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?