Personal finance bloggers can be pretty predictable sometimes.
We all tend to have similar thoughts on investing for retirement (great!), emergency funds (also great!), frugality (ditto!), minimalism (ZOMG!), dividends (!!!!!), side hustles (literally dies!), and so on.
There’s some logic to this, of course. More money is better than less money, and all of those things tend to lead to more money. That’s the whole point of this. We all want to end up a little richer than yesterday.
One other thing it seems most personal finance bloggers agree on is financial literacy. If only we taught personal finance in school, the refrain goes, then we’d have a generation of savers instead of spenders. Credit card debt would go down. Savings would go up. Cute puppies would be saved from an inevitable death, somehow. Yes, it would truly be a better world.
These folks all say the same thing. High school kids need to learn this. They manage to grasp calculus, creative writing, and obscure facts about World War I. There’s no reason they can’t master the basics of personal finance too.
There people are right. The average high school kid is very capable of learning the basics of personal finance. He’s just not that good at remembering them.
Newsflash: it is taught
I can actually remember the basics of personal finance being taught in my math class in the late 1990s. We touched on the debilitating impact of interest, various types of asset classes, the magic of compound interest, and so on.
I am apparently the only one who remembers this. Everyone else had their memories wiped, Men in Black style.
We also learned about it during a course called Career and Life Management (CALM), a required prerequisite for anyone in Alberta to graduate high school. The only thing I remember from CALM is the graphic pictures of various sexually transmitted diseases, to be honest.
So I did a little research (read: 14 seconds on Google), and came up with the curriculum for CALM. It hasn’t changed a bit since 2002. Guess what? Personal finance education makes up much of the lesson time.
CALM teaches the following:
- Fundamentals of getting and using money
- Basic information on income, deductions, and taxes
- Using financial plans
- Examine the negative impact of gambling, lotteries, etc.
- Identify the benefits of proactive personal financial planning
- Develop a personal budget
- Develop strategies for finding a roommate
- Describe the rights and responsibilities of a tenant
- Describe the influences on personal consumer choices
- Demonstrate informed consumer actions regarding health issues, products and services
- Identify types of financial institutions
- Develop basic banking skills, such as ETFs, ATMs, online banking,
- Analyze the use of other cheque cashing services and their benefits and limitations
- Generate strategies for using credit wisely
- Describe the continuum of saving and investing, various common investments and the pyramid of risk
- Identify and analyze a variety of types of insurance
And so on. Trust me, there’s more there. It starts on page nine and goes to page 11.
Remember, this course has been in place since 2002, and even before then, I can assure you such a course existed.
So this is great, right? If Alberta has comprehensive financial literacy education, then we must be collectively be doing pretty good, right? Go ahead internet, confirm my already held belief.
OH GOD DAMMIT.
That was a few months ago, though. Maybe things have gotten better.
Nice work, Alberta.
Even though Alberta has financial education, it clearly doesn’t work. Collectively we put very little away when times were good, leaving us with the highest per capita debt in Canada while dealing with a crummy economy. I can’t think of any better proof than that.
The problems with financial literacy education
It really grinds my gears that us personal finance folks think the only thing keeping the average person from true financial literacy is a high school course.
First, it’s a tremendous insult to our educators.Do you really think teachers haven’t already tried teaching financial literacy? Are you suggesting to me that a group of people who think education is the answer to LITERALLY EVERYTHING haven’t already tried their default solution?
When was the last time you heard a teacher recommend less education? It was never. A teacher has never said that. I guarantee you this group of people have already figured out teaching this stuff is a solution. Hell, they’re already doing it. Don’t think that Alberta is the only place trying this.
Secondly, we already teach kids many things they end up not doing as adults. We teach kids safe sex, but we all know a pregnancy or two that was a total accident. There are still lineups at McDonald’s and Wendy’s, yet kids are taught to eat well. And as anyone in the finance business knows, the average person is terrible at math. Not hard math like trigonometry, either. Easy math like fractions and percentages.
We’re all personal finance nerds, so of course we’re going to talk our book. Health nuts are probably in their corner of the internet saying the same thing we are. “If only they taught eating better and physical education in schools! Then we’d all be less fat!”
The average high school kid barely has a job. Their parents take care of all their needs; all they need to save for are wants. Is this the kind of person who is really going to absorb financial literacy? They’re just not prepared to receive the message.
The internet is filled with all you could ever want to read about personal finance. The basics are a Google search away. And since we can all agree they’re pretty simple tips, they should be easy to grasp.
The system we have works pretty well. There needs to be a certain amount of personal responsibility. We can’t just bitch and moan it’s all the government’s fault. If the information is freely available–and it most certainly is–then your lack of financial literacy can only be blamed on one person.
Personal finance blogs are uniquely positioned to benefit from this. Previous financial literacy pushes have come from the banks, mutual fund companies, and other dubious sources. If we’re truly unbiased (which is a problem since we all want to make money), there will be plenty of potential for teaching this stuff to the masses.
Personal finance bloggers should want the world to remain financially stupid. Nobody with a positive net worth Googles “how to get out of debt.”