We're looking for your best personal finance tip that was learned in school because I get to create a chapter on it in my upcoming business class!
I’m in the process right now of putting together a general business course for one of my high school classes I get to teach starting next year. I have a ton of freedom with what I want to emphasize in the course and I figure I can budget about 3-4 weeks for personal finance basics if I want. In order to get the best course possible, I thought I would reach out to our super-brilliant readers and ask you to help the leaders of tomorrow!

What (if any) personal finance tip do you remember best from high school? Did it sort of hook you in to learning a little more about finance in general?

For me, the tip that instantly grabbed my attention was how compound interest worked. I was amazed at how a person could quickly earn money on the original interest of their investment. The concept of using “the bank’s money” to earn more money for me seemed brilliant (and it still does today to be honest).

In order to fully drive the point home I still remember our teacher making a small spreadsheet and gradually filling in (with us doing the calculations of course) how much money we could have in the bank at 55 and/or 65 if we invested the equivalent of a pack of smokes every day. As he poignantly pointed out, there was more than one student in the class who smoked more than a half pack-a-day so it was doable if one had the right motivation. When we saw the numbers begin to snowball and finally end up with us as millionaires (admittedly I didn’t fully understand the concept behind inflation-adjusted returns at the time) everyone in the class was stunned. If you have ever been in a high school classroom before you know that silence is at a premium and awed silence is the sweetest music a teacher can hear. To this day that lesson still motivates to save 10%+ and all the rest of that stuff. If someone had started teaching us financial basics by taking us through the painstaking process of making a budget I might have reacted differently to the whole thing so obviously a few “hooks” to grab attention are crucial to the overall presentation.

This is why I’m looking for your help. I’d love to have a full course dedicated to personal finance, and I might actually pursue the proposal in the future, but for now this is what we’ve got. Help me make it the most attention-grabbing it can be. Reach way back (some have to reach a little farther than others) and think about what you would have been thinking about while sitting in a high school classroom. If you’re at all in the honest ballpark chances are you were thinking about the cute boy/girl next to you and the party on Saturday night. It has to be cool enough to distract from that! Tall order right?

So let’s hear it enlightened readers of Young and Thrifty. Now is your chance to help one of those know-it-all teachers and let them know what is really up!

Article comments

34 comments
mpars says:

This may be an older article but I felt I needed to comment. We were taught in grade 11 math how to calculate loan tables by hand. None of us got the real message behind it because we were so focused on the details that we didn’t see the big picture. I wish we’d looked at it from a different angle…and used spreadsheets!

The other thing I wish I’d been taught, this isn’t really a money thing, is that university is not necessarily a better investment than college! College was really looked down upon for the “smart kids” and hardly discussed in the advanced level courses. Having done an undergrad degree, started a MSc, transfered to a PhD, then back to an MSc to graduate 4.5 years later I WISH someone had told me that the JOBS come from college. The lost salary difference (if there even is one because many college-trained jobs are very lucrative) needs to be compared to the lost earning potential and cost difference of university years. Too many of my friends are over educated and under employed from going to university and many are now going back to college to get a job. I don’t regret going to university, but that’s what I wish I’d learned.

Kyle says:

I hear you mpars! This the problem with having math teachers teach personal finance. I say this all the time and get blank stares or even hostility in return. Knowing the math is not the most efficient use of time considering all the specialized calculators you can find online these days.

If you read around the site a little more and check out our sister site (www.myuniversitymoney.com) you’ll find all kinds of articles talking about the misinformation out there on college vs university. It’s also an ongoing topic on our podcast (More Money for Beer and Textbooks Podcast).

Virginia says:

I was very lucky in high school that I had two teachers who explained compound interest to me. One was my calculus teacher who did so one day when there was an extra 10 minutes at the end of class. He also explained what an IRA was. The other was an economics teacher and it was part of the curriculum.

Those lesson, plus my mom telling me to visualize purchases in terms of hours worked really helped shaped my relationship with money.

Teacher Man says:

I always think of purchases in terms of hours worked! The funny thing is that now that I make more money I still think of it in terms of my old minimum wage job. It has probably saved me a lot of money over the years now that I think about it! Thanks for the tip.

Mark says:

Best Advice – Start Now

you will have the habits down when you need them.

Umm, we learned how to balance a checkbook in 8th grade. And I seem to recall a project on budgets in 12th grade health (family life), but I don’t remember anyone taking it seriously.

Michal says:

My Best Finance Tip (Given by my teacher):

“Risk and money come together, so you should be able to manage both”

It is helping me in my professional career as well because I am a trader.

Teacher Man says:

That’s a great tip. Properly understanding the concept of risk and reward is essential for the long term right?

Michal says:

You are right Teacher Man. Properly understanding the concept of risk and reward is essential in trading business that includes forex, stocks, gold trading and other investment business.

Teacher Man says:

Wow, I’m trying to think of how I would try to explain Forex to my students… That’s even harder than equities in my opinion.

Michael says:

Back when I was in high school, credit cards were not widely used. Credit was very hard to obtain. Car salesman had a way around that with something called the Conditional Sales Contract. We had a teacher that taught us all about those contracts and while the details escape me, the one thing I remember over 40 years later, is that you should never buy unless you can afford it – because credit may seem like a good idea, but there is a huge cost to pay for that convenience.

Happy Chick says:

There are two big things that I would have appreciated in high school:
1) an explanation of exactly how credit cards work and the impact of paying only the minimum payment – companies start inundating you with cards as soon as you leave high school and I was woefully unprepared; and
2) a discussion on what my future career plan was REALLY going to provide in terms of salary, so I could decide whether or not it was worth the student loan debt I was taking on.

Also, thought I should mention a great resource out there from the Investor Education Fund. They have great curriculum tools and resources for all grades: http://www.getsmarteraboutmoney.ca/en/education-programs/for-teachers/Pages/default.aspx

Teacher Man says:

Thanks Happy Chick. I actually have used resources off of that site before! I agree on both of your points.

Tanis says:

The lesson I learned in Carreer and Life Management (CALM) class was to invest in an education (university, college or trade school) to increase my earning potential down the road. I invested in a engineering degree, and now that I’ve been out of University for four years, my annual salary is almost 3 times my total tuition cost. Not a bad ROI.

Teacher Man says:

I’d take that ROI all day long!

SmallIvy says:

I didn’t learn it in high school, but showing the power of compound interest against you is an important lesson. For example, show the amortization on a 30 year loan and how little goes towards reducing the loan during the first fifteen years. Then show that with one additional payment a year, you can take 8 years and probably save $100,000 or more. Finally, show just how much one pays for a $50 dinner if financed on a credit card paid off over 10 years.

Teacher Man says:

That’s a great point SI. I’m all about showing how compound interest can work for you, but you’re definitely right in that it can be equally powerful the other way!

Joe says:

Stream an episode of “Til Debt Do Us Part” from Slice.ca. Find the worst couple that you can. $100k in debt, a crumbling relationship, and screaming kids will definitely scare the future working poor, if not reform their lifestyles. Good launching point to talk about the evils of credit cards, pay day loans, car loans, student debt — consumer debt in general being a bad idea.

Teacher Man says:

Not a huge man of ‘Til Debt Do Us Part to be honest with you, but you’re right. In this limited context of trying to scare kids show students what can happen if they make bad personal finance decisions, it might be worth it.

Unfortunately I had zero personal finance instruction in school. I didn’t even learn how compound interest worked until my first finance course in University. I think this course is seriously needed! I suppose the one thing I learned, was the basics of budgeting. That was from my involvement in fundraising committees and the like. We only had so much money, so we either had to bring more in and cut stuff. I think knowing how to budget would be a good topic to cover.

Chris says:

Hi,

I think this is a great initiative you are putting forth and more schools should be offering it.

You can also teach RRSP’s/TFSA’s and income tax.

You can show how federal charges taxes based on brackets, provincial charges taxes based on different brackets and how RRSP’s and TFSA’s can help reduce those taxes (As well as save for the future).

RRSP’s can lower your taxable income and potentially put you in in a lower bracket that can help you save even more in taxes.
TFSA’s can help save on taxes by not having any capital gains appear as your taxable income.

Good luck,

Teacher Man says:

Yup, we’ll definitely go over registered accounts vs non-registered accounts and the tax treatment differences between them. Thanks!

Market Value. Something is only worth what someone else is willing to pay for it. =)

Teacher Man says:

Something someone should have told the makers of my hockey cards becketts a long time ago…

Andrew says:

I remember taking business math in grade 12 and did well in it since it was real world stuff. I think we touched on paying bills, interest rates and debt. As you mentioned, compound interest was a topic that really registered with me. Accounting class was also good, learning about assets vs liabilities was valuable.

Teacher Man says:

Sounds like you got a lot better education than many of us Andrew.

Shawn says:

Great post! I honestly can’t remember one financial tip I learned in high school. I really love this cigarette example you learned though. Props to that teacher.

Teacher Man says:

It’s catchy and “real world-ish” eh?

Liquid says:

Your students will be so lucky to have a business course in high school. I wish I had something similar when I was their age. I believe students will want to learn something if they find it interesting. Talk about how education about personal finance can change their lives forever. Lots of studies show people who have a budget are wealthier than those who don’t. Explain how it’s possible for 2 individuals to make the same top line but one can use tax advantages to end up with more in their pockets. Or how easy it is to make passive income with the help of compound interest and patience. I’m sure they’ll get plenty of inspiration from your class.

Teacher Man says:

Thanks Liquid, I honestly just hope 30-50% sinks in. If I can get that far, that’s a victory.

Honestly, sounds incredibly simple but: Bring in more than you spend. When you get your first job, there’s an unlimited number of things you want to blow cash on. Making sure you are living within your means is #1.

Teacher Man says:

Simple, but important, no doubt.