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What This Country Needs Is A Good Money Lesson

Tuesday, May 28, 2013 - 8:46 AM
In 1967, Muriel Siebert purchased the first seat ever sold to a woman. In 1975, she opened Muriel Siebert & Co., which became one of the nation’s first discount brokerages. Her message:  Financial literacy must be a national priority.

From MarketWatch:
Financial literacy can be mandated at a local board of education level. The State of New Jersey mandates financial literacy as a requirement for high school graduation.

I will keep pushing for personal finance education to be a graduation requirement in every state. Financial literacy can change lives — and change the nation.

Read more

One has to wonder how the country might be different today if a program of financial literacy had been implemented 30 years ago, but the first students in such a program today need to be our elected representatives in Washington. 
7
pearlbrownpearlbrown1,433 posts since
Nov 2, 2010
Rep Points: 6,255
1. Tuesday, May 28, 2013 - 3:01 PM
One of my biggest gripes with the US Education system is why students "must" take Algebra when most of them will never have to use it.  Instead all High Schools should have Financial courses where students can learn how to understand finances and handle money and even taxes.  Unfortunately, not all parents know enough about finances to teach their children how to handle money.  It does no good to be fortunate enough to get a good paying job if you are broke all the time because you have no idea how to budget your paycheck and even learn to save a bit for emergency or unexpected problems. 
3
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
2. Tuesday, May 28, 2013 - 5:25 PM
There are two parts to your comment:  "why must students take Algebra" and "most of them will never have to use it". 

Algebra can be challenging and difficult to master, but there are many reasons for taking Algebra, the best one being that it gives you the foundation, language, process and methods for problem solving and decision making and for thinking in the abstract. 

As far as "most students will never have to use it" - if you can can solve a situation that involves for example, money, time, distance, perimeter or area of an enclosure,or the volume of a container, you are using algebra.  If you can calculate miles per gallon and miles per hour, or figure out which cell phone plan is best for you, or adapt a recipe which serves 4 people to serve 10 instead, or set up a spreadsheet to calculate whether to take Social Security at 62 or wait until your full retirement age, given varying rates of return and inflation, thank your Algebra teacher.  Those may not be the most complex equations, but you are still solving them using the concepts taught in Algebra. 

Here is a good Infographic which highlights the practical uses of subjects such as history, science, government and math.

For the record, I don't think it's an either-or situation:  either teach Algebra or teach practical financial courses.  I think there is a need and room for both. 

However, I do agree that Johnny often doesn't know about simple financial concepts.  Unfortunately in many cases Mom and Dad aren't able to teach Johnny because they don't know them either, and that is sad too. 
8
pearlbrownpearlbrown1,433 posts since
Nov 2, 2010
Rep Points: 6,255
3. Tuesday, May 28, 2013 - 5:35 PM
pearlbrown,

Thank you for your sensible words about the value of knowledge learned, in this case, Algebra. People too easily dismiss entire fields of learning with the rubric "I'm never going to use it anyway." Unless you have a crystal ball, and have 100% accuracy and certainty in predicting the future, you never know when something learned in the past might prove useful. And, as you correctly noted, there are often skills cultivated in the process of learning these often dismissed subjects that are very practical, but which people don't consciously realize from whence they came.

But getting to the original topic, I heartily agree that financial education is vitally needed, and ought to be included in the secondary school curriculum. Perhaps some of the time spent on propaganda in the public schools could be better used if spent on things like financial education.
3
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
4. Tuesday, May 28, 2013 - 5:39 PM
By the way, Ken's thread The 11 ways that consumers are hopeless at Math is related to this discussion.
6
pearlbrownpearlbrown1,433 posts since
Nov 2, 2010
Rep Points: 6,255
5. Tuesday, May 28, 2013 - 6:04 PM
Thanks, Wil.  The "11 ways" thread cited in #4 discusses many instances in which we as consumers often make the wrong financial decision because we are not comfortable with logical problem solving, and instead, as the article states,
Although humans spend in numbered dollars, we make decisions based on clues and half-thinking that amount to innumeracy.

That is, the problem sometimes goes beyond "I don't know how to think about it" (see the article's example:   You walk into a Starbucks and see two deals for a cup of coffee. The first deal offers 33% extra coffee. The second takes 33% off the regular price. What's the better deal?) to "we're manipulated by those who are trying to sell to us" - and they have only their self-interests in mind.

Yes, we absolutely need to add financial literacy to the traditional 3R's (reading, (w)riting, 'rithmetic). 
6
pearlbrownpearlbrown1,433 posts since
Nov 2, 2010
Rep Points: 6,255
6. Tuesday, May 28, 2013 - 6:27 PM
Learning an area in Math. does not necessary relate to "application."  It builds up a person's depth of knowledge and attitude toward science in general. 

For example, we, as engineers, have to learn Calculus, Linear Algebra, Differential Equations, Complex Variable, Probability, and Statistics in our own field.  Only Probability and Statistics are applied heavily in my practicing profession; but without expertise in other fields in Math, it would be impossible to be an engineer that I am now. 

Thus to be financially proficient, all areas of Math are useful, IMHO. 

I am continually amazed how people cannot do the simple Math. (e.g., add/subtract/multiply/divide) at all.
4
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
7. Tuesday, May 28, 2013 - 6:29 PM
Pearl:  Thank you for the explanation of the importance of Algebra.  If what you post is true, and I have no reason to believe it isn't, then how is it that I have never taken Algebra but been able to master all the skills you speak of.  My family has never been able to understand how I can master anything to do with math, finances, or taxes.  I think some people are born with certain skills and others acquire them by learning.  I had no idea I was using Algebra all my life in the work I do for my family until I read your post.  When I told my councillor in High School that I could not be scheduled for anything but regular math classes (because I felt Algebra was beyond what I could learn), if she had explained to me what Algebra really prepared one for (as you just did) I may have taken it and acquired even better skills and abilities than I already had.  How sad it is that we fear what we don't understand and too many times the "Pearls" of our life appear too many years too late. 

Much thanks and appreciation for helping me to understand what Algebra really is.
3
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
8. Tuesday, May 28, 2013 - 9:11 PM
Unfortunately, guidance counselors rarely try to get students to rise up to meeting challenging courses, more frequently the exact opposite is the case. It may be that they may think that if too many students that they are uncertain about are put into "hard" classes, and get poor grades, that they (the guidance counselors) will "look bad."
4
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
9. Wednesday, May 29, 2013 - 7:09 AM
Graduated over 50 years ago. The school I went to had 2 choices. Bookkeeping and englisn or algerbra and latin. One could only take algerbra and latin if you were able to go college and had wealthy parents to pay for it. So I had bookkeeping and english. But a wonderful class was mandatory for all students. It was called "Orientation". Each student was a mother, father 12 year old boy and 10 year old girl. Each student had to find a job for the father, do calculations for the withholding of taxes,  either buy a house or rent, buy a car, insuranace, buy groceries, clothes, do vacations, etc. have a budget for sickness. Had to do a complete budget, even go through the newspapers and make a grocery list each week and use the budgeted money, prepare a daily menu, had to buy stocks and bonds, open a savings, and checking account, (no CD's back then and actually had to go to banks and credit unions to see where the best deal was) We had to make out the checks for all payments, even had to budget for the children's allowances, and balance the checkbook with the fake statements we made,  had to shop for life insurance, car insurance, and house insurance, had to prepare the income tax for the year. Because we had to actually shop for insurance, homes, automobiles, clothes, utilities, bank accounts, etc. We learned how expensive it was to support a family. This was a required class in 9th grade. Best class I ever had. Some students families could not even afford a newspaper so we would share it with other students. 
2
Ally6770Ally6770912 posts since
Jan 16, 2010
Rep Points: 2,655
10. Wednesday, May 29, 2013 - 8:20 AM
Wow, Rosie, that Orientation class was a massive dose of life in the real world and definitely ahead of its time - do you know if it is still included in the curriculum?
2
pearlbrownpearlbrown1,433 posts since
Nov 2, 2010
Rep Points: 6,255
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