As the Washington Examiner reported this week, South Carolina’s Legislature has, at long last, added personal finance classes to the state’s high school curriculum. Over a dozen other states already do this, but all the rest should start right now.
The fact that personal finance is not taught in high schools in all 50 states hasn’t made sense for decades now.
Bad finances are a leading cause of divorce. They break up families and ruin lives. And poor decisions about money based on ignorance leave so many people with destructive, resentful feelings and a false sense that they never really had a chance to succeed in life.
If more people were given the information they needed to make good financial decisions, class warfare wouldn’t even be a thing. It’s the perfect antidote to toxic, destructive ideologies like critical race theory.
I’m glad that high schools teach people the Pythagorean theorem. I’m glad they teach them that Kathmandu is the capital of Nepal. I’m glad that many of them still have students read Mark Twain and Shakespeare. But today’s students are much, much more likely to need financial know-how in their lives than they are ever to use any kind of geometry, geography, art, or literature.
For most people in this country, the lessons they need are truly fundamental. Credit card debt at interest rates above 20% (and that’s on the low end) is so destructive of the American dream that it is depriving millions of the ability to build up anything for their families or for their old age. I was lucky here — the need to pay on time every month is something my parents drilled into my skull.
But this isn’t just a topic for the children of debt-ridden, lower-income families. There are a lot of lessons that middle-class and wealthy students need to learn as well. How do you manage a household budget? How do you ensure that you will be eligible for the best possible mortgage?
I personally feel like there are a lot of things I wish I had learned that I never got in my own Catholic and private school upbringing. And I know similarly situated people who are not taught the fundamentals of personal finance despite coming from middle-class or upper-middle-class backgrounds.
For example, most people are not aware of how retirement savings are skewed so heavily toward the money you save when you’re young. The money you save for retirement when you’re young has many additional years to grow, and that can make it exponentially greater than what is saved when you’re older.
I started saving for retirement in the 401(k) offered at my very first job that had one. But if someone had explained to me the advantages of Roth IRAs, I would have started there instead. More to the basics, if someone had explained to me that each dollar saved at age 20 could grow to $88 by the time I retired, I probably would have been much more inclined to stretch my budget in order to save the greatest amount possible at that age.
This isn’t just a personal issue either — it is a political issue. The reason so many people grow up thinking the game is hopelessly stacked against them — the reason they grow up resentful and blame capitalism or America or something else stupid for their troubles, or do something else harmful like vote for Bernie Sanders — is that no one loved them enough to show them what to do with their personal finances when they were young. Wouldn’t you feel resentful and like the game was rigged if you were playing a game that everyone but you seems to understand?
I’m glad South Carolina is doing this and that other states such as Virginia, North Carolina, and Tennessee are doing so as well. But I wish that all 50 states were already doing this now.
