Why Is Personal Finance Never Taught In Schools?

After graduating from college, Jimmy had been working as a consultant at a top tech firm since last 3 years. Hailing from a working class background, Jimmy was one of the brightest students of his batch and had secured a well-paying job right after graduation.

Within a year, he had bought his dream car and managed to upgrade to a large condo in a central city district. Having just come back from a world tour, he hired an interior design firm to renovate his rented home with a gym, private cinema, pool table, massage chairs and various other luxuries he considered as necessities.

While all this was happening, his financial situation was getting exceedingly vulnerable.

He had defaulted on two bank loans while his habit of rolling over his credit card bills forward was turning compulsive. Having already taken two annual salary advances from his company, his monthly pay was one third of his actual package now.

Asking family & friends for support was futile as nobody would believe him, given his exuberant lifestyle. Over the last one year, both his parents had developed health issues and looked up to him for paying healthcare bills. To top it all off, his company had started to downsize key functions on account of economic downturn, and he was given a 3-month notice to resign. ??

Jimmy was in a royal mess, faced with a situation he had never expected or had ever been trained for. Yet he had no idea how much he had made & spent in the last 3 years OR how his salary disappeared by the middle of every month.

> > > > I am sure many of us can relate to Jimmy's battles which we have either faced in the past or might go through in the future, if we embark on a similar journey.

Some of the root causes leading to such situations are highlighted below:

1) Teaching "Money Management" is not a priority

Our school, college and university curricula are designed to produce salarymen.

The course content is aimed to equip students to learn professional talents while ensuring their future employers stand to gain the most out of their skills. That's why we have clever doctors, lawyers, engineers, accountants, business managers but unintelligent money administrators who struggle with either lots or lack of money.

To see qualified accountants & MBAs struggle with understanding mutual fund basics is a cringeworthy experience. These same people are experts of their employer's P&L statements and in ways of finding budget control methods to enhance quarterly EBITs.

Yet when asked about their own annual net worth growth or their last 3 years income to savings ratio, they get perplexed to find an answer.

No institution is bothered to teach the laws of spending, savings & investments, or on how to do your own taxes, as it is considered a lost cause. The reason: While you don't get interviewed for your own personal investment techniques, you do get asked how a company budget needs to be planned to generate more savings & profits.

2) The Naivety of our parents & families

Most salaried class people belong from salaried class backgrounds.

Our parents have forever lived off their salaries and they eventually pass on the same set of values to us. Most parents, despite having the best interests of their children at heart, fail to inculcate in them the principles of Money and Financial Do's and Don'ts.

The topic of Financial Intelligence is not something talked over dinner tables. Managing money matters is considered a private affair of either both or one of the parents. Sharing and learning from family's financial hardships & being ready with a safety net is a novel concept explained to youngsters.

Although it'd be unjust to put the entire blame on parents as, after all, they themselves were never educated on the subject of making the most out of their salaries. Yet we find people not learning from their mistakes while passing on the same painful baton to their kids

In the end, the inability to manage money (or the lack of it) becomes a generational issue.

Who benefits from all of this?

Making the masses financially intelligent does not go well with the global elite.

Imagine if people stopped going to jobs and started living off their own means (savings, investments etc.), who will serve at the restaurants or work at the plant floor? We all have seen a glimpse of this scenario during post-COVID, amidst the Great Resignation, where people lived off their welfare cheques, hoping never to see their workplaces again.

Keeping people stuck in the salary trap and holding them immature about money is the best deal to secure cheap & unlimited labor. This principal has been valid since the last 250 years post Industrial revolution and will continue to be so for times to come

Modern education system has evolved based on the needs of large corporations & governments. It is dictated by their requirements and has to follow a set framework which suits their own best interests. Unfortunately, financial freedom of the public is not their in the list of interests.

Is there a way out? ??????

Yes, there is but it takes learning, patience, efforts and commitment to venture out on this path. These are traits which are becoming more and rare in today’s day and age of widespread ease, folly and comfort.

Everyone wants to take control of their finances & become rich overnight but putting in the pains is a repulsive idea for many.

I will write more on the subject (solutions, possibilities etc.) as I gather feedback from the readers

More on this later…?