Why Is Personal Finance Not Taught in High Schools

phocus on 14/03/2018 - 09:56

As I get older and talking to coworkers, friends and family about finances. It appears that there is a significant population that don't understand basic finances, like budgeting, investment, loans, super, etc.

This seems like a pretty basic life skill that all people will need to encounter in life in order to live in this day and age. Why is this not a subject in mandatory in most high schools?

It pains me to see people living above their means. Sure its intuitive not to do that, but some people don't understand even basic budgeting to make ends meet.

Financial

Comments

  • dogboy on 14/03/2018 - 10:10
    +1

    Because the education industry is completely out of touch with the real world, from schools to universities.

    • D C on 14/03/2018 - 11:40
      +1

      completely out of touch with the real world

      Which is why companies are forced, yes forced, to charge for internships: https://www.smh.com.au/politics/federal/companies-defend-cha…

      Almost half the interns "disappear" after just one week, he said. He doesn't have time to ask why but knows it's because "they're not prepared for a working environment".

      Oh yeah, you're really on the ball there buddy. All hail our all-knowing corporate overlords.

      • syousef on 14/03/2018 - 17:47
        +2

        Well if you're going to charge me money to work for you, I'm going to disappear much sooner than "after just one week". No wonder only 1 in 64 was hired. Who wants someone working for them who's either too stupid to know what they're worth, or worth nothing to begin with.

      • ColonialBoy on 15/03/2018 - 20:28
        +1

        http://industryplacements.com.au/#program-info

        "Enquire about Immigration"

        All these paid internships are elaborate scams, marketed towards potential immigrants, and designed to meet the criteria for permanent residency.

        Apart from special cases for training (nurses/teachers/doctors/dentists), people have to be paid for work in Australia. You need to be covered for workers compensation, and to do that you need to be paid.

  • Trying2SaveABuck on 14/03/2018 - 10:11
    +2

    Many reason i agree with unclesnake they dont want people to be know how to manage there finances.

    the 2nd thing it the is a lot of greedy crooks ie the big banks they spend a load of money to ensure they're well marketed.

    If you read the barefoot investor his opinion on the CBA dollar program in primary school is a prime example of setting people up for financial ruin in later life.

    3rd the older generation dont understand basic finance either - remember most people didnt have internet growing up they couldnt just click a few buttons to compare interest rates. We might think it is easy now but it has only really been easy the last 10-15 years it takes generations to filler down sometimes i remember going for a loan and my dad basically only knew westpac, CBA and ANZ at the time didnt understand that there were multiple lenders didnt understand what a non-bank leader was etcs

    4th Mortgage brokers /Financial advisers/other BS - most of these people are simple looking out for themselves. i have talked to A LOT of people about loans and when i tell them who im with and what i pay most people look at me like ok well im going to talk to a brokers who have always ended up sign them on to a rate higher then mine??

    Bottom line is most people are stupid and like the Real Estate industry the Financial services industry in not regulated properly

  • dasher86 on 14/03/2018 - 10:14
    +2

    In year 10 they taught budgeting at my school.
    I remember we had to run a small business with the aim to make a profit or break even.
    we had starting funds and we could 'loan' more if we wanted to.
    there was also a budget in place.

  • qwerty on 14/03/2018 - 10:16
    +3

    Im pretty sure financial mathematics is part of the curriculum one of the earlier years year 7 or 8 maths that covers the basics of budgets , loans and investing and then again in more detail if the student does the easier math subject in their hsc/vce

  • coco1458 on 14/03/2018 - 10:21

    I think the less people know about actual real life skills, the more employment there is in those needed industries. If everyone knew basic mechanical engineering and tax returns there'd be a lesser need for those trades.
    But in the modern day of information and technology, you can easily watch how to service a car or read up on the internet on how to do your tax return yourself.

    • Scrooge McDuck on 14/03/2018 - 15:56

      Mechanical Engineering is not Motor Mechanics.

      • coco1458 on 14/03/2018 - 16:14

        My apologies there

    • kingmw on 14/03/2018 - 20:15

      I agree and think most people are either lazy in this regard or procrastinate forever because there is no set deadline to achieve this.

      My incentive to learn was so that I didn't need to pay an accountant a few hundred dollars a year and have probably saved thousands as a result especially if you have a simple tax return (the majority of taxpayers). If more complicated, then just read a couple of relevant ATO guides (very informative) which will bring you up to speed in no time.

      • coco1458 on 14/03/2018 - 20:21

        I agree there! It really isn't that complex if you have basic numerical and comprehension skills + a call to the ATO if you don't understand something isn't that hard.

  • mick123 on 14/03/2018 - 10:22

    Because they are too busy teaching them such important real world topics like the patriarchy, gender studies and lesbian dance theory..

    • [Deactivated] on 14/03/2018 - 10:30
      +4

      You sir are wrong!

      (They teach that on a university level).

      • SupeNintendoChalmers on 15/03/2018 - 13:45

        HOW DARE YOU ASSUME mick123 GENDER!!

        • [Deactivated] on 15/03/2018 - 14:14

          Sorry. I'm obviously micro aggressing. I will apologise to ze (gender neutral).

          I respect your opinion and will check my privilege.

  • [Deactivated] on 14/03/2018 - 10:27
    +8

    Schools and parenting are not interchangeable.

    The role of the school is to teach a common syllabus, common being broadly covering all aspects required for a career choice in the future.

    Managing money is a cultural thing and should be left to parents to do. I do not want schools teaching my kids about money because I think Australia generally really suck with money.

    Substantiate? Our government has to impose forced savings through superannuation. We have the highest personal debt in the world. We depend on welfare if we become unemployed. The list is awfully long.

    Notice how I'm saying we because it is a societal problem and I'm part of that society.

    Even our government sucks at money. Look at all the projects that run over budget by multifold yet we keep allowing these same companies to tender for projects (yes it's corruption too).

    I learnt my money management from my parents. Don't spend (some will conflate that with a home/business loan) what you don't have, identifying assets and liabilities, and ultimately being self reliant. I'd kindly ask schools to not teach my kids about money.

    • phocus on 14/03/2018 - 10:33

      Would you be ok with schools teaching the fundamentals on how different strategies of personal finances. Not on particular way is best but more from a point of view that these are some of the ways people manage finances and let them make the choice?

      Also maybe how different finances work, such as super, wages, tax, investments, interest, rates?

      • [Deactivated] on 14/03/2018 - 10:43
        +1

        Schools do teach financial studies. Financial studies and money are not the same. Financial studies are already offered in school (at least in my public school).

        Financial studies will not teach you how to live within your means. They teach the mechanics of specific institutions. These are non essential knowledge that are good to have.

        Financial studies is knowing the price of a dollar. Money management is knowing the value.

    • Lifeinflow on 15/03/2018 - 18:23

      I can't say I agree that relying on parents is the best way to tackle this problem. Good parents will do a better job than a school of course, but a child from a family with problem gambling or spending is put at a huge disadvantage as they were never shown a better way.

      The goal of school should be to provide a minimum level of academic, social, psychological and financial education to have a baseline from which an individual can be successful and fulfilled in life. Many people don't have the positive family environment to provide this and school aids in bridging this gap.

      • [Deactivated] on 15/03/2018 - 19:09

        Just because some children have crappy parents doesn't put the responsibility on the rest of society to cater to the lowest common denominator. It's a harsh reality and I'll probably cop a lot of hate for this but I don't want my kid being taught shitty values just because someone else can't be bothered teaching their spawn.

        The primary function of our common education system is to prepare a child with academic basics. The secondary function is for a child to socialize and thus learn social etiquette.

        Moral values, money management, religion and/or spirituality, sex… These are things best left to parents to decide upon. Imposing the school's chosen values by default may benefit neglected children and excuse negligent parents from their parental duties but that shits all over the values of parents who actually do their job.

        PS. Re bridging the gap - in Australia, we are all offered equal opportunity to succeed. There are no legislated discrimination between races, classes, nor gender (except for affirmative action re Aboriginal and Islanders). There's a social security system that provides free money, shelter, food and healthcare for the poor. All the hippies that are fighting to "bridge the gap" are not fighting for equality, they are fighting for equity. They're just too ignorant to realize it or they have vested interests. Taking money from those who work to redistribute it based on what someone in office thinks isn't morally righteous, it's actually wicked.

        • Lifeinflow on 15/03/2018 - 23:26

          I'm not making a comment on values which people could disagree on. I am making a comment on skills beyond the purely academic and towards life skills. That means learning and having a greater awareness of different options/choices and consequences. No need put one forth as better than another or make moral claims. For example I'm for a more in depth understanding of financial specifics of the Australian tax system and how to intelligently structure your tax return, or even that that is a possibility.

          Regarding equity/equality the goal is equity in opportunity, and understanding being born into a low sociology economic status or into a poor family environment etc. has a negative impact. After the opportunity is given, sure, if you don't work and have the ability to do so, then the rest of society shouldn't be paying for that.

        • [Deactivated] on 15/03/2018 - 23:41

          @Lifeinflow:
          There is no such thing as equity in oppurtunity.

          I want to play in the NBA. I'm not 6'6 and you're not making me 6'6 but you can't lop off someone's legs so I have a fair shot.

          I want to be a model. I look like a Hobbit. You can't go around throwing acid at people to make me look better.

          I want to write a profound book. I have the literary word stuff of an average person. Can't go around forcing people to do keggers.

        • Lifeinflow on 15/03/2018 - 23:54

          @tshow: Sure, there's no such thing as universal equity in opportunity. That doesn't mean it isn't worthwhile to maximise equity in cases where physical or cognitive attributes are equal. I.e. your typical person of average intelligence, average health and average looks could have a vastly different outcome in life depending on whether they are born into an upper middle class family, or into a lower SES family with parents who have a gambling problem. Sure, it's the parents' responsibility but equally, are you willing to condemn this child to what is likely to be a significantly more difficult life than the child who happens to be born luckier.

          Would your answer change if you were the second child?

        • [Deactivated] on 16/03/2018 - 00:14

          @Lifeinflow:
          If I were the second (disadvantaged) child, I'd definitely want to change the answer but wanting change doesn't necessarily mean change is to be had or to be better.

          It's easy to make rules that apply to some but laws apply to everyone equally. If you pass a law that dictates schools teach money management, who gets to choose what is taught? The government has a vested interest in keeping people in debt yet they are in the best position to impose their values. That eduction may not necessarily benefit the child that had absent parents but it certainly is detrimental to my children.

          If we pursue "maximised equity" where do we draw the line? With equal opportunity, we can define the law. If we look to maximise equity, that's a sliding scale and when something cannot be defined, it cannot be legislated and is open to corruption.

          What you propose is a Utopia where no one gets left behind. That's a beautiful notion and it comes from a good place. Some people will get left behind and there's nothing we can do about it. We can force values to kids in school, there will still be kids who do not attend school. We can force kids to attend school, there will be kids who cannot focus due to domestic abuse. We can remove these kids from these homes, these parents will create more of them.

          At some point, we have to accept that equity is unachievable and we should do what's best, provide oppurtunity equally accesible to everyone. Money management books are available in libraries, self improvement courses are readily available in many community hubs, internet forums like this have plenty of ideas being shared. None of these oppurtunities are exclusive to anyone and that second child you speak off has that education available to them as it is.

        • Lifeinflow on 16/03/2018 - 00:44

          @tshow: Thanks for the detailed response. It gives me good insight into your thoughts.

          I'd like to reiterate, I am not proposing any potentially controversial values are taught. Simply that fact based financial skills are taught in a compulsory and more in depth manner given knowledge in this domain is important in everyday life. However, I'm interested in what particular poor governmental values you are expecting will be slipped into the syllabus.

          Regarding the utopia, I'm a realist, of course it won't reach some magical endstate of absolute equality. Nevertheless, that doesn't mean there aren't a number of valuable aids which could still be provided to children to reduce (not necessarily eliminate) that gap.

          The increased accessiblity of information is one of those things. However it is insufficient, alone, to allow the child with a poorer upbringing to utilise it to its full potential. It is a learnt skill to know where to look and what to trust.

        • [Deactivated] on 16/03/2018 - 11:00

          @Lifeinflow:
          Money management is a controversial issue. It is controversial between the government and the consumer - the government wants us to spend more and ultimately pay more. Banks want us to borrow more. Businesses want us to buy regardless of whether it useful or affordable.

          The government will include their agenda into the syllabus. They've managed to sell the idea of superannuation. This a forced savings that is typically controlled by someone else. Most commenters here readily identify that superannuation isn't guaranteed. Historically, we have a case study here where we are forced to put money aside, relinquish control of said money, and surrender that the final withdrawal amount isn't guaranteed. That's not money management, that's absolute loss of control.

          Money management is controversial

          Sure, we can talk about saving and identifying assets and liabilities. This is already taught in school. Accounting is a VCE subject. There are many lower level subjects that touch on that topic too.

          If we want schools to include money management, we will have to talk about government regulations such as forced superannuation, pensions, social security… All of which the government will obviously be in favour of, and all of which is a "necessity" because of failed money management. It's a paradox. It is trying to learn entrepreneural skills from a community college. It can happen but it's not what we expect.

          We can establish that the resources are there, we can establish schools do teach students basic maths to decipher more complex concepts, so as far as oppurtunities go, the information is already available to anyone, whichever school of thought they wish to subscribe to.

          The job of the government and our education system should be to provide equal oppurtunity, not hold some back to achieve equity. Imposing poor values to kids brought up in a respectable home doesn't benefit anyone.

        • Lifeinflow on 16/03/2018 - 14:35

          @tshow: I think we're talking past each other now. I agree money management is controversial, although there are aspects of it which are not and these are the ones I recommend. Also accounting should be compulsory, it may well be exactly what I'm suggesting kids learn but I have no idea, both because of a lack of interest at the time and a need to do other subjects to maximise my school performance. Only learning finances prior to the final years of school is problematic as it is less relevant to children at the time and likely to be forgotten before it is utilised in a more direct context. But more importantly, basic financial skills learnt at lower levels are insufficient for the average person to intelligently manage their finances later on. E.g. being able to answer questions like, how do I set up a business with an abn if that is what I want to do, or how do tax write offs work etc.

          I think we disagree on whether it is possible to provide valuable assistance without it being detrimental to other kids. If it is poorly implemented as you suggest then I would be equally against it. I simply believe there are intelligent and fair ways of providing universally valuable information.

        • [Deactivated] on 16/03/2018 - 14:45
          +1

          @Lifeinflow:
          That's a fair assessment and I value your opinion.

          I would be in agreement if finance and accounting is taught in school. For all discretionary knowledge/values, I'd like the government to stay out of it.

  • Doggiie on 14/03/2018 - 10:33
    +16

    The real question is: Why is personal finance not taught at home?

    • D C on 14/03/2018 - 14:31
      +2

      Often the parents are dumber than the kids.

      • Scrooge McDuck on 14/03/2018 - 16:03
        +2

        If your children aren't smarter than you, you have failed as a parent.

        • mskeggs on 14/03/2018 - 17:42

          Sure, but some of us have a head start!

        • D C on 14/03/2018 - 18:19

          @mskeggs: Damn kids are getting too big for their britches, they need knocking down a peg or two.

        • peterw1 on 15/03/2018 - 16:00

          its called the obesity crisis and they knocked down more than 2 pegs

  • blitz on 14/03/2018 - 10:38
    +3

    Uh, we were taught budgeting from about Yr 8. That complemented my learning about money from my parents.

    • Scorpex on 14/03/2018 - 12:08
      +7

      You were taught to spell, too. This is a compliment about your use of complement.

      • Scrooge McDuck on 14/03/2018 - 16:06
        +1

        You too, were taught to use to and too and the differences between the two.

        • Scorpex on 15/03/2018 - 09:55
          +1

          I can even do it when wearing a tutu

  • dannyhc on 14/03/2018 - 10:38

    Just live off the overdraft they said

    https://www.theage.com.au/business/banking-and-finance/i-los…

    • c0balt on 14/03/2018 - 15:36

      She said it herself, she owned her home since she was 17 and didn't need the overdraft but kept using it. Sad how her ignorance cost her financial future.

      • dannyhc on 14/03/2018 - 16:07
        -3

        Yes the poor bank get ripped off by this old lady and her ignorance. It doesn't matter that she told them that she had NO INCOME to repay the overdraft because she sold her boarding room business but just live off the overdraft they said!

    • kingsville on 14/03/2018 - 16:30
      +1

      being charged 18% in 2007 on a loan secured by a house - that is robbery!

      • dannyhc on 14/03/2018 - 16:40

        According to the latest ad campaign it's ok for Banks to charge exorbitant rates because 80% of profits go back to shareholders, everyone's houses belong to everybody! Just let the Banks redistribute the wealth!

        • Trying2SaveABuck on 15/03/2018 - 13:20

          Where do you think those CEO bonus come from…

  • Seraphin7 on 14/03/2018 - 10:56
    +1

    This is an awesome question. I believe greater emphasis should be given to this topic throughout the school curriculum, starting at primary school and continuing through most of high school.

    Development of a syllabus around this topic would create high school leavers who at least would have a basic financial literacy that would enable them to have far better conversations with providers of financial products and have a much better chance of not finding themselves in situation "because they didn't know".

    • mskeggs on 14/03/2018 - 11:06
      +2

      Seeing as it is already quite extensively covered, what improvement would you make?

      • Seraphin7 on 14/03/2018 - 11:25
        +1

        Without going through a comprehensive review of what's in/out, all school leavers should be able to understand the following and noting that some principles are quite basic (primary school level) other more advanced …

        Concepts of basic budgeting, saving and deferred consumption
        Interest calculations on savings on loan products
        Present value/future value calculations
        Time value of money especially as applied to saving in early years and accelerated loan repayments … i.e. the lifetime value of building equity in early adulthood
        Concepts of P&I, interest only, balloon finance
        Concepts of secured/unsecured lending and the impacts on cost of finance
        Concepts of "lifetime" budgeting … i.e. what to expect as a young adult (pre-children), family/children phase, post-children phase, retirement phase
        Basics of the impacts of monetary policy
        Basics of general insurance
        Basics of health insurance
        Basics of superannuation and non-super investing
        Concepts of risk and return
        Concepts of asset classes and relating this to risk/return

        Probably others that don't come to mind off the top of my head, but these would be a good start.

        • dasher86 on 14/03/2018 - 11:51
          +2

          what would you switch out in favour of the above in the already busy curriculum?

          I believe these concepts are taught in high school.
          Concepts of risk and return
          Concepts of asset classes and relating this to risk/return
          Concepts of basic budgeting, saving and deferred consumption
          Interest calculations on savings on loan products
          Present value/future value calculations
          Time value of money especially as applied to saving in early years and accelerated loan repayments … i.e. the lifetime value of building equity in early adulthood

        • Seraphin7 on 14/03/2018 - 13:06

          @dasher86: I'm no expert in the totality of the curriculum and wouldn't even attempt to discuss what should be switched out. Not only does that risk getting into a spiraling debate about the relative merits of one element of education over another, but will also start wandering onto contemporary socio-ideological matters which won't go anywhere.

          That said, I think there is an opportunity to meld some of these matters into the mathematics syllabus (primarily) and perhaps look at how many mathematical concepts may be able to explained practically in terms of financial literacy, along with other practical applications.

          For example, illustrate to students the mathematical concepts of distribution analysis through analysis of investment returns. In such an example, students will learn the mathematical principles, the effects of risk and return over various time horizons, the inherent trade offs in making investment decisions, etc.

          Beyond that, simply talking to students about things they see all around them (and that are relevant to them) will go a long way. A top of mind example would be the analysis of various ways of purchasing a car (cash, straight term loan, balloon finance, etc.) dovetailed in with the cost of depreciation. You don't necessarily need to get into all the in and outs of other costs associated with car ownership, but simply understanding these matters and some of the terminology would be most helpful.

  • p1 ama on 14/03/2018 - 10:57
    +5

    I don't know why there is the view that school is meant to prepare us for life - if that were the case, then why don't we learn how to cook, clean, lift boxes, put together furniture, diagnose tech problems, raise kids, drive, look after our health…etc. at school? School is meant to give us the academic background we need to be productive workers. The rest are things that we have to learn through experience.

    The issue many have with money is not that they are uneducated about the topic, but rather, because they make bad decisions without thinking. We hear of the minority who have issues, but have we ever thought about the 99% of people who live completely normal lives without having any money issues? It really comes down to taking personal responsibility. The culture of "blame everyone else" leads to us not thinking about our decisions and/or just making poor decisions because we know we can shaft someone else at the end of the day.

    • mskeggs on 14/03/2018 - 11:14
      +3

      School is meant to give us the academic background we need to be productive workers.

      Well, no, although I do agree many people hold this view.
      School sets the foundations to allow you to learn throughout life to live better. A small part of that is using those skills for employment, but also to be an engaged member of the democracy, to support people around you, to raise better kids and to self actualise so that you can achieve personal satisfaction in your life without being held back because you lack skills to do so.
      This includes raw skills (reading, arithmetic), contextualising your place in the world (history, geography, science) and development of wide areas of your personality (sport, music, art, woodwork, cooking).
      And it also provides cheap day care.

      It doesn't really teach values, except those that are under pinned by the law. That part is still down to parents and individuals.

    • IceCreamBandit on 14/03/2018 - 16:25
      +1

      if that were the case, then why don't we learn how to cook, clean, lift boxes, put together furniture, diagnose tech problems, raise kids, drive, look after our health…etc. at school?

      Home Economics, TAS (Technology and Applied Sciences) and PDHPE cover all of the above in some way.

      • p1 ama on 14/03/2018 - 20:14

        Yes, whilst we are certainly introduced to those concepts at school, I don't think it's unreasonable to say that most of us learn those skills outside of school.

        Sometimes it's easy to forget that we actually don't spend that much time at school, despite it being a major part of every kid's life. Assuming around 10 hours of sleep and rest, then only around 7 of the 14 waking hours are actually spent at school, and probably only around 5.5 hours is spent in class per day. That means that a large proportion of a child's day is spent at home or elsewhere.

        I think the issue is not necessarily with schooling, but rather, that parenting styles and attitudes have changed over time. Not that long ago, kids moved out of home much sooner, got employed much sooner, generally started their own families sooner…etc. This means that at any certain age, the previous generation just had more life experience than the younger generation now does. More than ever before, parents are over-protective of their children, people are choosing to study for longer and are perhaps delaying the decision to move out or start a family.

        I've always believed that people "rise up" to the occasion. If you get pushed into a new situation, you learn to adapt and react and think. At the moment, it just seems that those opportunities are becoming harder to come by and schools/curricula aren't keeping up.

    • Illian on 14/03/2018 - 19:15
      +1

      I did learn all of that at school… It was all mandatory in the two years of high school before we got to choose our subjects.

  • mskeggs on 14/03/2018 - 11:00
    +6

    Looking at the comments here, it seems the underlying issue is "why aren't financial values taught at school?"

    I'd suggest that the school's role is how to e.g. compare a loan offering, not to tell you whether buying a car on credit is a wise idea.

    I have some friends who live highly leveraged, with car loans, mortgage, credit cards and personal loans for caravans and things. They would be dark if the school taught their kids this was foolish, and would rightly object that it isn't the education system's job to pass judgement on their finances.

  • dannyhc on 14/03/2018 - 11:05
    -4

    Anyone who enrolls their child in a system where the average house price is 11 times the average wage and wage growth has been non existent for many decades is committing abuse. Bring back the death penalty.

    • Scrooge McDuck on 14/03/2018 - 16:16

      I guess they don't teach coherent thinking in schools either…

  • dcep on 14/03/2018 - 11:07
    +1

    nothing wrong for ppl enjoying their 80k AMG on loan, while you peasants drive your camry shitbox

    nothing wrong for ppl renting a $1500 p/w penthouse, while you live in your pathetic farm house spending 3hrs in car everyday

    • [Deactivated] on 14/03/2018 - 11:15

      Except they can only enjoy these things knowing if it all fails, they can fall back on the forced good will of the tax payers.

      • Punknerd on 15/03/2018 - 18:03

        Or is it the way that the intended side effect of our welfare system? Let people have fun with their money so that the economy grows. If everyone is as tight as I am, where I put up a list of need Vs want (in my head) for every single purchase, and only buy if that purchased is needed; retail sector would be dead.

        • [Deactivated] on 15/03/2018 - 18:59

          I don't think getting people to spend money so they can generate income for welfare is ever an intended effect. Welfare is far more draining on society than the retailer sector can provide.

          Last year the retail sector reported a $169b revenue vs social security payout of $156.8b.

          Bear in mind that the retail industry revenue hasn't taken into account the cost of goods, services or rent.

          Social security is never engineered for economic gain. It's always a net drain on tax payers.

        • Punknerd on 15/03/2018 - 22:22

          @tshow:

          You sound like you know the numbers. I don't. I don't even work in the economic field. From my layman perspective, wouldn't the effect of stingy spending from everyone (i.e. rich and poor) create a hole in the economy affecting many more sector than just retail.
          For example, aftermarket turbo charger is a luxury/ non-essential thing that people do. There would be no tuning shop, no local manufacturing of turbo parts, less frequent service, less incentive to do track/drag day, no car meet etc. You get the idea.

          Also, I feel like having a good safety net (i.e. good welfare and healthcare) encourage people to take risk and explore more options for their career or open up small businesses. I don't have the data to back this up. I think the proliferation of small businesses in Australia may have something to do with the fact that business owner feel like they can still exist if the business fails.

        • [Deactivated] on 15/03/2018 - 22:43

          @Punknerd:
          You don't need a qualification in anything to have knowledge of the given subject. That's the beauty of the internet. If you can decipher what is credible information (I use the ABS and other primary sources) and interpret raw data, you can form educated opinions that should be judged on their merit alone, not because your hold a piece of paper with an embossed emblem.

          According to the Federation of Small Business, USA scores higher for small business friendliness than Australia and only marginally below NZ. We know that the USA doesn't have the same level of social security. Also, dissecting the data, Australia's (and NZ) score is further inflated by the fact Australia (and NZ) imports small businesses via business Visa as an avenue for immigration. The USA does but it is a lot harder to achieve and the rewards isn't a guaranteed PR.

          Moving to analogy, as a business owner, there are a shitload (I presume this is the accepted metric) of beauracratic hurdles to set up a business in Australia as compared to my relative in the US (Texas) for the same generic business.

          Of course spending has a positive effect on the economy but it doesn't contribute on its own. You cannot spend your way out of debt and there's no faster way to create debt than to give away money.

  • DarthAntz on 14/03/2018 - 11:11

    Im currently teaching, and to my school leavers i asked them, 'if you were given $30 000 tomorrow, how would you spend it?' its roughly a years salary, given to you in a day. This generates a lot of discussion. Some students would spend it in less than a month on material possessions, others would travel, and some would spend it on debts or study that lasts a year or two. It has been interesting to see 17 and 18 year olds never have considered spending money that will benefit them for a long term. And I let them know they cannot simply put the money in the bank and let it sit, they have to use it.

    IMO the best way to spend it is on something that earns you money, like a small business or something that can make the 30k work for you. The lesson is to stay in the green and not end up in the red.

    The reason why personal finances arent a part of actually curriculum is because, as mentioned else where, institutions want you to have a debt. it keeps you working, it keeps money exchanging hands, which enables few people to do nothing and everyone else to do everything. You have to work, wheels need to turn.
    Because it is like this, it should be your personal responsibility to teach yourself and your children, and fill the gaps of education that you can expect to come from anywhere else.

    • c0balt on 14/03/2018 - 11:18
      +3

      If you are currently teaching, surely you would be aware of the finance subjects available to QCE students?

      They can chose to do them if they wish. Or would you prefer that a kid is forced to do a subject they might not want to do?

      Institutions want people to make money and spend money. They don't want them being thrifty like people on this site. It's counter intuative to suggest that banks or the government want people to have less money, when in actuality they make a lot more money from someone who can make debt repayments or with savings in the bank, than they can off someone who is on a debt plan and can't pay interest repayments.

      • DarthAntz on 14/03/2018 - 13:01
        +1

        I agree.

        And im teaching overseas. Its international that young people/students arent getting financial values taught through the institution that teaches them everything else they need for society. QCE students are at a benefit if they have these options.

      • Illian on 14/03/2018 - 19:35

        "Or would you prefer that a kid is forced to do a subject they might not want to do?"

        Yes. They already do that until the last three years of school anyway.

    • tunzafun001 on 15/03/2018 - 21:37

      Check out Essi money online game. Good life skills in there.

    • fruxo on 17/03/2018 - 11:39

      I see what you are saying, but at that age I'd definitely recommend spending a large chunk of the money travelling before going to uni and starting your "adult" life and all associated responsibilities (job/mortgage/marriage/kids etc).

      It would be more interesting if a similar question was asked of a group of 25-30 year olds. If we won the lottery, my first thought is paying off mortgage. My wife's first thought is going on a shopping spree.

  • Ughhh on 14/03/2018 - 11:16
    +3

    Kids get taught about drugs and alcohol in school, but most don't care. Imo parents have a huge impact on the kids budgeting skills, no teacher can change that.

  • [Deactivated] on 14/03/2018 - 11:22
    +3

    There are a couple of false premises here derailing OPs discussion.

    1. OP has confused financial studies with money management. It is clear OP meant money management as "living within means" was clearly mentioned.

    2. Some are conflating the argument as money management education in school vs no money management education whatsoever. There is a third option - parental values.

    No one is saying money management is bad or not required - it is absolutely valuable. Those opposed to schools teaching money management are saying it is a lesson to be learnt at home.

  • pformag on 14/03/2018 - 11:37

    More importantly, why are schools not teaching kids how to become Instagram stars.

    • maximum on 14/03/2018 - 12:11
      +7

      My son (13) had a plan for becoming instafamous or being a talent agent to make people instafamous. I heard him advising his cousin (a 15 year old girl). I'm not sure where he learnt it - definitely not from me and I'm pretty sure not at school - at least not in the classroom. It involved questionable but not illegal photographs and ongoing subscriptions to a "pay page".
      While I'm proud of his well thought out business plan I did have to have a talk to them about the value of self respect and ethical issues. Not sure it all sunk in - the words "pimpin ain't easy" were used - and not by me.

      • Scrooge McDuck on 14/03/2018 - 16:22

        It's called entrepreneurial spirit Dad!

        • maximum on 14/03/2018 - 19:28

          He is the product of accountants. I don't have to worry if school doesn't teach him about finances he has been charging me compound interest whenever I borrow his money since he was about 7. He has a password protected spreadsheet on his computer detailing his accounts so I can't rip him off. Now if I can only get him to use his powers for good not evil.

  • tsunamisurfer on 14/03/2018 - 12:44
    +6

    The responsibility of teaching money sense sits with the parents and the home.

    The responsibility of teaching the arithmetic and the simple concepts of money like interest, NPV, FV and RoR sits with the school.

    I think the money sense part is largely missing in many households, they simply don’t teach or even know the value of money in those households. The spend now, worry later attitude seems deeply entrenched in Australian values.

    The worrying part for me is how that lack of financial acumen has translated into people’s adult lives and how it has been used to excuse their behaviour.

    A good example is the banking institution saga and claims of irresponsible lending. Whilst I don’t wash the banks of blame, there would be no irresponsible lending without irresponsible borrowing. I too had been offered a large mortgage amount against my then meagre income, but at least I had the wherewithall to do the sums and understand I could not afford to live with such levels of debt for which I would have difficulty servicing over 25 years.

    High credit card debt levels is another example, so many complain that interest rates are high or that credit card late fees are exhorbitant, well that’s on the customer for invoking those costs, they are easily avoidable.

    From a young age I was taught that money is hard to come by, and if I want something it should of value and paid for from earnings / savings. That has given me a good grounding to adulthood.

    Conversely a friend of mine will gladly allow his children to spend over $1k on skins and pets on online games like Wizard 101, on credit.

    Understanding the money and it’s value begins at home, schools are there work in concert with that by providing the building blocks like numeracy and financial literacy.

  • Freitag on 14/03/2018 - 12:49
    +2

    The real issue is self control and that can't really be taught in schools.
    Most people know that they will have to pay back what they borrow plus interest. And yet, many of these same people still live in the red, its not knowledge they lack, but self control, prudence and wisdom.

    • Mike88 on 16/03/2018 - 13:38

      Exactly this. If you can’t workout that spending $1000 a week while you earn $700 is going to send you into debt, you are likely to have bigger problems like navigating breakfast or turning on the television.
      People know they live beyond their means but don’t want make sacrifices to budget their finances properly.

  • horsome on 14/03/2018 - 13:38
    +1

    Because they would then understand the financial risks of going to University and end up not going. High schools are more or less a feeder into tertiary education institutions and not real life.

  • Cheap Steve on 14/03/2018 - 14:44

    Do they still teach Economics at High School? What a bunch of useless academic mumbo-jumbo with minimal real world application.

    I would happily rejoice if Economics was taken out of the curriculum and replaced with Personal Finance.

    • fossilfuel on 14/03/2018 - 17:07
      +2

      Economics, in NSW at least, is taught at the stage 6 (year 11 and 12) level. It is not a mandatory subject however having an economics background makes it easier for students to study a commerce or economics related degree in university.

    • max2million on 14/03/2018 - 18:44
      +1

      If you vote, then understanding basic economics is very important.

      Understanding the theories of supply and demand, taxation and incentives etc. are all critical for informed citizens.

      Remember Clive Palmer saying that increasing the pension would make everyone rich as they spend it all?

      What about Lambie saying that we can print more money to get out of debt?

      Being tricked will not lead to good outcomes.

      It's also valuable to learn what the other side of the business is thinking (e.g. the employer).

  • Save Medicare on 14/03/2018 - 16:11

    UNSW has a bloke called Andrew Hingston who runs a personal finance general education course. A bunch of medical students choose to do it in their 3rd or 4th years. You can listen to his lectures for free online on Youtube. My girlfriend made us start listening to then after we finished med school.

    https://www.youtube.com/playlist?list=PL7L-54wsCwBWTyAtooNET…

    • Scrooge McDuck on 14/03/2018 - 16:25
      +1

      Strong username to avatar ratio!

  • fossilfuel on 14/03/2018 - 17:01

    I am trained to teach commerce in NSW high schools but I haven't taught the subject yet. I'm happy to answer questions on this subject matter.

    Commerce is mainly taught as an elective subject in stage 5 (year 9-10), meaning that it's not mandatory unlike English, Mathematics, Science, HSIE (Geography and History) and PDHPE. Personal finance is one of the main topics in the NSW Commerce Syllabus. See Core 2.1.

    Since commerce is optional, not all students take it. For the students who take it, they don't take the subject too seriously since they have the core subjects to worry about and most of the concepts aren't immediately applicable in their daily lives. What 15 year old is going to worry about diversifying their portfolio in the stock market?

    I think the best way to give students an insight into commerce is by exploring concepts then tying it to practical activities. I remember back in stage 5 commerce, reading the textbook on investing was boring as hell. But then we also played the ASX game and I remember losing a ton of money in the first few days. Even up to today, I still remember that the stock market is highly unpredictable, you get paid money called dividends and not to buy 1 stock at a time or else you'll get slugged with a $30 fee every time you buy or sell.

    I think it should be a mandatory subject for all stage 5 students and perhaps even at stage 6 (even if it's a 1 unit subject). Even in 1st year uni or TAFE, a commerce course would be highly beneficial. Commerce teaches important financial literacy skills that will be relevant for a lifetime.

  • itsdougie on 14/03/2018 - 17:51

    Commonsense plays a big part too.

    • Starlight8 on 14/03/2018 - 18:31
      +1

      Totally agree!

  • Keeegs on 14/03/2018 - 17:53

    Because they want to make sure you know how to solve algebraic equations like 2x + 3 = 7 in your day to day life!

  • bad hombre on 14/03/2018 - 18:17

    Debt and consumption is what makes the world go around. Keep everyone one on the merry go round and dangle that carrot to say it will be worth it when you're 70.

  • original15 on 14/03/2018 - 18:21

    HOW dare you slander the CBA dollarmites program!! Isn’t the sole purpose of the program to teach kids about saving and the benefits of looking after your finances??

    Wonder how they got such a sweet gig to engage customers before they can even spell their last name

  • Starlight8 on 14/03/2018 - 18:30
    +2

    I finished school more than a decade ago and i vaguely recall doing compound interest calculations in maths class.

    I don't believe its entirely up to the schools to teach everything, what happens if the kid drops out?. Its part of parenting.

    I never did commerce in year 9 (i kinda regret not doing it) but i took all the business subjects in senior years.

    I can definitely vouch that Economics taught in highschool is very useful in everyday life.. Like the simple laws of supply and demand.. Etc

    No surprises I'm an Accountant and I see many clients live beyond their means. I think its lack of financial education.

    Those who don't have a financial background tend to seek the help of a financial planner. I guess thats what they are there for right?

  • Whomastadon on 14/03/2018 - 18:56
    +1

    You can read the barefoot investor book in one day and know almost as much as you need to know to manage personal finances, and branch off from there.

  • fozzie on 14/03/2018 - 20:33

    Because there is already too much to teach/learn. I hope parents start to take a more active role in teaching their kids about life skills.

  • skywards on 14/03/2018 - 21:53

    So that we can become employees!

  • Herbse on 14/03/2018 - 22:16

    it is taught. people just forget or dont pay attentiin

  • iDroid on 14/03/2018 - 22:37

    Heck why are all the important life skills ignored at school?

    There seems to be generational gaps of skills being passed on through education or family.

    Seems too many are lacking basic life skills (forget survival skills), so the parents don't have the skills to pass on, the schools overlook them so we're starting again from scratch with the simple things.

    But life is so easy now so anyone can get by with little issue. If sh!t ever hits the fan though, it's going to be tough.

  • donotuse on 14/03/2018 - 23:02

    This is so that the Rich become Richer.
    The education system is designed to prepare us as employees/workers, rather than entrepreneurs. The rich people want us to work for them, to make them richer. And that rich exclusivity ideology has heavily influenced the design of the school system.

  • belongsinforums on 15/03/2018 - 00:07

    Why don't the government teach me how to tie my shoes? It's too difficult for many of us and I blame society.

  • niknah on 15/03/2018 - 00:11

    PE is also taught. Lots of people don't do much exercise.
    English is taught. Not everyone reads books.
    You can teach as much as you want, some people just don't want to think or do much.

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