Teachers have enough to do. That’s what a lot of people say when it is suggested that we incorporate financial education into our school system. Let educators focus on the three Rs; leave lessons in personal finance to parents. After all, every family’s values and resources are different.
At first blush, this approach seems to make sense. Some researchers believe that kids who graduate from college tend to figure out personal finance anyway. Meanwhile, just one in five teachers feels qualified to teach kids about money. So let schools do what they do best: prepare students for higher education.
But the very suggestion that financial education has no place in our schools rankles financial literacy advocates and elicited groans from a recent panel diving into the issue. As moderator of the panel sponsored by accounting firm PwC and online educator Knowledge@Wharton High School, I was delighted to play devil’s advocate—and draw out a robust defense of teaching kids about money in school.
“The answer is no, this should not be left to parents,” said Annamaria Lusardi, economics professor at George Washington University. “We don’t ask parents to teach math and physics and history. Why would we ask them to teach financial literacy?”
Personal finance is emerging as a new core subject area for many schools. Policymakers around the world see it as a step toward avoiding the next economic meltdown, and advocates say learning about things like budgets and credit cards is no less important than reading, writing and arithmetic.
“If we leave it to the parents, we are accepting that we have an unequal society,” said Lusardi, who is regarded as a global leader in the financial literacy movement. Her research has shown that familiarity with financial concepts accounts for as much as 50% of the wealth gap between affluent and low-income families.
Other panelists weighed in with equal fervor. “We owe an education to our children in many different areas,” said Georgette Phillips, vice dean, undergraduate division at Wharton. “This is just one of them and we should not put it on a different standard than the other pillars of a well-rounded high school education.”
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Financial education is a critical piece of what PwC looks for as it hires 4,000 young people each year, said Shannon Schuyler, PwC’s corporate responsibility leader. “They need to have some background in this area regardless of whether they are going into accounting, finance, IT or HR. This isn’t something that is just nice to have, and so we’ll leave it to parents. This fundamentally affects our marketplace and our economy.”
But you can’t leave the parents out, said panelist Brian Page, an award-winning economics teacher in Reading, Ohio. “Money is personal,” he said. “This can be threatening. You have to approach parents as partners.” When parents see what you are teaching they usually get on board, Page said, and by being engaged they often end up learning as much as their kids.
Everyone agreed the movement to teach kids about money isn’t progressing fast enough. By some measures it’s even stalled. But as Lusardi said, “it’s an essential topic” that should be taught in every school. I think of financial education as “Reality”—and call it the Fourth R. A growing number of educators think of it that way, too. But with only 14 states requiring that a course in personal finance even be offered in high school, we have a long way to go.