financial education

Why the Education System should make Financial Education a…

The more I think about it, the more obvious it is that the education system is flawed.

Of course, specific courses are valuable because they lead to specialized careers.

But for the most part, the education system needs to make financial education more of a priority.

In its current state, the subjects taught have no application for real life, there is a failure to accommodate unique personality types, and it also creates student loans.

To sum it up, the education system does not create smart, successful individuals, it creates corporate cogs that are in debt.

The Education System Is Flawed - Here's The Fix Click To Tweet

It Begins During Elementary School

I was fortunate enough to go to a small elementary school, so I’m unable to comment on the issues with oversized classrooms.

However, there are two main problems that I’ve concluded with this stage of the education system:

Subject selections and accommodating individual learning styles.

Of course, english and math are important, But some subjects taught bore an uninterested student out of their mind.

Solution: Continue to teach important subjects such as math and english. But allow students to choose electives for the rest of the time. Include more unique classes. For example, students interested in video games should be able to study the video game industry.

The Subjects Taught are NOT Applicable to Jobbing

As I mentioned, specialized education is applicable to jobbing.

On the other hand, most courses teach you absolutely nothing about what day to day life looks like in a career.

Furthermore, elementary and high school need to do a better job of preparing students for college and university courses!

Progressive Development – Preparation for the Stages of Life

There needs to be a more progress orientated approach to prepare students for the next steps in life.

Elementary school should be explorative. It should still focus on teaching the fundamentals, but it should allow students to start narrowing down interests.

Similarly, high school should take students interests one step further. It should allow them to begin narrowing down their interests to fewer subjects. This would allow students to gain a better understanding of what they truly aspire to do for a career.

In addition, high school should prepare students for college life and the importance of choosing the right career.

Most importantly, it should begin to lay the foundation for an understanding about money. Since high school is typically when people begin working, it’s the perfect opportunity to teach how money is a tool.

Yes, history is interesting and an important part of culture. But we have the internet now to explore hobby-like interests.

Though I enjoyed history classes during school, learning about personal finance is more applicable.

Student Loans

In my opinion, student loans are the absolute worst part of the education system.

To put it bluntly, giving a student a lump sum of money is flat-out stupid!

I’ll admit that I was dumb as hell when it came to managing money during school.

All in all, students are not prepared for the financial obligation, and it encourages students to get used to debt.

In short, the obligation causes students to become comfortable with debt. And that eventually leads to feeling like making payments is normal.

In addition, the education system is flawed regarding how it delivers student loan payments. For example, student loans are typically deposited once per semester, which is not how the real world operates.

If student loans were paid logically, payments would mirror the students industry-specific career to help prepare them for managing money after school.

Ideally, tuition costs would be subtracted first, then bi-weekly payments would be made.

This set-up would allow students to practice managing income more appropriately. Furthermore, this could coincide along with a course on personal finance.

The lack of Personal Finance Classes

Personally, I find the lack of financial education appalling.

Useless information is taught instead of personal finance, which is required to get through life!

It would be extremely valuable to include courses on the following subjects in school:

  • Budgeting.
  • Investing.
  • Investment products.
  • The power of compound interest.
  • General banking products.
  • The impacts of borrowing money.

Moreover, education on personal finance would be extremely valuable regardless of what career is chosen.

The Benefits of Financial Education

Frankly, the education system is one of the most genius business models of all time – they give you a piece of paper in exchange for thousands of dollars.

By the time you finish school, you make payments to them for the next 10 years, but they don’t even have the decency to teach you how to make a bill payment.

Nevertheless, the benefits of financial education are overwhelming.

Not only would students be able to make better choices with courses, they could avoid the ridiculous choices the previous generations made with student loans.

Furthermore, I’m certain that financial education on the power of compound interest would’ve been life changing for me. It would’ve changed my focus and direction to know I could take a course about dividend investing.

Lastly, financial education on debt would be extremely beneficial.

Folks should be made aware of the impact of interest, and they need to understand how adding payments will reduce cash flow.

financial education

Concluding Thoughts

In my estimation, a huge detractor to saving money is not knowing what to do with it.

I feel fortunate because I have a personal interest in investing. I don’t even enjoy spending money on most things to tell the truth. I’d rather buy stocks.

But without an interest in finance, saving for anything besides a house can be intimidating.

In addition to the points mentioned above, it would be beneficial to include more affordable online options for education.

The education system should be in the students best interest, not the Professors.

In conclusion, I believe the education system will eventually make financial education a priority. Until then, there are books and an abundance of amazing personal finance bloggers to read online.

Thanks for reading! 🙂

Questions for the readers: How important is financial education? Does more of an emphasis need to be placed on financial education?

12 COMMENTS
  • alana
    Reply

    Hey RTC, great job on the blog update. Could just be my eyes but I find the new font hard to read. 2018 is already off to a great start, would hate to miss all the great content you have coming our way. Again, if no one else has mentioned it, could just be me…

    1. graham@reversethecrush.com
      Reply

      Hey Alana,

      Thanks for taking the time to comment! And thanks for your feedback on the blog update. I agree that the font is a little small. Perhaps I’ll consider increasing it for future posts. Thanks for the heads up and happy to hear you enjoy the content. Have a great weekend!

  • Tom @ Dividends Diversify
    Reply

    RTC, I agree and you have to start some where with personal finance education. The educational system has not adapted from when a person worked 40 years then went on a pension and social security. You didn’t need to know much in those days. The challenge is like most education topics, kids with no money and little interest in building financial independence in their teens, will probably not be all that engaged. But again, you have to start somewhere. I’m just not sure where and how to make an impact. Tom
    Tom @ Dividends Diversify recently posted…Work, Save, Invest, Build Wealth, but Never RetireMy Profile

    1. graham@reversethecrush.com
      Reply

      Thanks for commenting, Tom! I was just reading your most recent post where you mentioned you teach at a local university. That’s awesome. I appreciate your feedback especially considering your experience. You make an excellent point about how the education system has not adapted to all the recent changes. I never considered that. And that’s also a good point about students would lack interest because they lack funds. It’s definitely challenging to incorporate financial education into the education system. But I think it should be discussed and figured out. There are folks out there that don’t understand purchase interest or how credit cards work let alone the investing side. Thanks for sharing your thoughts!

  • Jordan @ moneymaaster.com
    Reply

    I actually recently wrote a similar blog post about the same thing in my home province. Agree 100%.
    Jordan @ moneymaaster.com recently posted…The “Not So Wealthy Barber” & Some Thoughts On Financial Education.My Profile

    1. graham@reversethecrush.com
      Reply

      Thanks for taking the time to comment, Jordan! I’m glad you agree. I’ll be sure to check out your post as I’m interested to hear your thoughts on the subject. Have a great week!

  • Mrs. Defined Sight
    Reply

    RTC! Agree 100%
    I can still recall a health class in 7th or 8th grade that emphasized nutrition and budgeting calories throughout the day. Turns out what we were eating during the day and night, didn’t allow us to eat anything for breakfast or else we would be “over-budget” on our calories!

    It was quite an exercise, and budgeting all these calories, and planning your meals and counting them out for the week. An eye opener for sure.

    Do I recall a similar exercise in budgeting money and finance? No. Not in my entire elementary or HS education. One can about imagine if we would have actually had a worthwhile exercise with monopoly money, and having to extract taxes, health insurance, car payments, rent, etc. and if there’s anything left over – are you going to save or invest, How much of an eye opener that would have been and prepared kids better for adulting!

    1. graham@reversethecrush.com
      Reply

      Thanks for commenting, Mrs. Defined Sight! And thanks for sharing the excellent example. Seeing how you remember an exercise like that years later, I think a similar exercise would definitely be beneficial. It boggles my mind that this essential skill is not a mandatory class. Although students may not have the money to manage in high school, I think it would still be practical experience. And it might spark interest in finance earlier for some students. I know I would’ve appreciated the opportunity. I think your monopoly example would be the perfect solution. Hope you’re having a great week!

  • Ms ZiYou
    Reply

    I agree, schools everywhere are not preparing kids for the real world. We’re focused on getting kids to pass exams, rather than life skills!

    Although we need to make sure we don’t go back to the old days where we taught girls to cook and clean and boys how to fix cars.
    Ms ZiYou recently posted…What prevented me earning six figures earlier in lifeMy Profile

    1. graham@reversethecrush.com
      Reply

      Thanks for sharing your thoughts, Ms ZiYou! You are spot on in your assessment. Yes, we are teaching kids how to pass tests, but there are no practical life skills being taught at all…It’s bizarre. Great point about going backwards. I certainly hope that doesn’t happen either. I think the focus needs to be on individual skills and interests. Have a great week!

  • Leo Tat
    Reply

    I agree with everything you say about education. The thing is though, I have a suspicion it is designed that way. Let me explain, if people learn the vehicle to be financially independent then they are less likely be loyal employees. This is what the corporations require, and the society needs.

    I would also extend it further that the education system is a failure in teaching life skills such as human skills and critical thinking.
    Leo Tat recently posted…Eating Avocado Is Good for You: 23 Health Benefits and Nutrition FactsMy Profile

    1. graham@reversethecrush.com
      Reply

      Thanks for sharing your thoughts, Leo! I agree with you 100% that the education system is by design. You hit the nail on the head. It took me a long time to grasp that 95% of people need to be told what to do with their lives. And the education system definitely fails to teach essential life skills. I’m not sure how some of the subjects taught are more important than health, diet, and personal finance. I could’ve been a lot more engaged with more practical subjects in school. Take care!

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