You Don’t Know What You Don’t Know – A First-Hand Account of the State of Personal Finance Education

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The following is a guest post by Eva Baker of, who is (in my opinion) a very wise high-school student for getting started early learning about personal finance. I’m very excited to have her guest posting on my site today. I hope you’ll join me in welcoming her as well!

Personal finance is in a shambles in America.  On the news and in daily conversation, you hear people talking about credit card debt, student loan debt, and how difficult it is to save any money in this economy.  Over the last few years, many of my friends have have had a parent lose their job, I know families that have lost their homes to foreclosure, and teens are having a more and more difficult time finding a good part time job.

One might think that these terrible circumstances would lead to an urgent move on the part of parents and schools to teach their children, particularly high school students, more about personal finance.  But, you would be very wrong.  Few states even offer personal finance classes and even fewer require such a class for graduation.

In 2011 Charles Schwab released a study called, “TEENS & MONEY SURVEY FINDINGS: Insights Into Money Attitudes, Behaviors, and Expectations of 16- To 18- Year-Olds.”  What the study shows is very interesting and is at times, quite entertaining.  It reveals that 93% of teens say that their family has been directly affected by the recession and that 75% of them have had a conversation about their family’s financial situation in the past year.  73% of those teens believe that it is important to have emergency savings in case a family falls on hard times.  What was most poignant about the study to me is that fully 86% of teens say that they are interested in learning about money management in a class instead of making financial mistakes in the real world.  Unfortunately for them, only 14 states currently offer such a class (if you’re interested in reading up on which states offer personal finance and economics education classes, click here and go to page 8). 

The entertaining part of the study?  Well, most teens think that we are going to earn an average salary of $150,000 a year.  (Of course I am, duh…)  We also consider ourselves to be ‘financially savvy’, but hardly any of us teens even know what a 401(k)/Roth IRA is, how income taxes work, or whether or not using a check cashing service is a good idea.  Those things are kinda funny, and at the same time, not so much.  A check cashing service?  Now that isn’t funny at all.  And don’t even get me started on paycheck advance places.  Someone should tell teens to stay far, far away.

In an article for US News and World Report titled, “Why Most High Schoolers Don’t Know How to Manage Their Money,” we find out why many teens don’t have the answers to their questions.  Apparently there is ‘discomfort among teachers and parents’ and neither group feels qualified to teach teens the basics of personal finance.  The article quotes a person named Morrison of the Council for Economic Education saying, “To say it’s a parent’s responsibility seems unfair—unfair to the parents and unfair to the kids. You can’t ask people to be responsible for teaching something if they haven’t received the education themselves.”   Really?  To be honest that just makes me mad.  So, if my teachers don’t feel comfortable and neither do my parents – just where am I supposed to learn anything about managing money?  (I have all sorts of snarky things to say here but my mom told me I have to be nice.)

I completely disagree with that kind of thinking.  I believe it is the responsibility of parents and teachers to help us as teens understand the basics of managing our money.  You don’t have to be an expert, have a finance degree, or go through a year of specialized training in order to teach those basics.  Thankfully, this gap in education is not going unnoticed.  The Council for Economic Education reports that fourteen states now require students to take a personal finance class in order to graduate.  According to CEE in the News, local groups such as the Chattanooga Area Chamber of Commerce are also doing their part to help educate students.  They recently sponsored a “Reality Check” event which is an exercise in real life budgeting and money management.  Even though students may not understand everything in the class, they did walk away with a greater appreciation for the cost of living and how education affects earning ability.

Some of my earliest memories about money involve managing that money.  My parents made up three envelopes for me, and I had to choose each week how much of my allowance would go into each envelope.  My choices were savings, spending, and giving.  It really doesn’t get much more simple than that.  Early training has helped me appreciate that money is a tool and I am the one responsible for making purposeful decisions about what I earn or am given.

If you are a parent or educator, I urge you to get involved now with your students so that they can learn these basic principles.  If you have or are struggling yourself, be transparent with your kids and allow them to learn with you so that they don’t make the same financial mistakes you might have made.  If you are a teen, talk to your parents.  Don’t be afraid to tell them that you have questions and want to be educated on all issues of handling your money well.

Teens may not know what we don’t know, but we deserve a fighting chance.

Aside from that, I’ll leave you with the following cartoon I found while writing this post. It was a good reminder for me of the importance of open communication between parents and teens.

***Cartoon displayed with special permission from

How about you all? Did you learn about personal finance in school or from your parents? Or, did you have to teach yourself through trial and error? 

How do you think the personal finance education system in US public schools could be improved? What roadblocks do you see to prevent its implementation?

Share your experiences by commenting below!

About Eva:

Eva Baker is a high school student passionate about preparing for her financial future and helping other teenagers prepare as well. When she isn’t rock climbing at the gym or pinning ideas for her non-existent wedding, she documents her financial journey over at Find her on Facebook and Pinterest as well!


  1. My parents always taught me about saving and not having debt. I later found that my biggest lack of accurate information came in thinking that other kids were receiving the same information at home. Boy, was I wrong. It wasn't until I actually 'became an adult' that I realized how well my parents had taught me, and the way that they taught the most was in leading by example. They lived everything that they taught me. I think many parents fail because they don't address money at all in terms of things that they teach their kids, and others fail because they tell kids to do the right thing, but then don't do the right things themselves. They think they've fine with a 'do as I say, not as I do' approach, but kids usually don't learn from that as well as parents would like to think they do.

    • I'm thankful for my parents as well. I think that it must be hard for parents, but it's something that is so important. My mom has been very real with me about her financial mistakes and since I am a little older that has been a big help to me as I see her correcting those mistakes.
      My recent post Chick-fil-A Giveaway WINNER!

  2. If only I had have learnt some of the personal finance concepts I practice now at school, from my parents or even via a good book early on. Instead for 12 years I worked, thought I was saving but was in reality was going nowwhere fast. Over those 12 years I amassed enough investments to get me 20% of the way to financial independence.

    Then I woke up, read, research, ran simulations and finally developed a number of strategies lossely based around Saving Hard and Investing Wisely leading to financial independence. In the subsequent 6 years that 20% has gone to 65%.
    My recent post The S&P 500 Cyclically Adjusted PE (aka S&P 500 or Shiller PE10 or CAPE) – February 2013 Update

    • So many adults tell me how much they wish they had started earlier. I don't know anything about investing yet – but I think that if a young person can avoid student loan debt and credit card debt they will be way ahead when they are in their 20's!
      My recent post Chick-fil-A Giveaway WINNER!

  3. myfijourney says:

    I learned how to be frugal/cheap from my parents. This has always been a benefit, even if I wish I was a bit less tight fisted sometimes. But as for personal finance and investing, I learned all of that on my own.

    Ironically, my high school had an economics class, but not a personal finance class. So I could map out supply and demand curves, but not create a budget. M3 money supply, got that down. Knowing the difference between an IRA and a regular brokerage account, not so much.
    My recent post Sysco (SYY) Dividend Stock Analysis

    • Exactly what I am facing – I have to take an economics class next year in order to graduate – but absolutely nothing required in the way of personal finance. So frustrating!
      My recent post Chick-fil-A Giveaway WINNER!

  4. Jules@FGSW says:

    What a great article! I learned about my finances from school and mostly as an adult, the hard way. I thank you for this reminder that I need to make sure to try and prepare my own children!

  5. I taught a personal finance class at my former school for 3-4 years and expect to teach it again at my new school. To make it more effective, parents need to support the things they students learned in the class. I normally give the students a project to involve their parents. Pf is a little like learning a foreign language, if you do use it you lose it.
    My recent post I Am a PF Coach and I Should Be Fired!

    • Do you mind sharing more about the class? Did you write your own curriculum or use something already produced? Was the class a part of the regular day or something that the students could attend after school hours? Thanks!
      My recent post Chick-fil-A Giveaway WINNER!

  6. Brian @ Luke1428 says:

    Great post! As a high school personal finance teacher, I have seen first hand how hungry kids are for this stuff. They love talking about money and how it relates to their present and future. I'm not sure why we shy away from bringing it up at home or school. Just a guess but maybe because the majority of parents and schools have done such a poor job with their own money management, they feel unqualified to teach it.

  7. The College Investor says:

    Great post! I hope that other younger people will learn something from Eva and that they too will do their best to learn more about handling their finances at an early age. Moreover, I think that parents should not just teach children to save, but to give them actual practice on doing so.
    My recent post Negotiating a Raise as a Woman, Part Two: Unintended Side Effects

    • Thank you! I agree that teenagers really need practical experience in handling money before they move out and live on their own.
      My recent post Starting Your Own Business – Mia Elizabeth Photography

  8. I learned a lot about money from my parents, but also a good bit from my high school economics teacher.

    I wish more states required personal finance education, but it's not going to happen since all we are focused o right now is getting the highest test scores to get the most money from the state.
    My recent post My Biggest Money Problem $999.99 Giveaway

    • When I did the research for the post, it seemed like many states were concerned about the cost of implementing a new program in their schools. The cost was amazingly high. It just doesn't seem like it should cost that much – but there are so many rules that have to be followed it makes something that should be easy and straightforward practically impossible.
      My recent post Starting Your Own Business – Mia Elizabeth Photography

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