Teaching financial literacy

[Exterous]

I've long been an advocate for mandatory financial education classes in school but it seems they may not be as influential as I thought:

Mandell started asking students he surveyed whether they had taken a semester course related to personal finance, to see if those who had were answering more questions correctly than their peers. The results were dismal.

"There was zero difference," Mandell said. "We did this for five separate national studies of high school seniors, and we found no difference."

Among college students, those who had taken a high school class did no better than those who had not. Even college classes in personal finance, business and economics failed to register a statistical benefit.

Instead it was critical thinking skills that lead to the best benefits:

Instead, what predicted smart financial decisions was analytical skills and problem-solving ability. Engineering and science majors performed the best.

From The Detroit News: http://www.detroitnews.com/article/20130422/BIZ01/304220310#ixzz2RE1N0dQ6

That makes me a little nervous as the trend seems to be moving away form critical thinking/problem solving to rote memorization and test taking skills.

I am wondering if it is how the information is presented or perhaps an absence of continual reinforcement? Kids get years of math classes so maybe one or two financial classes is not enough. Maybe a lack of seeing those lessons at home?

Still - very interesting to see how little improvement was shown so far

 

[Doppel]

Going only on OP's post it seems this is a greater criticism to schooling in general than just financial literacy.

 

[BoberFett]

I have long thought that the lack of teaching personal finances is a major failure of schools. As Doppel said though, our schools are utter failures in general, financial education is just another victim.

 

[Texashiker]

That makes me a little nervous as the trend seems to be moving away form critical thinking/problem solving to rote memorization and test taking skills.

Considering a lot of schools suppress critical thinking, we are in some deep crap.

We would not want students asking questions that are critical of the school system, now would we.

 

[almightyobo]

I'm in a business club at my university. We have this program called "Peer Financial Counseling" where we teach new college students about personal financing and budgeting.

I absolutely believe that this should be a required course. Its amazing just how bad people are with their money or just simply have no clue how to budget their income. This applies to many adults as well...

 

[Texashiker]

I'm in a business club at my university. We have this program called "Peer Financial Counseling" where we teach new college students about personal financing and budgeting.

I absolutely believe that this should be a required course. Its amazing just how bad people are with their money or just simply have no clue how to budget their income. This applies to many adults as well...

So you dispute the opening post that stated personal finance classes do not help?

 

[woolfe9998]

Going only on OP's post it seems this is a greater criticism to schooling in general than just financial literacy.

More precisely, it's saying that learning critical thinking is more important to functioning in a given area than learning substantive information about the area in question. It's also saying that those with a science education do best because part of that education is critical thinking.

 

[Juror No. 8]

Seriously? You want agents of the government teaching financial literacy? The same government that stands as an object lesson in waste, fraud, corruption, financial mismanagement, and inefficiency?

Wonderful. Maybe we can also have the blind teaching drivers ed?

 

[nextJin]

Seriously? You want agents of the government teaching financial literacy? The same government that stands as an object lesson in waste, fraud, corruption, financial mismanagement, and inefficiency?

Wonderful. Maybe we can also have the blind teaching drivers ed?

Wow a post worthy enough to get put on ignore.

What is the goverment teachers going to do? Tell your kids (whom you don't teach any financial responsibilities) that you should throw your money into a fire or invest in gerbil shit fuel then go out and get 5 credit cards, max them out and rent a 80k home for 2k a month?

Get real man, wtf is with these insane nutters flooding these boards.

 

[Juror No. 8]

What is the goverment teachers going to do? Tell your kids (whom you don't teach any financial responsibilities) that you should throw your money into a fire or invest in gerbil shit fuel then go out and get 5 credit cards, max them out and rent a 80k home for 2k a month?

Look, Child Left Behind, do you honestly believe the same government that is fraught with waste, inefficiency, corruption, and financial mismanagement is in any kind of position to be teaching the people how to be financially responsible? You see what government has done to general education, and now you want them to teach the fundamentals of finance, when they've so clearly demonstrated that they have no intention of practicing anything they preach?

LOL, what an imbecile.

 

[DucatiMonster696]

Yes I would think a person would need a minimum of critical thinking skills as a baseline to be able to benefit from any personal finances management class but that doesn't negate its need in schools to be taught just like sex ed isn't very effective for people with zero critical thinking skills.

 

[Atomic Playboy]

Look, Child Left Behind, do you honestly believe the same government that is fraught with waste, inefficiency, corruption, and financial mismanagement is in any kind of position to be teaching the people how to be financially responsible? You see what government has done to general education, and now you want them to teach the fundamentals of finance, when they've so clearly demonstrated that they have no intention of practicing anything they preach?

LOL, what an imbecile.

I'm curious as to who you think "the government" is. Do you honestly think that the high school teacher in Anytown USA has any similarity to the congressmen who dictate Federal budgets? The people who spend the money (often quite wastefully, it's true) have absolutely zero impact on an individual class curriculum anywhere in the country. It comes across as deranged to conflate the two.

 

[Mr. Pedantic]

I've long been an advocate for mandatory financial education classes in school but it seems they may not be as influential as I thought:



Instead it was critical thinking skills that lead to the best benefits:



From The Detroit News: http://www.detroitnews.com/article/20130422/BIZ01/304220310#ixzz2RE1N0dQ6

That makes me a little nervous as the trend seems to be moving away form critical thinking/problem solving to rote memorization and test taking skills.

I am wondering if it is how the information is presented or perhaps an absence of continual reinforcement? Kids get years of math classes so maybe one or two financial classes is not enough. Maybe a lack of seeing those lessons at home?

Still - very interesting to see how little improvement was shown so far

I'm just reading Rich Dad Poor Dad right now. While I think the author makes the treatment of money very political and makes a lot of very vague (and sometimes untrue) generalisations, and I disagree with a lot of what he says, in one aspect I think he hits the nail right on the head - the area of personal finances is controlled not by rational thought, but by fear. I think the idea that critical thinking skills that allow people to abstract and depersonalise issues and make rational decisions based on this is far more important than rote-learning specific financial situations.

 

[s0me0nesmind1]

The last thing corporations (and to some degree, myself) want to teach your average consumer is how to save. How to plan. Or how to prepare. All 3 of those are like toxic fumes that make people like Warren Buffet start to melt.

ninja edit: To be completely frank: If consumers were to learn this our stock market would tank completely in 1 day. Thats all it takes. We are a nation of debt wielding retards, and now that it is the way, it is what stocks expect for earnings.

 

[s0me0nesmind1]

I'm just reading Rich Dad Poor Dad right now. While I think the author makes the treatment of money very political and makes a lot of very vague (and sometimes untrue) generalisations, and I disagree with a lot of what he says, in one aspect I think he hits the nail right on the head - the area of personal finances is controlled not by rational thought, but by fear. I think the idea that critical thinking skills that allow people to abstract and depersonalise issues and make rational decisions based on this is far more important than rote-learning specific financial situations.

In a way, I have to completely agree. I am a total pessimist when it comes to the world and this nation. I know social security isn't going to be there for me in 30 years. Your average person? Doesn't cross their mind. To be honest, I find optimism to be a disadvantage as I clearly just illustrated.

 

[Juror No. 8]

I'm curious as to who you think "the government" is.

The government is whoever determines the outcomes of its "elections". Basically rich people and corporations.

Do you honestly think that the high school teacher in Anytown USA has any similarity to the congressmen who dictate Federal budgets? The people who spend the money (often quite wastefully, it's true) have absolutely zero impact on an individual class curriculum anywhere in the country.

LOL.

Wait a minute, you actually believe the teachers inside government indoctrination centers are completely independent and can teach anything they want inside their government classroom?

LOL! You do! You actually do!

 

[Doppel]

The government is whoever determines the outcomes of its "elections". Basically rich people and corporations.



LOL.

Wait a minute, you actually believe the teachers inside government indoctrination centers are completely independent and can teach anything they want inside their government classroom?

LOL! You do! You actually do!

I doubt he does. Rather he likely feels that there are general financial principles that are applicable to most people's lives.

I'd like to point out that a career criminal involved in organized crime can still teach his kids right and wrong.

 

[Juror No. 8]

I'd like to point out that a career criminal involved in organized crime can still teach his kids right and wrong.

And would you trust a career criminal, or government, for that matter, since there's essentially no difference, to teach your children right and wrong? Or would you do it yourself?

 

[nextJin]

I'm curious as to who you think "the government" is. Do you honestly think that the high school teacher in Anytown USA has any similarity to the congressmen who dictate Federal budgets? The people who spend the money (often quite wastefully, it's true) have absolutely zero impact on an individual class curriculum anywhere in the country. It comes across as deranged to conflate the two.

I have him on ignore now thank god but this is not something like US History or what have you where opinions could sway greatly. What the dumbass is effectively saying is that the US Gubbermint is going to start forcing math teachers to teach 2+2 = 5.

They are not getting taught college level economics where there are several different schools of thought. They are getting taught how to balance a checkbook and proper financial management. Like I said, he seems to think they are going to tell kids to invest all of their money in government bonds or something totally out there.

I am pretty sure Democrats, Republicans, Libertarians and others all balance their check books the same, use Quicken the same, and maintain what hopefully is proper ratios in their portfolios for their age.

 

[Juror No. 8]

I have him on ignore now...

LOL.

Another one waves the white flag!

 

[Mursilis]

Maybe a lack of seeing those lessons at home?

I strongly suspect there's your answer.

I also suspect it's not an education issue so much as it's a personal philosophy issue. That is, most people understand in the abstract about the need to save, plan for retirement, etc., but in reality are unwilling to delay instant gratification for the sake of long-term goals. Society reflects and endorses these short-term choices ("YOLO!" 🙄) and the gov't rushes to aid you if you made stupid choices like buy an inefficient car ("Cash for Clunkers!") or a house you can't afford with an ARM, so we get the situation we have now - a nation of people who are, for the most part, financial incompetent. Yay America!

 

[Exterous]

I'm in a business club at my university. We have this program called "Peer Financial Counseling" where we teach new college students about personal financing and budgeting.

I absolutely believe that this should be a required course. Its amazing just how bad people are with their money or just simply have no clue how to budget their income. This applies to many adults as well...

Do these people seek out the counseling or are compelled due to circumstance? If so I am wondering if there might be a selection bias in any results seen. (You care enough or are in dire enough straights that you seek out help and will be more likely to pay attention/retain information than regular Joe Schmoe)

I still agree that it needs to be a required class but perhaps the focus needs to be changed a bit - less procedural and more problem solving

I disagree with a lot of what he says, in one aspect I think he hits the nail right on the head - the area of personal finances is controlled not by rational thought, but by fear. I think the idea that critical thinking skills that allow people to abstract and depersonalise issues and make rational decisions based on this is far more important than rote-learning specific financial situations.

I strongly suspect there's your answer.

I also suspect it's not an education issue so much as it's a personal philosophy issue. That is, most people understand in the abstract about the need to save, plan for retirement, etc., but in reality are unwilling to delay instant gratification for the sake of long-term goals. Society reflects and endorses these short-term choices ("YOLO!" 🙄) and the gov't rushes to aid you if you made stupid choices like buy an inefficient car ("Cash for Clunkers!") or a house you can't afford with an ARM, so we get the situation we have now - a nation of people who are, for the most part, financial incompetent. Yay America!

Good points - emotional relationships to money get in the way far too often - maybe most of the time for some people. Greed, jealousy, fear move people away from good decisions. They may know what the right course would be but emotions and a lack of critical thinking about a subject cause them to obscure the better path and justify the one they want.

That makes me think the basis for a positive relationship with money would need to be formed at an early age creating the foundation for subject specific education later

 

[Pr0d1gy]

Having the American government teach us about financial literacy is like having the Nazis teach us about Human Rights.

 

[1prophet]

Passing the marshmallow test is the first step to the self discipline and ability to manage ones financial life,

unfortunately those type make poor impulse consumers because they actually think before they jump into any type of financial decision.

http://en.wikipedia.org/wiki/Stanford_marshmallow_experiment

 

[Exterous]

The last thing corporations (and to some degree, myself) want to teach your average consumer is how to save. How to plan. Or how to prepare. All 3 of those are like toxic fumes that make people like Warren Buffet start to melt.

ninja edit: To be completely frank: If consumers were to learn this our stock market would tank completely in 1 day. Thats all it takes. We are a nation of debt wielding retards, and now that it is the way, it is what stocks expect for earnings.

I think it depends on how quickly that happens. Americans have already been deleveraging themselves over the last decade. For example credit card debt is down 13 percentage points and more people are debt free than in 2000. Even those people who have good/stable jobs are more cautious about getting a mortgage and are more reasonable in what they will spend on a house

The two big exceptions to this are seniors and recent college grads/students

I know social security isn't going to be there for me in 30 years.

Complete side note but it most likely will be. (Nothing wrong with planning like it won't be though) I'd be far more concerned with health care