Olemike's Blog

Personal Finance Education

Posted by olemike on 01/27/2011

One of the main causes of the housing crises is the fact that many home owners or former home owners bought houses they could not afford.  Sadly, many of them did not realize  that and  there are differences of opinion about why.  Many believe that it was the fault of shady loan sharks or banks that took advantage of innocent buyers.  Maybe that happened to some extent.  However, the major reason, in my humble opinion, is that most of the buyers did not have the requisite understanding of the financial information required to purchase real estate.   Hence, my proposal to have all high schools in the country implement one semester of ‘Personal Finance” to be taken by every senior.

The curriculum would include an understanding of the SEC, Federal Reserve, common stocks, preferred stocks, bonds, interest rates, and various home loan types such as fixed, variable, adjustable, etc.   There would need to be a great deal of information on the benefits of and types  of savings vehicles – for example, standard and Roth IRAs, college savings plans such as the Educational IRA and 529 plans, mutual funds and their various types, etc.  I am convinced that if people understood the basics of personal finance, they would make better decisions in managing their money. 

In order for the country and each individual to get on track financially, they need information and knowledge about the subject matter.  This would be a step in  that direction.  What say you?

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One Response to “Personal Finance Education”

  1. Agree! Agree! Agree! (Did I tell you that I agree?) Economic bubble burst: over spending, under saving, living outside of our means. Education: This should be mandatory in all schools and I vote for even more than one semester.

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