Whom Shall We Trust to Teach Our Children about Personal Finance?

January 12, 2009 by  
Filed under Economics, Money and Behavior

The philosopher Plato believed that two of the most important questions that a society needed to address were: (1) what will society teach its children and (2) who will do the teaching.  Plato had some rather radical ideas about the answers to those questions, including yanking kids out of the home so that the elite (e.g., other philosophers) could do the educating.  Plato did not think that your average parental unit could be trusted with that job.  (If you’ve never heard of Plato, you need to question your own education.)

When it comes to educating our youth about how economics, money, and finance work together in the real world, Plato may have been right.  Many commentators, pundits and other self-appointed experts (I guess that includes Mr. ToughMoneyLove) believe that baby boomers are the primary culprits in what has happened to our economy.  We have overspent, under-saved, and generally treated credit as an addiction used to satisfy our lust for stuff.  I can’t really argue the point although I will humbly carve this baby boomer out as an exception.  Mrs. ToughMoneyLove and I have lots of stuff but we paid cash for it.  We saved as well.  So please don’t blame us.  I encourage you to blame other baby boomers, particularly those who represent us in state and federal government.

The problem is that baby boomers have mostly completed the task of raising their children.  In the finance education department, the damage has already been done.  Because public education generally ignores personal finance and economics as topics worthy of intense study, our youth have essentially been home schooled in these subjects.  And we – the home school finance teachers – have been terrible.  I say this because the generations behind us don’t seem to be doing much better.  (Again, I have to give credit to our three sons – so far so good with them.)

But the kids keep coming – the need for personal finance education remains.  Whom do we trust to provide that education?   The story of today’s economy will likely be written in history text books as a follow-up to a discussion of the Great Depression.  What will be said about it?  What lessons will be taught so that the students learn not to repeat history?  Will our government be criticized for its financial failures?  Will baby boomers be labeled as credit abusers?  I hope so but I’m not convinced that our public school teachers – as hard as they work and as devoted as they may be – are equipped to teach these lessons.  Frankly, if I had kids in public school, I would want to know something about the personal finance lives and philosophies of those teachers before I turned them loose on my kids. 

We certainly don’t want the government taking over the finance education of our youth.  Who in government has demonstrated competency in that area?   Paul Bernanke?  Henry Paulson?  George Bush?  Barney Frank?  None of them inspire me.  They are all spenders to the core. 

On the other hand, turning our kids over to Dave Ramsey or Suze Orman doesn’t sound right either.

Perhaps we should identify the sub-cultures in our society that have followed successful financial lives and use them as examples and even teachers.  (First, let’s cross anyone associated with Hollywood or Washington, D.C. off the list.)  The Amish come to mind for financial independence and frugal living.  The Mormon church has some great ideas on economic survival and self-reliance.   Now I’m struggling to think of other candidates.  Plato – where are you when we need you?  Can you readers help me?

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11 Responses to “Whom Shall We Trust to Teach Our Children about Personal Finance?”
  1. The best group may be the ones who should have been teaching the baby boomers- the previous generation. While there may not be too many left, many of today’s seniors could teach everyone else a lesson about personal finance and restraint. The people who prospered during turbulent times without the help of mortgages, credit cards, HELOCs, or social assistance probably have a thing or two to teach the rest of us. Then again, why didn’t the baby boomers learn these lessons from their parents?

  2. Dangerman says:


    They’re the perfect example, five thousand years worth of culture that emphasizes financial literacy.

  3. Doctor S says:

    I really think the only people to teach our own is ourselves. Principles of personal finance need to be start at a high school age at the latest. If a child can earn a dollar, he/she should understand how to save a dollar and the implications of spending it. I never understood personal finance until I began teaching myself after I graduated college, and thanks to the blogosphere for that. Our own personal experiences are the best teaching tools by far.

  4. MGL: Good point and good question. I think a lot of the conservative financial attitudes emerged from the depression. Those memories faded slowly over time and through generations. Maybe 2008 will be a catalyst for a new attitude spreading.

    Doc: I agree to an extend but it would be nice if not everyone had to learn from their own mistakes.

  5. Matt SF says:

    Good question. My folks gave me a checkbook at age 15 with a monthly allowance. If I came up short, I stayed home and my car didn’t leave the driveway. Sink or swim techniques are quite effective.

  6. TStrump says:

    I think we need to learn to talk about money at home – it’s such a taboo subject in our culture for some reason.
    In my family, we never talked about money growing up, and we never had much of it.
    If we’d actually had a discussion around the kitchen table and brought up issues – salaries, overspending, unemployment – I would have been farther ahead at a younger age.

  7. Melanie Reformed Spender says:

    There are some teaching tools developed by banks and other institutions that teach the basics of investing.

    Your comment on not trusting teachers is relevant to a certain point, but you should consider that they don’t make the program, the government’s education specialists do.

    When I was in high school, basic personal finance was taught in a mandatory class in high school. It wasn’t much, but we learned a few things about the basics of investing.

    Where I teach now, there is a similar course, but it isn’t mandatory. It includes the basics of interest, how to read a bank statement, the value of saving vs spending and how to calculate the overall cost of credit.

  8. My Journey says:

    “Plato had some rather radical ideas about the answers to those questions, including yanking kids out of the home so that the elite (e.g., other philosophers) could do the educating. Plato did not think that your average parental unit could be trusted with that job. (If you’ve never heard of Plato, you need to question your own education.)”

    Isn’t that our education set up today? except our teachers are no where near elite for the most part.

  9. DAD says:

    Sent you a copy of an art re this subject

  10. Doctor S says:

    Your right, the less people that have to learn from their mistakes, the more successful people we can potentially have, but we need to start the education now and early for the children. Basic stuff is the key to building an interest that they can run with on their own.

  11. MasterPo says:

    Very good topic.

    I hope I can teach my children to be financially savy.

    But it also scares me that a lot of what kids these days are being taught about wealth and those with it. That is, people with money are “evil” and are duty bound to give it to others, that working hard is fine and once you achieve success you have to give a big portion of it to others who haven’t worked as hard, and that somehow you’re the problem in society if you have done better than someone else.

    Never be ashamed of being successful!

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