Plenty of parents do not know how to manage their finances any more than any other things that they do not know, which a school is supposed to be responsible for teaching. Financial literacy is one of the most important things that a person can learn. Society would surely benefit if classes were taught on the subject in high school.
Financial literacy for the average person consists of two things: do not buy things you don't really need / don't spend more than you have, and compound interest. I can't speak for anyone else but I did learn what compounding interest was in school.
I can't imagine a whole class being dedicated to these topics, but then people who only need to fill out a 1040 also complain they "weren't taught how to do taxes"; i.e., fill out a form with simple instructions provided.
At some point we have to recognize the bar is already pretty low. There is no wizardry involved in "financial literacy" unless you start getting into advanced investment / retirement topics. It just takes a very simple attitude shift. The problem is not that most people are too uneducated to figure out that a 40k/year job doesn't pay for a 100k degree: they learned that in elementary school. The problem is they never even think about it, and if they do, they don't care. I don't even mean this in a negative way: it's a lifestyle that would stress me right into the psych ward, but millions of Americans never worry themselves about how they're going to pay for something so long as they can keep the lights on and eat this month.
If they did care, they would go to cheaper schools to get the degrees; look how many of these degrees come from outrageously priced private schools when cheaper options are readily available. Look at how many people drive around 50-80k SUVs. Americans complain a lot about prices but they are not actually that price sensitive. They just assume they can do whatever they want and the system at large will just work everything out.
> Financial literacy for the average person consists of two things: do not buy things you don't really need / don't spend more than you have
Great, now take out a mortgage at a good time, predict interest rate and house prices manage your savings and plan your retirement, be self-employed for a year and correctly identify what is tax deductible and what isn’t, recognise when you are being sold a bad financial product.
There are all things a middle class person needs to deal with.
> Great, now take out a mortgage at a good time, predict interest rate and house prices
Nobody can do this. It’s not part of basic financial literacy. A few people who make careers out of investing or real estate attempt it and many of them fail.
If you are a normal person, you find a house that needs your basic needs in a decent area that you can afford and you buy it. You don’t try to throw darts at a board to figure out if the housing market is going to crash or the fed is going to lower rates. If you could reliably predict these things it’s your day job.
> manage your savings
Simply putting your savings into a savings account pr even under a mattress is more than most Americans do and is self-evident. Are there more optimal places? Maybe but if it matters to you you have the time to figure it out; Americans are doing well to accumulate 500 in emergency savings anywhere. Worrying about 5% interest money markets vs maybe an index fund for some portion is pointless at that level. (Ed - median emergency savings is 5k. This doesn’t require management.)
> plan your retirement
This becomes important as you approach retirement age, sure. Until then all you need to worry about is stuffing away as much money as you can because of that “compound interest” thing.
> self-employed for a year and correctly identify what is tax deductible and what isn’t
There’s a public website for the IRS where this is all laid about, but even Americans with easy
standard taxes pay an accountant because they don’t want to add a few numbers together and look at a tax table.
> recognise when you are being sold a bad financial product.
If you are worried about “financial products” and you’re not at retirement age, all you need to know is “it’s a scam” or you’re very rich.
