Tuesday, September 1, 2009

Should Personal Finance Be taught in School?

Few things are more important than your personal financial situation. Health, of course, is paramount, followed by your personal relationships. But your personal financial situation has to rise above biology, chemistry, and the literature classes I never liked. Trade in the Beowulf for some Buffett and now we're talking about something useful.

While financial planning encompasses a vast number of things, if we just focus on one key element, the importance of teaching it will be readily apparent. That key is the cornerstone of finance – the time value of money.

Financially literate people understand and can calculate the time value of money. That's a huge advantage. If you can't calculate the time value of money for yourself, you'll always need other, more financially literate, people to do it for you and, of course, potentially take advantage of you. Here are a few things this small part of personal finance can teach you to do.

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