Most of us agree: the world could use a little more financial literacy. Everyone talks about the need for financial education in schools and beyond. But if it were up to you, what exactly would you teach?
Photo by Center for Teaching Vanderbilt University
Some of personal finance is universal and practical — how compound interest works, how to create a basic budget. Some of it varies depending on where you live (tax and superannuation rules). A lot of it is also behavioural — overspending, for example.
What specific lessons would a financial literacy class entail? What basic money lessons do you think would be most helpful for people who know nothing about personal finance? If you had to teach a financial literacy class, what would be on your lesson plan?
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3 responses to “What Would You Teach In A Financial Literacy Class?”
Time value of money.
Doing a mock tax return would be valuable, if extremely boring. I’d also do case studies into people who went into debt to finance their lives (such as buying an expensive car or a holiday on credit and then going bankrupt).
The key lesson, though, is that money is simply a way to trade time between people.
We did a mock tax return in Commerce in year 8 or 9. If you’ve only got the one source of income and not too many deductions, it’s quite easy. I did it for myself, on paper, based on that lesson, until I started running my own business and having more ins and outs to worry about.
Mock tax return. Yes! I’ve been doing taxes via e-tax for the last 6 or so years and I’m so glad I don’t run any kind of major business, or else I’d be in over my head if I tried to do it myself.
My wife had an ex whose family would pay for lots and lots of stuff with credit cards (cars and even house payments), and ended up moving several times because the debt would catch up with them. They needed to have the good lifestyle, no matter what the cost. The guy could see what his parents were doing, but I suspect he may eventually fall in to the same trap they did.
So yes, case studies and general warnings on why credit cards aren’t a great idea unless you can handle them, would make for great topics in a financial literacy (numeracy?) class.
There is already a really good VET course for doing just this.
http://training.gov.au/Training/Details/FNSFLT301
There are a lot of ways of actually delivering the content, but the ATO along with a few other gov departments have put some material together free of charge.
https://www.moneysmart.gov.au/teaching