Of the founding principles of Weakonomics, the lack of personal finance education in the populous is likely the most important. Weakon 119 is not an intro to personal finance, its an exploration of why there is no personal finance education. Few of us are motivated by personal finance until tragedy strikes. Its why most PF bloggers all have a ’story’ and most readers have going through a similar situation. We are all content to make bad decisions until it catches up with us. The same thing happens in other aspects of life, look at medical care. Fat people continue their lifestyle choices until they end up in the hospital.

Like promoting a healthy lifestyle, the key to personal finance education is motivation. In days past, children grew up knowing they would work from their teens until death. Often times 6 days a week. They made a financial contribution to the family money pot at a young age and it was needed. Motivation. Baby boomers grew up during the Cold War, where the focus was on education. They were the first to make that ‘jump’ from child to adult almost overnight. Money was not the primary focus of their teenage years, naturally the boomers are the first generation to have issues with spending. The problem has progressed over several decades, and worsened as we stay in school longer. Its not uncommon to continue to rely on one’s parents for financial support up into the mid/late 20’s without ever making a contribution to the family pool. Where’s the motivation?

What we have now is a population going the better part of a quarter-century without understanding the value of a dollar. We can’t expect people to make the jump from school to work smoothly, our brains don’t work that way. There is little that can be done to smoothen the transition from school to career. But isn’t the whole idea of school to prepare us for the real world? Why is it that I went through public school and a 4-year university without being forced to take one finance class? All together I took at least 10 Spanish courses, 8 of them required. Can’t do much but say “hello” and “good-bye” after all that too (don’t tell my dad, a Spanish professor). My high school never offered a personal finance course, much less required it. College had one, but it was not required.

So we have a problem: There’s no motivation around personal finance until some kind of tragedy, and there’s only a handful of schools requiring a personal finance course. School has to be the place that creates this motivation. Its the only option, and it should be in the schools. I’ve talked about teaching personal finance on the high school level, its easy stuff: The basics, retirement plans, loans, income taxes and budgeting. No offense to art but personal finance is something we will all use in the real world. I’d love to sit down with any education administrator and have them explain to me how excluding personal finance from the curriculum makes someone a well rounded individual. This goes against everything school is supposed to prepare you for! What’s the point of school? To prepare you to get a job. What’s the point of having a job? To make money!!! Why aren’t you teaching me how to use this money?

The argument for personal finance education in schools is easy, creating motivation may be more difficult. Or is it? The concept of a million dollars is foreign to most high school students. But what if on the first day of class the teacher tells me “If you put $25 under your bed every week from now until you’re 65, you’ll have $141,000. Does that motivate you to save $25 a week?”. That would have been enough for me. Of course then the teacher would say “What if I told you to give me $25 a week until you’re 65 and then I’ll give you over $1,000,000 back? Which option would you pick, me or your bed?” There’s your motivation and your introduction to compounding interest.

Everyone is motivated by different things. However the opportunity for easy money is a universal language. Of course I was never motivated to learn about art, but I learned and know a thing or two. If most people can pick up on a few personal finance concepts, I’ll be happy. If you’re a parent, talk to your school about personal finance classes. If you’re like me and not a parent, just try and motivate the people around you to learn about personal finance.

Related posts:

1. Weakon 149: Financial Licenses and Certifications
2. Weakon 115: Financial Industry
3. What is Weakonomics?
4. Weakon 201: Personal Finance
5. Working with Teens: Teaching Personal Finance on a High School Level

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