Most people who learn about proper money management as an adult learn the hard way. A common thread in stories about personal financial recovery is a journey to “rock-bottom.” Often, a financial crisis is necessary to motivate people to change behavior and learn to be responsible for their financial condition and their path towards improvement. This type of trigger seems to be built into human psychology.
Many recovering drug addicts, for example, didn't admit they had a problem until their life was so unlivable that they had no choice. The stakes when dealing with financial problems are usually not as high, but the concept is similar, and is repeated all the time.
Learning from one's own mistakes is the most effective method of education, but the problem is that is requires someone to unnecessarily experience the worst of what life has to offer. Often, these rock-bottom situations could have been avoided, sometimes easily. The cost of losing a house is a high price to pay for
learning to evaluate what you can afford before buying
being skeptical of mortgage salespeople
preparing for economic emergencies
A healthy relationship with money during formative years can help increase the chances of making sound financial decisions as an adult, avoiding the most damaging situations. I'll freely admit that like many others, I entered the adult world - after college, job in hand - without knowing much about managing not only money but other responsibilities like
maintaining a car
. I worked for a distant non-profit organization, spent hours a day commuting, and almost all the money I earned after taxes was required just for my living expenses. My debt increased, and when I was asked to resign, I was living in a bad situation and had no money. I learned some lessons pretty quickly after that.
I seriously doubt having a course in high school dedicated to financial literacy,
even if it had been required
, would have changed my situation. I was, for the most part, enrolled in advanced courses in high school, geared towards going to college and earning college credits while in high school, with the intent of studying music education.
A macroeconomics course would have been more suited for my curriculum than basic personal finance, but I consider myself anecdotal proof that one can have advanced mathematics skills at the same time one doesn't stop the tide of debt until its terrors manifest in the physical world. That is despite the concept of debt's root in basic arithmetic: if you spend more than you have, your financial condition will worsen and you'll never achieve any level of freedom.