What Is The Best Personal Finance Tip You Learned In High School?

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).

high school personal financeIn 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!

34 Comments

  1. DC @ Young Adult Money on August 28, 2012 at 5:42 pm

    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.



  2. Liquid on August 28, 2012 at 8:48 pm

    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.



  3. Shawn on August 28, 2012 at 11:22 pm

    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.



  4. Andrew on August 29, 2012 at 7:22 am

    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.



  5. Mrs. Pop @ Planting Our Pennies on August 29, 2012 at 7:30 am

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



  6. Chris on August 29, 2012 at 8:34 am

    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,



  7. Jordann @ My Alternate Life on August 29, 2012 at 8:37 am

    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.



  8. Teacher Man on August 29, 2012 at 8:51 am

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



  9. Teacher Man on August 29, 2012 at 8:51 am

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



  10. Teacher Man on August 29, 2012 at 8:52 am

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



  11. Teacher Man on August 29, 2012 at 8:52 am

    It’s catchy and “real world-ish” eh?



  12. Teacher Man on August 29, 2012 at 8:53 am

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



  13. Teacher Man on August 29, 2012 at 8:53 am

    Simple, but important, no doubt.



  14. Joe on August 29, 2012 at 10:07 am

    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.



  15. Teacher Man on August 29, 2012 at 6:39 pm

    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.



  16. SmallIvy on August 30, 2012 at 5:11 pm

    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.



  17. Tanis on August 30, 2012 at 5:12 pm

    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.



  18. Happy Chick on August 31, 2012 at 5:15 am

    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: www.getsmarteraboutmoney.ca/en/ed…fault.aspx



  19. Teacher Man on August 31, 2012 at 8:44 am

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



  20. Teacher Man on August 31, 2012 at 8:46 am

    I’d take that ROI all day long!



  21. Teacher Man on August 31, 2012 at 8:46 am

    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!



  22. Michael on September 1, 2012 at 9:10 am

    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.



  23. Michal on September 3, 2012 at 1:33 am

    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.



  24. Edward Antrobus on September 3, 2012 at 8:33 am

    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.



  25. Mark on September 3, 2012 at 8:39 am

    Best Advice – Start Now

    you will have the habits down when you need them.



  26. Teacher Man on September 3, 2012 at 5:33 pm

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



  27. Virginia on September 7, 2012 at 10:50 am

    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.



  28. Teacher Man on September 7, 2012 at 8:53 pm

    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.



  29. Michal on September 21, 2012 at 1:25 am

    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.



  30. Teacher Man on September 22, 2012 at 8:59 am

    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.



  31. What Other Bloggers Are Saying #25 on August 18, 2013 at 8:01 pm

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  32. mpars on January 25, 2014 at 4:43 pm

    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.



  33. Kyle on January 26, 2014 at 9:18 am

    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).



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