One of the most desired, least attended classes I ever taught--and I allowed myself to be talked into teaching it three different times--involved financial literacy for the financially illiterate. Now I see a headline in The Wall Street Journal, asking if colleges should require a course in personal finance. To their credit, the paper offers readers both yes and no arguments.
In simplified terms, “Yes,” because of the massive obviousness that people in the USA have few clues on how money works or how to build wealth. “No,” because the vast majority of financial literacy offerings are thinly veiled sales seminars. How many times did you allow yourself into a presentation given by a financial or wealth manager, thinking “Wealth manager, I like the sound of that!” only to hear pitch after pitch for more insurance?
Yet, we both know that people need financial literacy. I cannot help but think there’s absolutely no ethical reason to withhold that which we know someone needs. I took classes in basic economics, personal finance, and business in high school.
The problem is that money education is like a low fat diet—people who need it do not want it. When offering financial savvy from experts in the financial field at no charge, and with the promise of no sales pitches, I heard crickets.
Looking back, I realize that the people most desiring me to facilitate the class were financially astute and relatively wealthy. They were also the ones most often hit up for money. At one point, in one of the churches I led, we made a one-hour personal finance class a requirement for benevolence. We thought we could help people get their financial lives in order and turn them from borrowers to lenders, which is clearly a Christian principle. Nope—they skipped the class and just went down the street to grab a quicker a donation.
Today, employers tell us that their new employees need better understanding of personal finance. How to find the best deal on a loan, how to balance a cash account, how to keep debt under control, how to plan for retirement, how an employee must create more income for their employer than the employer pays in wages so the company can keep paying wages—all that easy stuff.
Let’s summarize the logic. A) Most employees do not know much about financial matters. B) Employers believe it would be wonderful if they did. C) Therefore, colleges need to teach them. Is that the argument? Because it’s a terrible argument. A+B does not equal C, A+B merely demonstrates a need that employers may choose to fill or ignore. If anything, employers would have a better shot at getting the local schools to teach finance, which is, according to my elders, why my high schools (I attended two) taught economics, business, and personal finance—employers lobbied the school districts.
5 Ethical Questions
- Ethics say what’s good is good for everyone. Teaching personal finance in college leaves people without college floundering. Often those without college are the most vulnerable to financial sharps. Why not demand high schools teach personal finance?
- Ethics say it’s more blessed to give back (to one’s community). How can companies help their local high schools teach personal finance?
- Ethics tend to weigh heavily on personal responsibility. If the employers see a problem, how can the employers fix the problem?
- Ethics love free choice in matters like this. We all know that people gravitate toward whatever seems cool today. How can personal finance become a cool class so more people want to participate?
- Ethics take the role of exemplars very seriously. What does your company do at the leadership level to set an example of personal financial responsibility