Personal finance and banking aren’t quite on the curriculum in grade school, but what if they were paired along with math? Money management is an important real-world skill, especially in today’s economic climate. With more volatility in the financial world, early financial education may be just what students need to survive. But at what age should students start learning about personal finance? And whose responsibility is it to teach them?
We spoke with Randy Dorn, state superintendent of public instruction for the state of Washington, in order to get a better perspective on financial education. Dorn has held his position since 2008. His legislative priorities include retaining basic education funding, improving or removing ineffective teachers, and promoting early learning opportunities.
In your opinion, how important is educating students about money management?
It’s very important. All students, of course, need a solid foundation of math. Beyond that, they need to learn how to apply that foundation to the real world. Those practical skills will help students understand some of the basics of adult life, such as interest rates on cars and mortgages. It will also help them understand the consequences of not meeting a contract, such as penalties on late payments for credit cards.
At what age should schools start teaching basic personal finance?
Sometime in middle to late grade school, maybe fifth or sixth grade. When children start understanding the value of and need for money, they should be taught how to use it responsibly.
Do you believe it is the responsibility of the parents to teach their kids about money and finances?
Absolutely. Parents need to understand their own obligations to personal financial contracts in everyday life, such as credit cards, car loans and house loans. Many people don’t truly understand compound interest rates and terms like that. Where do they get that education? If we had educated all of America, we might have avoided the banking catastrophe. Certainly, if more parents understood, they would teach their children.
What steps has your organization taken to educate the youth of Washington state to be financially savvy?
We supported Sen. Patty Murray in her national financial literacy bill. Within Washington, in 2004, the Financial Education Public-Private Partnership was established to find out the best ways to educate students financially. Since 2006, our state has appropriated $50,000 each year to support the partnership. Our agency is proud to be involved in this work. Finally, a bill was introduced in 2012 (although it did not pass) that would require high school students to take at least one-half of a credit in financial literacy to graduate. One of the four goals of all public school districts, as defined in state law, is to “understand the importance of work and finance and how performance, effort, and decisions directly affect future career and educational opportunities.”
We would like to thank Randy Dorn, state superintendent of public instruction for the state of Washington, for his perspective.