you to accept at first, I think it’s smart that your parents explained not only how much school would cost but what it would mean for both them and you. They made it relatable and urgent, which taught you how stressful money (debt) can be. Good lesson.

  • Sarah November 6, 2013 at 10:33 am

    I agree that personal finance is extremely important and should be taught in schools. I was pretty clueless in high school.
    I also wanted to defend a $15000 credit limit. My husband and I recently booked our honeymoon. We will be travelling during Christmas and New Year’s. We spent close to $8000 on airfare alone. This trip was budgeted for, but we bought the tickets online and needed a credit card to pay for it.

    • Cait November 8, 2013 at 6:49 am

      Fair enough. I just think it’s sad that a credit card company is willing to give me – someone who used to max out her cards – $15K.

  • jolie November 6, 2013 at 10:55 am

    I teach this with my middle school students. We learn how to make a budget, how to read a stub, how to write a cheque, what it means to save, and some of the basic differences between forms of credit. Best of all, they learn about ‘interest’. They love those classes and to date I have not had a parent say I was not qualified for this (at least not where I could hear it :-)

    • Cait November 6, 2013 at 11:08 am

      I forgot to add “How to Write a Cheque” – thank you for the reminder! My sister has asked me a few times now, and I know she’ll remember with practice, but that’s another thing that could definitely be taught in school. Way to go, Jolie! :D

  • catherine November 6, 2013 at 10:57 am

    Dude I couldn’t agree with you more. On all of these points. I wish wish wish I’d been taught all of this!! I’d like to think I’d be in a much different spot if I had.

    • Cait November 8, 2013 at 6:50 am

      Exactly!

  • Laura November 6, 2013 at 11:36 am

    My Grade 11 math teacher did a word problem with compound interest and then made a point to talk about the pros of compound interest for only 5 minutes but I will always remember that compound interest=good. Oh, and she also said start young so you get more years to earn compound interest.

    The one thing I wish they taught you about was the CMHC insurance if your down payment for a house is under 20%. The only thing I ever wanted to use my savings for was a down payment on a house and it was stuck in my head that the minimum I would need is a 5% down payment. No one mentioned that you’d be stuck with this extra premium!

    • Cait November 8, 2013 at 6:54 am

      How cool that you still remember that!

      And I couldn’t agree more. I’ve talked to a few people who don’t think kids should learn about mortgages, but my rebuttal is I know lots of kids who don’t want to learn algebra. We can at least try to teach them and hope some kids retain it!

  • Elizabeth November 6, 2013 at 2:06 pm

    My husband teaches 8th grade (14 year olds) and has a really great module where the students draw a “career” (jobs written on slips of paper) out of a hat and then must research how much that job pays, develop a budget based upon their new salary, find and “rent” an apartment, “buy” a car, “pay” utilities, “purchase” food, etc. The students are overwhelmingly sad to realize what kind of life style they can actually afford…unless they were lucky enough to draw “doctor” from the hat, LOL.

    • Cait November 8, 2013 at 6:55 am

      That is so cool! Does he find that his students engage in this task?

      • Elizabeth November 8, 2013 at 4:05 pm

        His students LOVE this module and many of them comment that it was their favorite lesson. The thing is, this practical exercise opens their eyes to the realities of career choices. It might sound cool to be a dog groomer, but when the true cost of living is revealed, it’s often pretty shocking! We live in a small enough town that students come back years later and say, wow, thanks, this really helped me think through my options. I feel proud of my husband for coming up with this idea!

        • Cait November 9, 2013 at 7:46 am

          I hope he knows he’s making a difference. :)

  • Beth November 6, 2013 at 4:43 pm

    Sadly, I understand where the bank person was coming from saying that teachers can’t teach personal finance. In Ontario, they have a ton of benefits and an exceptional pension plan. I’ve heard from people who work in banks that teachers are the most clueless professional group when it comes to managing money.

    As a former teacher, here are my thoughts: First, I’d wager there are financially clueless people in every profession. Teaching is a very public profession, so I imagine the bad examples tend to stand out.

    Second, not all teachers are qualified to teach phys. ed. Or art. Or science. You find the teachers that have the expertise and put them to work. Same goes for personal finance.

    Third, teachers don’t have to teach personal finance if they aren’t qualified. Knowledgeable volunteers from Junior Achievement did classes on investing and stock markets when I was in grade 7/8. People who have experience can find opportunities to share it.

    • Cait November 8, 2013 at 7:04 am

      I will agree w/ the sentiment that not all teachers are qualified to teach every subject. But good teachers will teach what they know and find answers to the things they don’t. I have a feeling there’s at least one teacher in every school who would be interested in teaching / learning more about personal finance with their students.

  • FI Pilgrim November 6, 2013 at 6:59 pm

    Cait, I’m actually posting on the opposite tomorrow– financial lessons I remember from my dad. I agree with you that these topics should be taught in school, but since I was home-schooled I was fortunate in that way I guess. :-)

    • Cait November 8, 2013 at 7:05 am

      I’ve written that post before :) look forward to reading yours!

  • Cassie November 6, 2013 at 8:36 pm

    Every single one of the points you’ve listed are perfect, along with how to write a cheque and balance a cheque book. Another one I’d add is how to fill out a basic tax return. I know so many people who pay to have someone to do it for them, when a basic form isn’t really all that difficult. Not only do you save yourself money, you’ll get a better understanding of how taxes affect increases in your income. That and by doing it yourself, you can see the lines for potential tax deductions rather than depending on someone to ask you if they’re applicable.

    • Cait November 8, 2013 at 7:25 am

      I’ve never needed to balance a cheque book, but writing cheques and filing taxes are a couple extra lessons that should be added to this imaginary class I keep talking about, haha. My sister has definitely asked me how to write a cheque a couple times before, and I have still only filed my taxes electronically – never by hand – so I definitely see a need for both of those lessons.

  • kelly @stayingonbudget November 7, 2013 at 4:25 am

    Yeah, I saw Maxed Out and then wondered what happened to the real estate agent in Vegas.
    These are great things people should learn early!

    • Cait November 8, 2013 at 7:28 am

      Did you ever search and see if you could find out!?

  • dojo November 7, 2013 at 5:16 am

    Most young adults didn’t get this kind of education at home or in school and we now see what this leads to. Sure, these would all be GREAT things to teach our youngsters, at least the generation after us to be better prepared for this world. And yet they lose time with a lot of crap ‘knowledge’ and enter adulthood without being prepared.

    • Cait November 8, 2013 at 7:30 am

      Time to change that then, eh?

  • sierra November 7, 2013 at 6:42 am

    I went to high school in Manitoba and I had a class called Applied Maths. It was kind of the middle-range for students (not pre-calculus, but not the remedial math class).

    Our teacher was great (there were only 15 of in the classroom! everyone chose to the ‘higher level of math’). We learned how to write a cheque, how to budget, what EI/CPP were, how to save money with automatic withdrawals, how much to actually earn (gross vs net) – he was a great teacher.

    Most of the students looked down on us for taking this class since it was considered a lower level of math (not a pre-university course). BUT! We learned great things and I didn’t look like an idiot in first year university where I actually had to help people write a cheque for their first time in their life.

    • Cait November 8, 2013 at 7:31 am

      That sounds like an awesome class, Sierra! And a great teacher. Also, isn’t it great when someone teaches you something practical that you can then teach to someone else!? :)

  • Amy November 7, 2013 at 2:30 pm

    I also went to high school in Victoria! I was in a class called “scholarship explorations” that taught us how to apply for scholarships and where to get money for post-secondary… however I treated the class like a total throw-away (as did all the students) and didn’t get a single scholarship out of it. What would have been more helpful was education on how to apply for student loans. Now that I made it through nine years of school, a Bachelors and a Masters degree, I am the go-to source for info on student loan applications for everyone I know. What would be great though, is if this information is common knowledge. I figured it out by trial and error (and living off credit cards at the end of my Masters…) which isn’t how one should be going about their finances.

    • Cait November 8, 2013 at 7:34 am

      Yes! I remember applying for student loans online years ago and the result just saying that I didn’t qualify. That was it. I was done. But then I watched so many of my friends and peers apply, get lost on what to do in the waiting process, and then have no idea what it would mean to repay them. There could be an entire course on student loans.

  • KaseyM November 8, 2013 at 1:47 am

    I had a great economics teacher in high school. The content was great and there were real world skills like pay stub ready, college and family budgets etc… We even did the whole baby for a week things. But sadly most students didn’t take it seriously. I’m glad i learned the skills as it didn’t help me stay out of debt, but is is making the road to repayment a heck of a lot easier. i agree it is super important and not given enough weight in school.

    • Cait November 8, 2013 at 7:36 am

      Sounds like you had a good teacher, nonetheless! It’s nice to hear about people who are trying to promote financial literacy to their students. (And the baby thing would’ve been funny!)

  • Celeena November 8, 2013 at 9:20 am

    Cait,

    I read this article and couldn’t agree with you more!
    I feel that this simple things are life necessities that are not taught in high school, but should be.

    Simply budget management and opportunity cost should be implemented in the school system. I didn’t have the financial help from my parents and had to turn to Student loans to get me through to College. Once I was in a place to start paying back my student loans I didn’t fully understand why my payments (minimum payments) didn’t really eat away at the principal balance, which is when I really learnt about interest. I educating myself about student loans and how they are designed to keep students in debt for up to 9 years, which I was not having especially since I was set to go to University afterwards. I managed to successfully pay off my student loans for College and budgeted and paid for University myself (so I avoided throwing away extra money away on interest & banked that money in a TFSA).

    Thank you for a great article.

    Celeena

    • Cait November 8, 2013 at 11:12 am

      Can you imagine how students would feel if we showed them what it would cost in interest to repay student loans over the suggested 10 years? I wonder if it would stop some kids from going to school – at least until they really, really knew what they wanted to take.

  • Kanwal Sarai @ Simply Investing November 9, 2013 at 12:38 pm

    Hi Cait,

    You forgot one: “How to invest your money”

    I wish that was taught in high-school or college, I would’ve retired by now!
    :)

    cheers,
    Kanwal

  • Kyle @ Young and Thrifty November 10, 2013 at 4:58 pm

    Preach it sister! I happen to know a guy that wrote a book with a lot of that stuff in it… he’s actually a teacher too ;)

    In all seriousness though you know what a huge advocate I am of PF in schools. I’ve even collected a few sample curricula and made my own for a single course. The resistance to this idea by administration really baffles me.

    There is a lot of truth to the “teachers are really bad at PF” camp, but then again I know a lot of financial advisers who give terrible advice to their clients as well. The first step would be allowing students to use economics as a “teachable” in order to get into teacher education programs. For current teachers there are so many workshops offered every year, simply rounding up a few like-minded folks and getting after it shouldn’t be that hard in most provinces.

  • Aussa Lorens November 11, 2013 at 8:45 am

    Oh my gosh, seriously! Why isn’t this stuff taught in schools? My coworker and I once stayed HOURS after work to try and decipher our paystubs. I’m in the states and it is just as bad, if not worse– I don’t think we have a “Planning” class at all.

    There is so much about money that I wish I had known just a few years ago… like the fact that I will be paying on my student loans until my own (future, theoretical) children enter the workforce.

  • My Own Advisor November 12, 2013 at 4:49 pm

    Great post Cait. I had the same thought a lil’ while back:
    http://www.myownadvisor.ca/2013/09/wish-stock-school-system/

    I had to chuckle when I read the idea about the paystub, but you know what, most people could benefit a bit from that :)

    Mark

  • Shoeaholicnomore February 18, 2014 at 7:50 am

    This is a great post! I agree with alot of these points and I wish that it had been taught to me in HS here in the US also. Thanks for sharing!