1. what colleges cost, what salaries various majors get, and how that works with tuition loans
2. what the terms profit, loss, revenue, equity, assets and liability mean. What a balance sheet is, what a profit & loss statement is
3. how markets work
4. how compound interest works
A bonus would be how fractional reserve banks work
When I was in, I think, 6th grade, could have been 7th, my mom gave what to me at the time was a huge allowance. I had been getting a few dollars a week, she sat me down and told me she was going to give me what in today's money would be around $200 a month, from what I remember. Sounds way high, but I think that is what it was.
The catch was that it had to cover everything. School lunches, school supplies, clothes, bus fare, music, books, video games, movies, anything I wanted to buy, that was it. I couldn't come to her for more money if I ran out.
That taught me, in a slightly brutal way, the following two personal finance lessons:
1: If you spend your money on this, you won't have money to spend on that.
2: If you spend your money now, you won't have money to spend later.
Which of course sounds trivial and most people would say that they know these things, but many people don't act like they know these things.
I would assume she was trying to teach me a lesson, but if she was it was a case of "those who can't do, teach". When she kicked me out of the house for the last time, she said she wasn't too worried about me since I had more money in my checking account than she did.
RIP my mother the economist.
And the cousin of those two - "if you spend more than you earn, you will be broke".
Managing personal finances really illustrates the gap between knowing something and acting on knowledge. The gap is vast.
6. Do not fall for crypto scams
It's impossible for a layperson to use crypticut effectively without becoming an expert, so the only broad education you can give is "stay away, as with day-trading stocks, and options, and any fast money schemes".
For example: Check cashing scams are extremely common, and can be financially ruinous. Many of these scams could be avoided if students knew that checks take time to clear, and were warned to be extremely suspicious of requests to spend or give away money from a check that might not have cleared.
Bad checks were an easy concept to understand when everyone was carrying around a handwritten checkbook register
Why? Fractional banking hasn't been a thing for decades. Tobin called re-loaning deposits the "Old View" in 1963:
* https://cowles.yale.edu/sites/default/files/files/pub/d01/d0...
Some countries haven't had reserve requirements for over thirty years:
* https://en.wikipedia.org/wiki/Reserve_requirement#Canada
Roche has a good paper on the modern monetary system:
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625
See also the Bank of England:
* https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
Tax treatment of different forms of income
What are capital gains? What does it mean for them to be realized vs unrealized?
This is personal finance, for all, not professional accounting for optimizing cash flows. it's far moren important to learn the basics of not getting robbed by predatory businesses, so that they can have a chance at saving some money to turn into capital gains later.
Every mortgage contract I've bought included a separate page that said simply "I have read and understand this contract" that had to be signed.
At what point does some personal responsibility come into play?
Yes, but high school is your last chance to get it into everyone's heads.
That federal income tax in the US is levied in a progressive fashion; for example, to be taxed at the top income bracket at 37% as a single filer in 2022 meant that any money made OVER the amount over $523,600 is taxed at 37%.
Too many people I know think that all of their money is taxed at a flat XX% based solely on the highest income tax bracket they are in. This is simply not the case at all.
The estate tax is the most egregious example.
The "don't take a raise, you'll actually make less" factoid is way too common.
Don't get me wrong, intermediate economics topics are useful and valuable, but I think people are overestimating the level of basic knowledge young people have by a huge margin. It might be good to culminate in a crash course in investment banking and hedge fund management, but let's make sure we have a rock solid foundation of practical personal economics that empowers people to take advantage of any level of income, even chintzy $9/hr teenage summer jobs.
Also, workers rights and financial security of identity - cover basic workers rights, unionization rules, benefits, drawbacks, when you need a lawyer, where to report employer misconduct, small claims court, identity security and credit bureaus, credit freezes, and so on.
Edit, also: http://www.debtdeflation.com/blogs/2012/03/29/krugman-on-or-...
Fractional banking hasn't been a thing for decades. Tobin called re-loaning deposits the "Old View" in 1963:
* https://cowles.yale.edu/sites/default/files/files/pub/d01/d0...
Some countries haven't had reserve requirements for over thirty years:
* https://en.wikipedia.org/wiki/Reserve_requirement#Canada
Roche has a good paper on the modern monetary system:
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625
See also the Bank of England:
* https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
Where my kids went to high school, one of the teachers always assigned a term paper on the payday loan industry. I think it was a subtle form of personal finance education.
I was surprised when in my middle school classmates didn't know how banks worked and they were astonished that banks lent out your money that you deposited to other people :/
This should also be part of the student loan approval process.