Comment by eadmund

From talking to people who, leaving high school, didn't know "obvious" things about finance, had a bad time, and course-corrected as soon as they figured it out: I'd say it's a lot more about knowledge than you're supposing.

You'd be amazed the things people with parents different from yours didn't pick up.

Is that the best way of thinking about it? I think the goal of all primary and secondaey education is to impart knowledge, build skills, and build character. Take sex ed. Building "practical skills", namely applying a prophylactic device to a banana. But it is also about teaching you that there are risks to certain behaviours that need to be considered. And being forced to discuss it sensibly and without giggling every 30s builds character.

Or take maths. Maybe it is reductive but I think the difficulty of it helps build character. Most kids need to do a lot of exercises and memorisation, and the feeling of accomplishment of getting it and doing well? That is character building. Obviously immensely useful too.

Civics (we had "social studies" and I don't recall ever discussing our political system, but at least in theory) involves:

- teaching facts about the system (how many representatives there are, how often elections are held, who is responsible for what, what do courts do, what do juries do, what do MPs do, what do the police do, how are they structurally different from civil servants or the media or universities etc)

- teaching skills (how to vote, how to think about political/societal structures, etc)

- teaching character (instilling civic pride, understanding the long and rich history that led us here today, etc)

I'd say character is necessary but not sufficient. You also need knowledge and motivation.

Knowledge keeps you from investing in ways that mostly lose money. Plenty of young people try to do the right thing, and screw it up.

Understanding compound interest can improve motivation. Exponential functions aren't really intuitive to most people. They tend to make linear projections, which causes people to underestimate the rewards from investments and the damage from debt.

(The article of course isn't saying we shouldn't teach kids this knowledge; it's proposing better ways to teach it.)

I don’t think it needs to be about what they ought to do. You can tell someone, if you abuse credit cards to buy a bunch of stuff you can’t afford, you’ll end up broke. They can make the “I don’t want to be broke so I won’t do that” connection on their own. Lay out the facts and consequences and you’re all set.

Same with sex. You don’t need to tell them not to get pregnant, or get someone pregnant, in high school. You teach them how to avoid it and what happens if they do it.

There is quite a lot of technical knowledge involved: what is inflation, how to defend against it. Various investment instruments, their risk profile. What are popular scams, how to recognize (credit cards is the most popular and dangerous scam IMO). Сompound interest, mortgage calculations, etc.

As to the "character", that's mostly learning about the mathematical concept of "less": spend less than you earn.

Financial literacy is not some magical thing that lies outside the realm of topics like math and history. It is math and history.

Building character might be needed to make good financial decisions, but the knowledge of the mechanics of how markets, debt, investment, compounding, pricing, fractional-reserve banking, etc. works are just concepts like any other. Teaching them is good.

Sure, we won't magically make people less prone to emotional decision making. Teaching about gravity doesn't make you less prone to it either, but understanding how it works is good.

How this "financial literacy can't be taught" thing became a meme I'll never understand. Like most things on the internet, it seems to be a hipster contrarian reaction to the "why isn't this taught in schools" comments you'd see all over the web in the 2000s.

How about we stop trying to get attention for having interesting contrarian "takes" and just try doing the common sense thing and work on improving it from there.