But more importantly: What a wide swath of folks need is how to survive poverty. So many people never get to the point of even considering a CD or IRA. Most folks only really need the bank account for paying things. 401(k) simply because that's what is offered by the employer, and you have to get paid enough to really use it. Sometimes $5 today really is more important than $10 when you retire since it means food to make it to retirement. MSA is similar: You need the extra money. No point in a MSA if you can't afford insurance anyway.

If you can't teach how to afford poverty, the rest is useless and completely tone deaf.

Likewise, most folks aren't going to open a business and many won't invest in markets.

Realistically, what we need are online resources in plain, simple english that explains these things and/or classes that are mandatory for folks starting businesses. The younger the person, the more likely the person is to be pretty good at consuming information on the internet. Just make sure folks know where to go to get good information.

Not accusing you of anything BTW.

You've got to convince people that by spending every windfall (and by windfall I literally mean like 20 to 50 extra dollars) to "make up" for the resentment they felt when they couldn't pay their rent on time and got Eviction Notice #1... they've got to SAVE IT or the entire rest of their life will just be a boom and bust cycle of windfalls. Once you are proactively "defending" not eating into your hard earned savings account, your mentality changes 180 degrees - in a single day vs when you are living in the red 365 day/yr.

I know a guy from college, poorest guy I know, constantly begging off family & getting late fees on his rent. He works a crap job though at least 250% minimum wage because he couldn't finish school on the 6 years of full-ride scholarship he got for having the right skin color (school diversity scholarship) and then still wanted a degree so took out a $80,000 loan for a fraud school. He failed out.

I lived 2 years on his same income, it is low, but he doesn't live in a HCOL area - so I can assure you it is plenty if carefully managed. He doesn't buy anything impressive, he appears to live a basic life, BUT: He just has no idea how to manage his emotions and therefore to manage his occasional spending. There are probably 10 guys like him for every person who actually is so broke there is no way out. I know how he uses his windfalls - he openly admits it to me without even thinking for a second that it makes no sense - and he's in his 40s now. I can't lecture on it because the emotional wall that comes up won't let him hear - it is "capitalism" that is to blame apparently and some politicians. This is what America's "poor" looks like, it is far more a mental state than concrete reality.

No, this is what poverty looks like in the strawman you've built up in your head. I guarantee you the person you describe exists, and is just as you describe - but they're also not representative of American poverty. But they're certainly the caricature of it that certain groups love to push for political reasons and have been doing so consistently for decades. In the 80s it went by the myth of the 'welfare queens'. A caricature that was demonstrably false - but that didn't stop it from becoming a commonly held perspective at the time (people have since learned the truth). And the process goes back further than that.

The rest? Spent every paycheck, griped about immigrants and how the govt takes too much, bought lottery tickets, tons of toys at Christmas. One couple even lost had his kids taken away by CPS, was told they’d get them back once they could move out of the hotel they were living in and demonstrate they could stick to a budget - they spent their tax refund on a used Mustang.

Perhaps there are plenty of people who save what they can, make smart financial decisions, and STILL struggle in poverty. That’s not the case in my experience, but I’d love to be wrong. The hardest part about escaping may just be having no clue how to, or just plain refusing to implement it.

Blaming poverty on "impulsive sex" and leaving blameless the policies of limiting birth control and freedom of choice is a pretty myopic point of view.

You'll never see anything like his pro open borders book from the right wing:

https://www.amazon.com/Open-Borders-Science-Ethics-Immigrati...

Simplest way to describe it is that their definition of "I can afford X" is "right now I have more money than X costs". Really!

These people will of course always be poor, regardless of income, subsidies etc.

How many they are is an empirical question, and I haven't seen any data.

One idea to handle them I like is to pay people daily, instead of monthly/biweekly. In the modern computerized world, that should be simple, and could really help some people.

Your idea of daily payouts is a very clever hack on the system and deserves a practical trial. It would be most interesting to see if it encourages inceased savings on this scale.

Every "windfall" takes care of a need, makes you more secure with things like food and shelter, or gives you some mental relief by providing a few moments of entertainment. There is no saving for those other things if you have been walking to work because you can't afford to fix the flat tire or if you've been in pain due to poor shoes.

There is no advice on how to afford things if you only have $5 extra at the end of the month and definitely no advice on how to afford life if you simply don't earn enough. "Saving a windfall" is pointless if you have a hospital bill that is threatening to sue and deduct the money from your paycheck.

I am not sure you really understand poverty.

I won't claim it's the majority, but I've certainly seen lots of people blow windfalls of all sizes on ridiculous things (from someone working crappy odd jobs like loading trucks for barely enough money for food and necessities getting a one-time construction gig for a fixed sum and blowing it on a huge party, to barely have enough money for food again in literally a week; to someone using a bonus AND running up credit card debt to go on a fancy vacation, probably far more expensive than my techie vacations, and then complaining to everyone how they have crippling levels of credit card debt interest payments).

I can kinda understand where the psychological need might come from, but it has to be fixed regardless... just like drug addiction while explainable needs to be fixed. That is, if you care to reduce poverty.

Oh an my favorite example from Russia is where someone's rainy day fund of ~$1000 in cash (in the 90ies/early oughts that was a lot of money) was stolen by their sibling and blown on restaurants and expensive clothing. When found out and confronted, the sibling was defensive and said well you were not using it anyway! That's the psychology of many poor as I see it (not the stealing, the "not using" part).

The guy I'm talking about has windfalls - and when they come he'll feel so bad he goes out with friends and blows $30 on a meal. If he changed his celebrations to $15 meals using a coupon clipped from the paper (I know he can, I've been with him I know his world and options) and saved the other $15, the next time he got an unexpected bill he would have the savings to cover it. (The definition of unexpected here is very loose - because for him it is very loose. Everything is "unexpected" and "unplanned" - but YES - a flat tire) He does this and before long his credit score starts to improve, before long he has balance free transfer offers, before long he is no longer throwing money at credit card interest but instead paying down the balance because he has 18 months 0 interest

My OTHER friend, who is now a millionaire, was earning the same super low income. But he was already investing based on this income by making hard compromises on day-to-day living. He is Asian, so has a completely different cultural background based on his immigrate parents believing one needs to save no matter how low their income. Yeah if he didn't get a better job he probably wouldn't have made it to the millions, but, on a poor salary he was already well on his way to home ownership and all the domino effect line of decisions that lead to lower and lower cost of living (once you're in a home equity is building instead of disappearing on rent) etc. even on the same low salary.

If I didn't know the Asian guy, I'd probably still be using your same line of argumentation - pretending that there is some lower limit where you "just don't have enough" but it is just such hogwash & excuses that got the poor where they are in 9 of 10 cases of poverty in the US at least. Clearly there is a huge difference with the 1 case or with cases in another country where the political system's own evils may cause it

Pretending that none of the poor have maladaptive behaviors is not helpful to them. There are also many other reasons for poverty, many of which are not under that person's control - but that makes it more important to control what you can

"Black rednecks and white liberals" by Thomas Sowell has a lot more details about cultural traits associated with persistent vs transient poverty

There are indeed times when a problem could be solved on the higher level by managing resources better, if you actually have the hinterland. Yet not all problems are about the superstructure you built on physical realities, and sometimes you simply don't have enough money no matter how you budget, or not enough smart people no matter how you place them in an org. chart.

Casting every problem down to a problem of management & choice seems to me a lazy excuse to escape the reality.

I think that’s where the Starbucks and avocado toast tropes come from. They’re not 100% right, but they’re surely not 100% wrong either.

I work with engineers who are making 6-figures and struggling with money or on course for a poor retirement. For those people, it’s 97+% choices IMO.

Expecting a couple to never have sex is unreasonable and pregnancy cannot always be prevented. In some areas, access to abortion is abysmal, though in some areas, a woman can get the day after pill for emergencies - but that's hardly prevention.

As far as pregnancy prevention: The best prevention is actually male sterilization. Condoms break. Every single prevention method for women have a failure rate, including sterilization methods. For hormonal birth control, lots of things affect it, including some medicines.

And this is all assuming folks can afford medical care and prescriptions, which you need for most forms of birth control. I'm not sure anywhere in the US will mail condoms to you for free (unsure of how well spermicide alone performs or if they still sell a sponge for women). Heck, a young woman who doesn't want children cannot generally get sterilized, insurance often doesn't pay for it, it isn't cheap, and IIRC you need time off.

you have to improperly use (or eschew entirely) the several forms of birth control available. you don't need insurance to buy condoms, and they are not particularly expensive. even if you can't afford to buy hormonal birth control, an IUD, or condoms outright, you can often get them for free or very cheap through planned parenthood. if you are even using one of these correctly, your risk of pregnancy in a given year is <= 2%. if you combine them, the risk is well under 1%. if you mess up somewhere along the way or are one of those spectacularly unlucky people who gets pregnant anyway, abortion is still legal (for now, at least) in all 50 US states. once again, you can get this for free or a greatly reduced price through planned parenthood.

if everything I mentioned above has gone wrong and you actually bring a child into the world that you did not plan for, you can still put the child up for adoption. the demand for newborns is quite a bit higher than the number that are actually available for adoption.

I can easily believe there are a lot of parents out there who had good plans for raising their children that went sideways due to truly unforeseeable circumstances. I think there are also a lot of parents who chose to have children without having any idea how they would support them. what I don't believe is that there is a meaningful number of parents in wealthy countries who are stuck supporting children they had no intention of raising.

Lots of folks get pregnant on these: Most folks can't take birth control pills perfectly. (I Personally cannot use hormonal birth control at all without major side effects, and wanted to be sterilized - but that's not generally an option for childless women)

Abortion is legal, sure: But it isn't free either and in some states, it takes travel and things to get there.

Expecting folks to put their child up for adoption is simply cruel. Besides, we should look at more than financial viability for folks. I'd rather help folks raise whatever children they have than sell children off (taxpayer funded is the way to go) and I'd much rather foster homes and adoption of older children be encouraged.

Most people also make financial mistakes. The people who had help, or enough slack to recover shouldn't look down on the ones who don't.

What exactly is your theory of poverty, if you don't mind me asking? That impoverished folk should be better at saving, and then they wouldn't be impoverished?

It’s ignorant to assume that all poverty is the result of poor decisions and an unwillingness to save, but equally ignorant to pretend that doesn’t exist at all.

At our class we had pre-defined businesses at first to learn how to file the tax returns. But for a long term project we could think of one on our own. The task wasn't to come up with a business plan though so nobody really had a groundbreaking ideas. We could just pick something like a bakery, research initial investment and go from there.

We could also build a tech project in our last year of school to be excused from part of the graduation exam. We just had to pitch it and present it instead of the exam (we also had to provide code and/or tech documentation). Though we didn't need a business plan for that either. But it was obviously better for the grade if the project had at least a basic business plan.

For example, a better question would be "Why don't we eliminate <high-school-biology> and teach finance instead?"

I think there's too much algebra in secondary school (and not enough of it in college).

Few people are gonna miss matrix multiplication after school.

I strongly support adding personal finance and logic (philosophy of arguement) courses to the core curriculum.

Alternatively, I would drop things to 3 years of English to add a year of Home Economics that covered basic cooking, practical nutrition, taxes, personal finances including insurance, and saving for retirement. All I can recall from mine was a few weeks we learned how to fill out a check and sew a pillow.

I don't have a good argument against, but this makes me sad to read. learning all the names for different shapes was the first (and last, until I got to college) time that I found math interesting.

We could have at least spent some of that time learning about finance.

I'm also pretty sure a lot of my courses, could have been truncated to allow extra time for another class - I don't see why it has to be so binary.

We have this debate about math and reading. Finance? Good luck.

I found it much more interesting to study things with practical implications, and I also think embedding financial literacy into maths might be a good idea.

I'll add that I did of course eventually find uses for some of the things I was taught in maths class: path finding algorithms for a game AI, neural networks, genetic algorithms, all sorts. But in class, I didn't know any of these uses.

How much money do you think most people have? Half this stuff is completely irrelevant to average workers who don't have income to invest in variety or depth.

Sure, basic financial responsibility and options should be core, or near, but beyond that a detailed dive is going to supplant some other core educational area for no obviously good reason.

Also healthy eating habits and information about birth control should be taught in addition to financial literacy and at the expense of the current curriculum, but it is not because politics (both left and right here).

Knowing the reasoning behind not trying to time the market will allow you to have the moral foritude to not sell your retirement fund when the market is freaking out, like it did this spring. That is much more valuable knowledge for most people then knowing higher math and English literature.

Another place that the education system is totally worthless is healthcare. Do the schools teach us to contact our insurance companies for interaction Id numbers to see if a provider is in network and then proce we contacted 6months later...hah no. Yet just this last week I had two different providers offices try and schedule me for an appointment costing $160-$200 that subsequently my insurance would not pay for. However the in-network rate is $10. Yes this is a mess but even though it is a mess education is instead trying to teach a classical liberal arts education which most people neither want nor need.

We need educational reform in this country and significant cuts to the educational system could be exactly what is needed as a wake-up call.

Misquote. "knowledge of the complexities of the financial markets...". Again, I've acknowledged the importance of basic financial education; deeper compulsory coverage would just displace other more useful subjects.

Another place that the education system is totally worthless is healthcare. Do the schools teach us to contact our insurance companies for interaction Id numbers to see if a provider is in network...[clipped]

I wouldn't know as I live in a different country, but perhaps at least in this instance the problem is not your education system but your healthcare...

https://dqydj.com/average-median-top-net-worth-percentiles/

The data consistently indicates that Americans have significantly more ability to invest than the impression many people seem to have.

I'm not doubting, I just found it hard to find drill down info, including my own (not American) country.

after all expenses

To clarify - does it include all reasonable expenses for recreation, culture, food, commuting, etc, basically any normal (neither profligate or frugal) expenses for a balanced life?

The US Bureau of Labor and Statistics (BLS) tracks the expenditures of every income decile of the population in considerable detail. If you want to know how much the average person at the 30th percentile of income spends on eggs, fresh vegetables, commuting, or many types of entertainment or non-essential spending, BLS can tell you in surprising detail. I have not seen similarly detailed data for other countries, which makes comparisons difficult.

The expenses BLS defines as "ordinary" are comprehensive, pretty much everything you'd expect, and they make no value judgments regarding how people actually spend in a particular category. The only category exclusion from ordinary living expenses that might be controversial is eating out at restaurants, but that is based on the fact that most Americans do so infrequently (it won't feel this way to the urban minority).

Subtract the median ordinary expenses from median income to arrive at $12,000 per year. Anecdotally, this number feels about right.

For example, I had French classes for 4 years and can't speak, read or write it to save my life. The teacher wasn't bad and kept telling me, who knows maybe one day I'd move to France. As a kid, I thought the whole thing was ridiculous. I was quite happy where I was.

Better option is to give ppl, at any point in their life, a route to learning when they discover a knowledge gap.

As did happen when I was sent off for work in France.

I really appreciated/found really helpful the tip of the "seven bank accounts" (Jordan Page, FunCheapOrFree)(also not connected in any way): https://www.youtube.com/watch?v=auzLhKvsxnQ

(Ramsey a similar type of management the "envelope system").

Edit: from what he sometimes says on his radio show, some schools in the USA 'teach' his program/system/7-step-process. I find this amazing and I wish that this (or something similar) is properly taught to every school on the planet.

I can see the appeal of a straight talker and pull up by your boot straps personality such as Ramsey. He has helped a lot of people. His style does not work for me personally.

I personally think the financial problems (in general) with black people (aside from racism) in the US stems from two related things: the lack of a coherent family structure and lack of intergenerational wealth transfer. The single-mother family poverty angle is pretty clear: Single mothers have low availability and are poor, and poor people tend to make poor financial decisions due to exploitation and desperation. The intergenerational wealth transfer angle is if you have something of value you are going to transfer to the next generation, you are going to spend time teaching them how to care for it. Think transferring a business, property, and other assets. Legacy is a real important thing for most people. This is something rare for black Americans. Unfortunately in a lot of cases the thing that is transferred between generations are debt obligations.

I’m not discounting your life experience but statistically speaking most black households do not experience Fox News. And if you lived in an environment where most black households did experience Fox News, then that might point to an even more skewed environment, statistically speaking.

You say “aside from racism” and then point to two things directly attributable to racist policies.

You're also denying people of color agency by saying that unless personal finance education comes to them, they have no hope of finding it by themselves.

Nobody yet sent me back in time.

And the curriculum in my high school is still the same.

3hrs of Latin out of 27hrs per week for 3 years.

3hrs of Latin out of 30hrs per week for 2 years.

More than 10% of my high school was Latin.

When I took ASL I remember them saying the reason ASL was accepted as a foreign language was because it has a culture that was taught along with it. It may or may not be taken seriously when taught, but a lot of people grow up in a bubble and don't get exposed to other cultures.

I've lived with a bunch of people that were fluent in English, but it wasn't their first language and others who were English native but studied foreign languages more seriously. Learning another language makes you think more about your own language. One friend said her teacher gave her a basics of English book early on when studying Japanese.

Even suppose you make students take a second financial literacy course, at the expense of letting them study what they want (electives), it's not going to help. Despite all the core curriculum that already exists, just because you're forced to take a class does not mean you're going to learn its material. Maybe find a better way to solve your grand social engineering problem, because "more education" isn't it, and disrupts a lot of students from actually achieving a good education because they're forced to deal with required core BS aimed at the lowest common denominator.

But I see alot of parents who don't want to discuss day to day finances or how much money they make. Kids need to see to learn.

I certainly didn't take one in Virginia 20 years ago.

Finance by itself is not that complicated. If you know the underlying maths, that's the kind of thing you can learn on the spot, at least on a basic level. If you want more than that, you probably should hire an accountant, or it becomes specialized studies.

For the rest, I don't know what kids learn in the US but I guess things like the great depression are part of the history lessons. Do they teach that without any insight about the economics of it?

So there you have it, you know the stock market and taxes exist from history lessons and you learn the mathematical operations to run the numbers. I don't remember learning about the legal aspect of finance (which may be the most important of all), but we certainly had on overview on how the legal system works.

This is a common belief, but it unfortunately doesn't work that way. "Transfer of learning" as it is known in educational psychology, (similar to 'learning how to learn',) is basically a failure. People have been studying it for over 50 years, and it turns out that students are very bad at taking things they learn in one class, and applying it in another.[1]

[1] https://en.wikipedia.org/wiki/The_Case_Against_Education

If history is going to be discussed, it should be more just one view. The Great Depression, for example, is often described as a failure of economic freedom, rather than the failure of the government's myriad interventions.

Knowing only ONE side of the story doesn't necessarily leave kids better prepared to learn, unless it's essentially true (good luck reaching that consensus).

I don't think it's important for kids to learn about specific financial products like savings accounts, CDs, different categories of stocks, etc. That all changes by the time they get into the working world anyway. But just knowing how debt & compound interest works would save many young adults from mistakes that cost them decades of their life.

And most schools have a government class, where you learn why taxes exist and how they've changed over time. This class is generally also where you learn about the legal system.

Schools are mainly about supplying cheap workforce for existing companies.

Learning things like starting your own company or managing money in a way that increases negotiation power of the workers, is a disadvantage for companies.

<tin foil hat mode:off>

Having financial knowledge is also not always a direct requirement to get the job at a company, so actually it doesn't provide a direct competitive advantage if you are in the job seeker pool.

These 2 factors create maybe the equilibrium of the current composition of the curriculum.

This is historically true and well documented. There is no tin foil hat here.

> Learning things like starting your own company or managing money in a way that increases negotiation power of the workers, is a disadvantage for companies.

Also historically true. For centuries the education of aristocrats was focused on producing leaders and everybody else was trained to become a worker.

In many countries schooling is still very authoritarian...

It got cut from the curriculum at some point over the years along with art, music, civics, wood shop, gym, and all the rest.

The question is where has all the money gone? Not sure about K12, but at the college level it's very clear, it's all gone to the administrative bureaucracies, with less going to the actual faculty and educational programs.

School isn't about preparing children with the skills necessary to navigate the modern world. School is about teaching reading and math. The steelman version is that reading and math are fundamental, and the other skills can be learned independently if the child has the necessary literacy and mathematical background. In practice, though, that doesn't happen.

1) Financial rules are legal constructs - so not really suitable for academics. An academic syllabus might claim "Roth IRA implies X" then the law changes and it is no longer true.

2) The schools would be opening themselves up to legal liability if they accidental offer financial advice that goes bad (eg, invest in shares -> first time in history share market collapse -> angry people blame school).

No conspiracy, they just can't teach a moving target and the liability issues are - when you think through them - enough to be very troubling.

And I would argue this artificial cultural limitation on "things must be abstract and timeless" to be academic-appropriate is the biggest reason common people don't learn. The lower the IQ the less able people are to handle the abstraction in the first place, and the higher the IQ the more the person has to have interest in abstract things even though they could understand it (attention span is greatly impacted - in my case - I never remember character names in a novel because I know they are just made up anyway - even if it is my favorite book)

If you can show people something that exists in the real world they can imagine themselves actually using the knowledge and actually pay attention

Try to teach a class about McDonald's profit margins per burger and Apple on an iPhone and then teach the exact same class talking about widgets. I promise you the former will lead to higher test scores because the visualization isn't forced.

I would push for teaching _all_ the young adults about how to navigate and read "legal constructs" (history, the vocabulary, the available tools, the process of making laws, codes, how to fill complaints, etc). That way they could dive into finance or any other domain they may find useful.

Law right now is reserved to a few expert who are interested in it, but that give them too much power

Bigger picture for underlying concepts - what is money? What are the historical monetary systems that have been developed? What is debt? How does fiat currency work and how does this system work globally? A basic discussion of inflation/deflation, monetary theory and practice. How does fractional-reserve banking work (relation to liquidity, money supply, and velocity of money).

I'd add that there are a number of non-intuitive fundamental concepts for investing: the time value of money, compound rates (bonus: calculating differences in growth from tax-advantaged accounts), what is rebalancing and why does it work (related, how does correlation work in improving yield), or even understanding the basics of "capitalism" (specifically the theoretical and practical implications of rent-seeking and accumulation of capital).

This is largely an ethical / moral / social issue. (not sure the correct word).

I've been thinking about it a bit lately because I have 2 young kids at home just starting to earn pocket money. For them money is to spend on treats. Sometimes I can convince them to save up for something larger, but fundamentally it's something for them to spend.

It's not until later in life, when you start selling your time that some people start to see money a little differently. No "treats" are really worth that time you invested earning the money to buy them. Money is not for spending on treats, it's for surviving. (and every cent counts.) Food, shelter, clothing, tools, then as little as possible on entertainment / culture / travel.

Then even later, when you have children, you start to realize that when you spend money, you are not only selling your time, but also the time of your children, because if you can just put enough away for them to start life without debt, they'll have to sell a hell of a lot less of their time to just survive.

err, but the point I was trying to make was that not many people are taught that money is not for spending on treats, but I don't thin that's something that you can be taught in school, (would even agree with).

https://en.wikipedia.org/wiki/New_Great_Migration

Sure it is interesting to learn about the Romans and the Vikings. But we could easily cut out 50% of that and replace it with learning about how the government works. Or maybe the people designing the curriculum would rather keep us in the dark?

Using Hanlon's razor though, it's more likely that educators themselves don't understand this stuff so don't consider it important to teach. Most parents don't understand either, so they don't demand that it be taught. And those few parents who do understand its importance just teach their kids by themselves.

I wonder what changed. :-/

Learned: How to sew, how to cook, how to plan a meal, and that anorexia is bad.

Those are all useful things, but only tangentially related to finances.

The thing school needs to give you is the ability to learn on your own. In order to do that, you need to know the basics of reading and writing, the basics of math, and the basic theory of knowledge. That last one is sorely missing, but that's another story.

You then want a superficial survey of everything humans know. Of course it cannot be anything but superficial, there isn't time after you know how to read, write essays, and solve some differential equations. In the end you're going to focus on the same old things that everyone thinks are important: a bit world/national history/lit, a bit of the headline sciences (phys/chem/bio), and a bit of foreign language and culture.

At best you will end up mentioning the following in passing: economics, psychology, cooking, citizenship, health, the law, and so on.

But yeah someone ought to mention that there are worthwhile fields of study that you'll have to learn on your own.

How would that help the average high school graduate?

So yes, there is coverage of the stock market, but it is a very narrow slice of the pie when you're talking about an entry level personal finance class.

I think a lot of people would change their political views/personal opinions if they understood a bit more about economics.

I don't know if it should be taught in school or if people should just be responsible adults and learn about it, but more people understanding the stock market would be the best way to have proper regulations and stopping it all being labeled as a boogeyman that the rich old white man uses to fuck everyone else over.

People have already complained that arts, music, civics, home ec, and trade classes were tossed to the wayside for APs and STEM. What else is left to toss?

There should be a top down revision of the curriculum every decade - you start by defining the final result - after 12 years of compulsory education what does every citizen and illegal need to know and to what exact degree? What is the minimum number of hours of instruction that can be used to achieve this? Then you realize you need 20 years of education to get to the desired final state. So you have to start thinking creatively: can these two topics be taught in the same lesson by integrating the knowledge into a larger coherent approach? Can the same math lesson that teaches percentages also advance a basic understanding of credit card interest? YES IT CAN.

Teachers, some of them, the ones that use the same lesson from their 1st year teaching 20 years on, are stuck in their ways and have unions to protect their inertia. The only way you can shake it up is to throw them out of their comfort zone by making top to bottom changes at intervals - sorry miss math teacher, you're not going to be able to use that goddamn lesson plan again this year - that's not how we roll in 2021.

I completely agree on school being too many hours and too many days per year. I've read research on the inverse correlation it has with creativity.

What a difference it would make in the land of payday loans, cheap car credit, buy-to-let mortgages and betting shops.

1. The purpose of school: To produce a basic worker who wont question authority and to keep a large segment of the population out of trouble for a majority of the working day (babysitting). School hasn't really changed much since the late industrial revolution with the exception that child labor laws mean more kids stay in and complete school.

2. A typical high school student completes 25 year long classes in order to graduate. Those typically include 4 Math, 4 Science, 4 Social Studies, 4 English Language, 2 Foreign Language, 1 Art, 1 PE, 2 General Purpose (Health, Speech, home EC, etc) 4+ Electives (Sports, Band, Shop, Ag)

What are you going to get rid of to open up some time in the kids schedule to teach finance? You can't take away electives, parents and college like to see their kids involved in things.

If we are going to change the curriculum, are there not more important things to our society to teach? A basic medic class, philosophy, ethics?

I think a one year "Life Skills" class should be added. But the question is, what do you teach. I know too many people that didn't have some really basic skills coming to/out of college. Things like cooking basic meals, doing laundry, basic home upkeep (how to clean to basic maintenance), hygiene and self care, budgeting (this is where basic finance could be taught), or how to drive (for those of us in car dependent places).

LIF102 Sex

LIF103 Money

Get their attention with marijuana, first topic first course. Spend one day on the chemistry, then one day on effects including how to recognize people under the drug’s influence. Then do tobacco, alcohol, caffeine, sugar, same two-day format. Then move back up into pharmaceutical opiates, street opiates, then cocaine. First midterm exam is on the science of drugs as chemicals and their documented effects.

Then move to drug laws and public health issues for awhile. Briefly touch on drug use in other cultures, historical drug use, and drug use by animals. Have them write a paper on drug policy.

Move to a section on mental health to explain some common problematic reasons why people use drugs. Then spend the remainder of the course on wellness, exercise and cooking to offer doable, sensible alternatives to unhealthy habits. Have them do a group project on one of the healthy living subjects.

LIF102 Sex. Just copy Al Vernacchio’s “Human Sexuality” class at the Friends’ Central School, Philadelphia.

LIF103 Money. By now maybe you’ve convinced people these courses are real life skills worth knowing.

Keep going.

LIF201 Prediction

LIF202 Perception

LIF203 Atoms

The real, rubber-hits-the-road reason to have knowledge is to make accurate predictions. You might not think of skilled work as making predictions, but if you design a bridge a certain way so it’ll stand up, you’re actually predicting that the bridge will stand up if you construct the supports a certain way.

How do you even get the information you base predictions on? The study of perception is pretty interesting, surprising and sometimes non-intuitive.

There are some core ideas that have proven really, really useful for making predictions that work. Some of them are not obvious at all, and you’d never think of them yourself. One of these is the atomic theory: “All things are made of atoms - small particles that repel when pushed together, but attract when they’re a little way apart.”

By this time the kids ought to have some faith that all this stuff is important to their lives.

A few members of one generation learns to read and write, they provide the teachers for the next generation, somewhat along the way arithmetic and finance start getting thrown in. How many teachers, especially at the higher levels, really understand their subject, and aren't just reciting it?

Then there are other issues. On the finance side, a notoriously high pressure, long hours career, where is the incentive to teach other people?

We should absolutely change the curriculum the way you suggest, and use basic life skills as the foundation for teaching things like math, biology etc. And better, typically private or privileged entry schools do just that. To do that across the board, well, first we have to teach the teachers. (On that front it would probably also help if the US coped Finland and paid them decently, but that would require some kind of across the board federal funding, and we all know how Americans feel about the T word.)

do you have a source for the 4 years of math, science, ss and 2 years of foreign language required?

I was required to take CE which was supposed to teach financial literacy. although the course material was a joke and didn't apply to the real world.

Half of the English curriculum now is literary analysis. Split English into a grammar class and a literary analysis class, and let students take finance (or computer science or psychology or ...) instead of literary analysis.

I also don't see why foreign languages or art would be particularly more important than finance.

I didn’t take the elective but did take the profile. It taught me how (central) banks work and how to do causal thinking in economics. I still use that kind of thinking to trade stocks (and I noticed that when I come up with an original idea then my stock trading goes quite well, too early to tell if it isn’t simply luck though).

This is the baseline. Certain streams in high school had full blown booking keeping courses, accounting practices and stuff in 11th and 12th grade.

India also had other tax deductible stuff like infrastructure bonds etc.

This is potentially a by-product of Puritan forms of thinking (the same thing that causes happy hour laws in MA to be draconian, and no liquor allowed to be sold on Sundays). I have no doubt early education is much more progressive now, but this is just how I experienced it.

I actually did have questions about money back then, but teachers would always shoot me down when I asked. It's possible this was because the teachers themselves didn't know the answers to my financial questions, making this a generational vicious cycle.

In junior cycle (the first three years), we had a mandatory module "Business Studies". It had two purposes, the first was an introduction to the basics of the more specific modules available from your chosen modules in senior cycle (Accounting, Economics and Business). The second was to cover personal financial details, so it covered household budgeting, pensions (at a shallow level, e.g. defined benefit vs defined contribution and employer contributions never came up, because most students were not going to be in a job where they had much choice), how taxes are calculated (but not how to file returns, thats mostly only a concern for self employed people) and consumer rights. There was also a brief sole trader vs coop vs limited company overview, but my understanding is the senior cycle business module covered this in more detail.

If you then went on to do economics for senior cycle, bonds, equity and futures were covered.

IRA was more a discussion for the history classes however (the different meaning in the US leads to bemusing alternative reading of US ads for Irish people)

The answer is for the same reason that practical skills in general aren't -- cooking, cleaning, how to purchase a car or home, how to review an apartment rental contract or put together a resume, how to raise children, how to mount shelves, how to do laundry.

Education is designed pretty much solely as a feeder system for professional skills, starting with reading and numbers and performance, and then in high school figuring out who will have what it takes to be able to go to college and major in math or English or violin (or professional finance), so they'll be able to eventually become engineers or lawyers or orchestra members (or accountants).

Combined with education as a citizen, which is why we also learn history and a little bit of literature.

For better or worse, it's assumed that you'll be able to pick up all the practical skills on your own, armed with your foundation of reading and math and "critical thinking".

I honestly can't answer this from the school's POV ( perhaps an elective/extra credit whatever should be a good motivation for students) but a couple of things that parents can do and should do before the said kids reach high-school etc:

This can be made as a ritual from a young age where kids can be taught basic concepts whenever pocket money is given and can be given slightly more advanced lessons as they age. Shouldn't take more than 30 mins a week and might actually help kids learn the importance of this way before they get some informal education from the real world.

Brb time to teach my 6 year kid how many cents are there in a dollar ;-)

Eg in Slovenia (small EU country with 2M people) many workers (even old ones) have no idea how much money the country takes from their wage.

In school we covered stuff like "compound interest" but no-one ever thought us anything about taxes.

We have a net, gross and a gross-gross wage (gross-gross being the actual amount the company pays for the worker).

Most aren't aware of the gross-gross wage. The difference between gross and gross-gross is that it's basicaly the same taxes as between net and gross, but around ~80% of it. So this part is never talked about. When job wages are specified it's always in gross. So basicaly most workers truly don't see that the actual taxes are almost double than what they see in the difference between net and gross pay..

By time I dutifully did my taxes in April when I turned 17, the IRS said that I owed them over $10,000 in penalties for not paying "quarterly taxes" on time - something I'd never heard of in my life. This was a huge sum for a 17 year old to try to come up with in the late 1990s, and ultimately the only way out was to fraudulently use a college loan to pay them - otherwise they would stalk me day and night with threatening letters and sanctions

So that's the story of why I'm not a patriot but an enemy of the state, they burned me before I even had the chance to reach adulthood.

I did go to a professional when I was about halfway through the saga. They did not really know what to do. They just wrote another one of the same kinds of letters that I had been writing. Maybe the extra tax jargon in it helped. I don't know.

Ultimately I only had to pay a small fraction of what they were asking, but it left me with a phobia of taxes. The rules appeared to be arbitrary and unknowable (to me) and yet I was still responsible for complying.

irs threatening to lock all my bank accounts (oh how I would love to get stuck overseas with no friends or family where I am and lose all access to money). Exorbitant penalties, and I can easily get them on the phone - only the person I spoke with had an IQ so low they replied to everything I said as if they thought I was mentally handicapped. The phone call was beyond worthless.

Seems it is matter of learning about 200 to 300 or so specialised terms.

Would be good idea to make a github page about these words. Anyone?

Here is example of a US lawyer that has taken upon himself to learn about these words:

https://thedailycoin.org/2020/08/12/the-feds-silent-takeover...

Personally, I agree that it was a huge disservice to most students, and I think that a better general life skills class (I'd probably lump in civics/voting, dealing with various bureaucratic/administrative tasks, effective online research, personal privacy, how one might evaluate various professional services, resume writing etc) that includes basic financial literacy would be much more useful than just about anything else taught in school (to me, learning to socialize, properly empathize, and to reason and critically think are even more important, but also generally not part of most standard curricula).

After college, I got very into FIRE and personal investing, and eventually a while back put together my own basic financial literacy guide. It boiled down first to budgeting and calculating expenses (especially discretionary expenditures) vs earnings (As a school lesson, I think being forced to try to figure out a budget of a single parent on a minimum wage would be pretty eye-opening). For a general class, a practical lesson on tax filing would probably be worthwhile. And then for investing I agree about covering the general landscape of various savings and investments work, but more focused on in-depth/concrete lessons on fundamental concepts. Compounding, tax-advantage, dollar cost averaging, correlation, and rebalancing would basically cover it I think.

I think learning about how money (and debt) works - I'd argue that most people don't have a great understanding of that at all, some basic macroeconomics, and maybe some freakonomics type topics for color would be useful as well, but I don't think that financial literacy needs to go beyond the very basics to give everyone a bare minimum framework to be able do their own research/learning. But I also generally think that should be the goal of every topic taught, which seems to be rather at outs with mainstream teaching and learning practice in American public education.

It was useful, but I think these sorts of topics really benefit from life experience. When you haven't had to pay many bills yourself, it's hard to know what's important and it's mostly a meaningless jumble. Chances are that most kids forgot most of it by the time they moved out of home. But at least it's always easier to re-learn than to learn.

I am not so sure that teaching kids in high school about the various types of interest-bearing accounts or the different markets for financial instruments would be as valuable as simply teaching the basics of how interest works. That way those students who continue on to college can make a more informed decision should they need student loans to help pay tuition.

Oh, you became homeless because you bought a house way outside your financial means (because everyone buys their own house, need to fit in) and couldn’t pay for a couple of months because you got fired, and had no savings (why save, if you can live for today and buy all the fancy stuff to impress people who do not even care about you), and the evil banks took your house?

Well it’s your fault, you did all this on your own free will.. good luck!

All sorts of f’d up things like this happen due to financial illiteracy, and parents cannot be trusted to teach their children finance, because most parents are financially illiterate aswell.

However that doesn’t match my experience at all. I received pretty good financial education from my public middle school and public high school. I learned a ton about stock trading, business creation, and entrepreneurship. Just hosting a virtual stock trading simulation with the classrooms was plenty good enough. It forces you to become good at stock picking and asset allocation.

Unless something has radically changed since I was in high school, high school “economics” is pretty much exactly personal finance.

I am actually trying to solve this problem over at https://www.getmedes.com/

My High school taught us tax brackets, interest, how to calculate a annuity mortgage, make a plan for a business etc..

Most kids just forget after the exam or the year after.

I'm not sure how someone could not understand what a savings account is (you put money in, get a crap amount of interest, eventually take money out. What's to understand?) But i agree with the general premise. However corporate structure might be a bit more than needed.

Fwiw in canada (alberta) we had a class that covered the basics of financial literacy.

https://thedecisionlab.com/insights/education/improving-fina...

I'll try to answer as a parent in CA/US, where I spend most of my time (for some other countries, they don't actually have such a huge looming financial sector, other countries seem to go for the "focus on the fundamentals and the rest will follow" approach)

Elementary to middle school in CA seems to be about having fun and getting a sticker, many times I heard "these grades don't count anyway". Kids learn stuff that's "fun" and read books that are "fun", that's about it - except maybe a couple of semi-serious classes in the later grades. Even if they did teach finance, due to young age it probably wouldn't even register.

High school seems to be a mad dash for college-like credits and classes. If it doesn't serve either (1) student's interests (e.g. sports), or (2) college requirements - core subjects or easy A's, or (3) the current district agenda (scrambling for test averages, or common core, or SAT or lack thereof, or whatever the hype of the year), it will get little attention. Finance doesn't really seem to fall into any of the above.

Mint was a sort of step in the right direction - but basically we need software (agents) to be in the fight on our side - here is the list of your outgoings - 40% of people cancel their Gym subscription after three months - do you want to cancel yours?

Add on to this regulation - the EUs new Open Accounts (?) directive is a huge step.

  *  58% of population thinks they don't pay the VAT tax
  *  21% of population thinks they pay no taxes at all

It doesn't exactly overlap with what you are saying, but it doesn't leave you an idiot either. Plus in Canada a lot of the taxation and investment vehicles are much simpler giving a lower barrier of entry.

People are illiterate on important topics (finance is a great example, politics another one) because they've been spoonfed everything they need in the short term, not realising how little they're actually learning in school.

A financially literate person can make a good life out of an ordinary income. A financially illiterate person can bring catastrophe on themselves and others around them, in spite of an extraordinary income.

Financial illiteracy hurts individuals, families, and society in general.

Edit typo

My teacher was a guy that has his own small IT shop, and he was really excited about having his own (albeit small) business. Unfortunately he cannot teach us anything usable, because he had to follow the official curriculum. Which was about demand and supply theory and economics importance to the modern society. All theoretical stuff without any practical use. The other thing was that I was living in post-communist country, where people generally disregarded entrepreneurship. Everyone that has money was think of as a criminal or a person that takes bribes.

When I was attending university, my economy knowledge was very low. I only heard about so called incubators (you may think of them as watered down startup accelerators for students with good ideas) on my last year there. It never occurred to me to start my own company as I was a student.

Now I regard this times as a wasted opportunity. I really envy people that are 4 or 5 years younger than me. In these 5 years mentality changed and now I see a lot of people starting their own companies or joining US startups (at least here in Warsaw). The law was also simplified and some barriers were lifted (e.g. amount of cash needed to start LLC company). And I ended up working at late stage US startup...

https://www.youtube.com/watch?v=36GT2zI8lVA

People always have pet subjects they think are 'essential' for public education: Robotics! Computer Science! Coding is the new literacy! Teach kids to balance a checkbook! Learn to use spreadsheets! Start getting college ready in kindergarten! And so on.

Really, the public question is always 'what is education for?' The answers have always been varied since public school began. Today, the answer is largely determined by political money disbursement.

TL;DR: It's all about money ain't a damn thing funny. --Grandmaster Flash

That was the best education for me and my brother: we pay our bills on time, have no debt and no creditcard. The best schooling is life.

step 1: accumulate a buffer of 3-6 months expenses in your checking account

step 2: a) identify money that you will not need in the near future. b) accept that you will not beat professionals at picking individual stocks. c) use the money to invest broadly in the market.

step 3: in preparation for retirement (or a large, time-sensitive purchase), shift allocation to bonds.

if steps 2 and 3 are too complicated, buy target date funds instead. the hardest part is figuring out how much money you can safely tie up in investments, but no school can tell you this. step 1 is also pretty hard if you don't make much money, but that isn't really related to finance.

note that 2b) means you sidestep all the stuff that's actually complicated, and you're better off for it.

https://news.ycombinator.com/item?id=14594858

there are some hard decisions to make along the way, but they depend more on self-knowledge (what's the minimal lifestyle I can accept? how much risk can I tolerate?) than a technical understanding of investment vehicles.

I was the child of two immigrant parents. Growing up, we were always on the verge of bankruptcy as a family. Always about to miss a mortgage payment or a payment behind. Yet I grew up in a wealthy New York suburb so I was surrounded by a lot of kids described above, whose parents were overjoyed to teach their kids financial principles using inherited family wealth.

I got lucky in my own way. By the time I was 15 or so, I knew how to program a little, and was already an avid internet user (this, in the late 90s). Thus, I could do a little programming, and do web design projects for money.

So I started to build up savings, real cash savings, by the time I was 16. But then, it dawned on me: my parents weren't going to be able to afford sending me to college. So, I knew I had to build up savings in the few years leading up to freshman year to pay for college.

Then, I got into college (thankfully with a big scholarship) and dumped my savings into tuition and living expenses. I also continued working through college and took on student debt. By the time I was 19 or 20... I was very interested in finance. But I still operated entirely on a cash and debt basis. With $100K in loans, depressed savings, and parents entering retirement age with no savings other than the home equity they had in my childhood home. It's at that moment that some financial education would have helped me a whole lot.

I bring this up because I consider myself fortunate. People less fortunate than me never manage to build up any savings whatsoever in high school, and, if they are so fortunate to go to college, are drowning in way more debt and student loan payments than they can afford. By the time they enter the workforce, they are still digging themselves out of that debt, not yet thinking about the marvels of savings, capital investment, rate of return, and compounding interest. I worked for a couple years on Wall Street and made every mistake possible in this regard. I saved money in a 401k with crappy allocations that didn't perform well, leading into the 2008 financial crisis. I did an early withdrawal on that 401k to self-fund my startup. I operated on a cash & debt basis for years while earning sweat equity on that startup, and never diversified personally until very late.

I suspect for most young adults in a wealthy country, the moment when finance education would make the most impact is either senior year of high school or in college itself, or in the first year or two of work. If you teach it any earlier than that, it'll be in one ear, out the other.

When I used to work in Brooklyn, the local library held financial literacy courses targeted at young adults in NYC, scheduled for after work hours. I attended one and it was very well put together, and very well attended. I think that might be the best timing/setting of all for this.

In my opinion kids were and are taught way too many ancillary or even dubious (sheer propaganda) stuff, and not enough fundamentals (arithmetic being one, critical thinking another, logic, collaborative work...).

I wonder if at some point we need to pivot to teaching that the knowledge is out there, and when you might need it, rather than exactly how to do "complex thing x".

You could take your internet connected computer into an exam, be given some problem that is unique to your test, and you research, learn, and calculate the solution on the fly. That's kind of what I do all day at work.

I'm damn near middle aged. Taxes and investment are a mystery to me. I have enough money for it to be relevant. My main problem is probably that I have a distrust of anyone who would want to give me money advice.

So, if tomorrow all of this changes, you'll have millions of people with really useless knowledge. And who changes these things? Politics. This is politics. Won't it be better that people learn about politics, philosophy and history so that they have the tools they need to actually understand and change the world around them?

When those value opportunities are mutualistic (I.e. financing a new venture) its doing its job in a way that benefits us all.

The problem is that much of modern finance generates value through extraction rather than a mutualistic gain.

For example a private equity firm displacing a union contract; or squeezing suppliers; or jacking up drug prices.

Mortgages and car loans are pretty simple due to heavy regulation ( they have to show the total interest, how much you will end up paying in interest over the lifespan, etc.), what's there to learn about them?

This will to complicate things more than they need to comes from banks pretending that they are "cool again" and have all sorts of different products, when in reality banking is the most boring thing ever invented: here's some money now, you'll give it back to me at a later date with an interest.

Moreover, by your remark "communist utopia" you're perfectly showing that I'm right in calling for more literacy about history, philosophy and politics. This isn't communism in any possible form, au contraire we're still moving well within the boundaries of capitalism.

communism isn't about abolishing money, or debt