Over the last few months, I've become very interested in the teaching of consumer education in high schools, especially as it pertains to preparing high schoolers for the challenges that they'll face in the real world: going to college, paying for college, buying a car, buying a house, dealing with debt, finding a good job, spending less than you earn, balancing a checkbook, managing your money, and so on.
I am a firm believer that the reason many people find themselves lost financially is that the basic tools needed to know how to manage money isn't taught to them during their childhood. Some children are lucky: they have parents who manage to deal out the necessary lessons. Other children aren't so lucky and they wind up out in the real world without the vaguest idea of how to handle their paycheck - and that often results in years of confusion as they learn to ride that bicycle.
I should know. My consumer education came well after my school days were done and was delivered by learning from mistakes - some big mistakes. I floundered around for years before finally picking up enough pieces of the puzzle to really understand how, as a consumer, I could function in society successfully and build up my piece of the pie.
That's a shame.
No student should leave school without the basic knowledge they need to get ahead financially - or at least keep their head above water. With that belief, I started digging into the realities of high school consumer education.
The first thing I discovered is that consumer education standards vary widely from state to state. Some states have a good program with mandatory consumer education. Other states offer no consumer education at all. Most states fall somewhere in the middle, with slight requirements but without the meat on the bone for students to really take home solid lessons.
The second thing I discovered is that the curriculum taught in many classes seems to be almost arbitrary. Here's an example of the goals of consumer education class taught in Tennessee:
1.0 Students will analyze interrelationships of economic systems, consumers, and
2.0 Students will analyze relationships between the U.S. economic system and consumers.
3.0 Students will integrate knowledge, skills, and practices required for management of resources in a technologically expanding global economy.
4.0 Students will examine skills necessary for informed purchasing, solving consumer problems, and understanding ethical consumer issues.
5.0 Students will assess financial institutions and demonstrate appropriate financial management strategies.
6.0 Students will examine practices that foster financial security for individuals and families
across the life span.
7.0 Students will analyze the role of credit in personal and family financial management.
8.0 Students will apply management principles to personal and family decisions concerning types of insurance needed to contain and manage loss.
9.0 Students will integrate knowledge, skills, and practices required for careers in consumer economics.
10.0 Students will demonstrate leadership, citizenship and teamwork skills required for success in economic roles as consumer, producer, and citizen.
I understand the logic behind this basic framework, but much of it doesn't teach basic consumer education to students. The first three are better suited to an economics course and the ninth and tenth options are nice but don't really help teaching students how to succeed with their own money.
My feeling is that such curriculae fail the students (at least in part). Depending on how the above material is taught, very little real material
I'd like to propose a different curriculum, and I'd like you to help me with it by criticizing it and offering suggestions. I'd like to eventually flesh this material out into a guide that could be made available for download to assist high school teachers and other individuals who are interested in teaching the basics of consumer education to their children.
What Should Be Taught?
I think it's a good idea to start with my old post on Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards. You could really break this entire curriculum down into just four small pieces.
Spend Less Than You Earn
The introductory part of the curriculum could focus just on this one little element. Show quite visually what happens when you spend more than you earn, spend the same amount you earn (living paycheck to paycheck), and spend less than you earn. Give some real-world examples of each by showing stories of real people in bankruptcy, living paycheck to paycheck, and getting ahead.
This could cover areas of how to prepare for a job, write a resume, fill out a job application, and so forth. It could also cover the value of going to school, figuring out what you should be studying (using some good stuff from What Color Is Your Parachute?), and the basics of what to expect in the real world. One could touch on things like passive income, starting a side business, and things like that as well.
This is where the "consumer" part of the consumer education comes in, covering things like how to spend less at the grocery store and the department store, how to research a purchase, the amount of cash you can save by making these little moves, how to deconstruct the cost of various bills, and so on. Throw the expenses of normal life up there and look at how they can be reduced. Deconstruct some advertisements so they can see how they work.
Managing the Gap
At the same time, show how this spending needs to be put in the context of your income and where it can be kept. How does one balance a checkbook? How does one develop a very simple budget? What does one do with the left over money (NOT just spend it)? How does one use a credit card effectively? What's the value of a savings account? One could even touch on investing here just a bit.
To me, these are the tools that kids need out of a consumer education class, and materials like this should be taught in every high school.
What elements do you think are important in a high school consumer education curriculum? What's not taught in schools that should be? I'm interested to hear your thoughts.