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Jun 14

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Time to start teaching basic personal finance in high schools

A recent survey discussed here found that a surprising number of college graduates regret their decision to attend college. Not that it wasn’t lots of fun. Plenty of that. Not that lectures lacked stimulating learning. Ample stimulation. It was all good, just obscenely overpriced.

The world has no shortage of buyer’s remorse. But typically the remorse is from purchases that cost less than six figures and require fewer than four years of a person’s life.

Attending college is rather unique among large purchases because the buy decision typically occurs at such a young age–during or right after high school. This tends to be long before the buyer has learned anything about big-money decision making or has had any personal experience with debt. Lack of experience and knowledge combined with a culture that believes college is the right course whatever the cost makes it understandable why so many people are finding a diploma in their hand and regret in their heart.

One partial solution would be to start teaching personal finance in high schools. Shortly after graduation, high school students face massive financial decisions that extend beyond the college decision. Using credit cards without parental supervision, buying a car, and beginning to invest excess earnings (i.e. income not used to pay down student debt) are a few of them. Having some introduction to compound interest could prove handy, at least as handy as high school biology or history class.

About the author

Eric Madsen

Mr. Madsen is a Chartered Financial Analyst (CFA) charterholder and a Manager at Fulcrum Inquiry, a finance and economics consulting firm that performs economic damages analysis involving commercial litigation, financial investigations, business valuations, and forensic accounting. He also holds an MBA from the UCLA Anderson School of Management and a B.S. in Economics. He conducts expert analysis in finance and economics. Mr. Madsen may be contacted at 213.787.4122 or at emadsen@fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/06/time-to-start-teaching-basic-personal-finance-in-high-schools/

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