Today, the curriculum in Massachusetts high schools lacks a critical base of financial education. We do an excellent job of educating students to write, understand statistics and math, world history and civics, and complex science relationships; however, we have neglected to educate them as to how money works and how to make good decisions with their money. Managing money can be just as confusing and complicated as science or math for many, and the cost of this lack of knowledge can be very high. Poor decisions with money multiply and the cost can be staggering to some individuals. Many young people dig themselves into a financial hole that becomes very difficult to exit over time.
At Salem High School, students have the option to choose an elective course that allows them to build their knowledge of money and how investing works. This is wonderful for those who take the course, however, only about 10 percent to 15 percent (my estimate) of high school seniors enroll in this course, and most graduate without any exposure to this critical knowledge. The basic financial skills high school seniors need to be exposed to is as follows:
What is money and how do you manage it?
How do you balance a checkbook?
What are bank fees, overdrafts charges?
What does it mean to borrow money?
What is the difference between daily interest, weekly and monthly interest rates?
What is the concept of compound interest?
What are the basics of having a credit card?
How does the stock market work?
How does one invest in a stock or a bond?
What mistakes should investors avoid?
We are speaking out now on behalf of the hundreds of seniors who graduate each year from 12 years of education in Salem and across Massachusetts without adequate financial education.
We place a high value on traditional education; however, one very basic education component of money and financial literacy is ignored. We are asking the Salem school system and, eventually, the state of Massachusetts to correct this deficiency and institute a mandatory course of education that will create a base level of financial literacy that must be taken before a student graduates. We believe it would be possible to teach most of this curriculum in a full one-semester course. It should optimally be hands-on education that uses as many real-world experiences as possible.