Is teaching interest w/o inflation misleading students?

[Findingnemo]

I don't remember them teaching me anything at all.

I was taught both interest and inflation in high school. I remember it because it was in one of my favourite subjects then. I remember not fully understanding it then, though, but as I matured, I got a better understanding of it.

I don't believe what OP is saying is entirely true, though. I think both interest and inflation are taught in schools, but the problem is, they teach it in a very passive way. They don't teach it as something that is important, but its in the curriculum, especially students who learn economics.
There are many thing that cant be taught in schools. A school is suppose to equip the student to learn on his own and be aware of his surrounding.
Inflation is a very practical thing. A person who has had a good education should be abe to know and understand what it means when his $2 can no longer afford what it could afford a year ago. Not everything can be taught in schools.

Maybe school changed their curriculum in recent years?

I do remember about the inflation but it's nothing practical and they don't teach us about the real world scenario and everyone has to find the inflation and interest from their own expereince and if I am not wrong many people still don't understand the inflation they just assume that the price of good are increasing every year but in reality the value of money just decrease so we have to pay more.

[passwordnow]

I remember in one of my economics class, it was mentioned. And as a student that don't understand everything, it's not highlighted as something important that each student need to understand. I guess if there are schools who have it as part of their curriculum, they need to give that heavy highlight on it that it's one of the reasons why many are still poor. Because they think that it does nothing to their own personal finances. But if they understand how it affects them badly, they'll adjust and will do something to defeat that per se.

[Marvelockg]

So how do we simplify this??? We teach interest and inflation together by showing that interest makes your money grow, but inflation makes things more expensive at the same time.

A good tutor always creates a Ballance in his teaching ensuring that students get a complete grasp of the context of every topic being thought. In maths class, interest can be thought a bit theoretical but that's never the case with other subjects like economics which gives a details information of what interest is about and obviously relates it to inflation when the analogy gets to that.

Inflation is a different topic on it own and every student is expected to learn it very well and at the same time learn how interest works very well. Once you learn both concepts real good, on your own, you should be well grasp enough to create a balance between both concepts.

[tottong]

So how do we simplify this??? We teach interest and inflation together by showing that interest makes your money grow, but inflation makes things more expensive at the same time.

It’s like saving candies in a jar. If you earn 1 extra candy every year (interest) but the price of candy goes up by 2 candies (inflation), you can actually buy less candy later. So money isn’t just about how much you have, it’s about what it can still buy.

When it comes to fiat currencies, the reality is that there are many problems we will face, especially for those who are still saving. Fiat will continue to lose value in the long term and is not an ideal way to save, especially during times of inflation when fiat currencies are under constant pressure.
In the past, people held gold as collateral to grow their investments and those of the past also understood that fiat wasn't the best way to save. Now, there are many possible options such as investing in Bitcoin. In the long run this money is much more productive because we hold assets instead of fiat currency.

I can hardly remember how we were taught in school about this and that the value of the money we hold is not a benchmark for today because in the future, it will continue to depreciate, so it's much better to buy gold or Bitcoin.

[Renampun]

I remember that during my school days, teachers taught about interest and inflation, but the problem at that time was the way they delivered it, teachers only focused on the topic of what interest is, what inflation is, but they were unable to connect it to the reality of students' daily lives, for example how inflation erodes the purchasing power of their pocket money in the next few years. so that students do not understand more clearly what interest really is and what inflation really is, because those concepts were taught as material only, without any real examples that could be more easily understood by students, and that is why so many students fail to understand financial concepts like that.

[serjent05]

I remember that during my school days, teachers taught about interest and inflation, but the problem at that time was the way they delivered it, teachers only focused on the topic of what interest is, what inflation is, but they were unable to connect it to the reality of students' daily lives, for example how inflation erodes the purchasing power of their pocket money in the next few years. so that students do not understand more clearly what interest really is and what inflation really is, because those concepts were taught as material only, without any real examples that could be more easily understood by students, and that is why so many students fail to understand financial concepts like that.

Indeed, in school, they discuss this topic separately just for general knowledge, but I think courses that deal with finances discuss this kind of topic and give advanced knowledge.  That includes integration of inflation in financing calculations, such as interest.  I did not study finance because my course is in another field, but I believe they teach this kind of knowledge (integrating inflation into interest calculation)

[AmoreJaz]

I remember in one of my economics class, it was mentioned. And as a student that don't understand everything, it's not highlighted as something important that each student need to understand. I guess if there are schools who have it as part of their curriculum, they need to give that heavy highlight on it that it's one of the reasons why many are still poor. Because they think that it does nothing to their own personal finances. But if they understand how it affects them badly, they'll adjust and will do something to defeat that per se.

I also believe that it is a must to integrate inflation in solving economic problems. But you can always show the theoretical calculations without inflation to see the difference. You can also vary the percent inflation to know what it can do to your money if the inflation hit to that particular percentage.
Showing the comparative solution will give them a very good insight on what's going on in the real world. An application is always a must I would say.
Because we are not living in a perfect world so they need to see the reality of our life. So knowing how inflation affects our monies, will give them a different approach on how to make money and how to use them.

[Darker45]

I think we're somehow misled for the longest time. And it's intentional. We've always been taught about keeping money in the banks. At least you aren't just saving it, you're also growing it or making a profit out of it. Again, as you've pointed out, without even mentioning inflation.

They're deliberately missing inflation because the moment they include it in the discussion, the whole point of saving money and earning from it will crumble down. Your money in the bank is actually dying a slow but sure death. In a way, you're fooled to believe it's a good thing. The truth of the matter is that you're only providing them free capital. They're making so much money from your money. And you're losing to inflation.

[el kaka22]

Interest/savings is very important but I agree, because of inflation, if all you do is save some money and put it in savings account for a small interest return then you are not going to get a good result.

People should be thought not just savings, but small investments too. Get some crypto, gets some stocks, get gold or silver, get small land if you can, basically collect assets that appreciate with time. Then, you can grow it and make it bigger, but first you have to learn to do this. If you just put it as fiat some aside, then interest you get will be lower than inflation and it will not worth anything on the long run. Obviously this isn't really that easy for most of us, but if you can make it work then it will be fine.

[passwordnow]

I remember in one of my economics class, it was mentioned. And as a student that don't understand everything, it's not highlighted as something important that each student need to understand. I guess if there are schools who have it as part of their curriculum, they need to give that heavy highlight on it that it's one of the reasons why many are still poor. Because they think that it does nothing to their own personal finances. But if they understand how it affects them badly, they'll adjust and will do something to defeat that per se.

I also believe that it is a must to integrate inflation in solving economic problems. But you can always show the theoretical calculations without inflation to see the difference. You can also vary the percent inflation to know what it can do to your money if the inflation hit to that particular percentage.

This will depend on whoever is assigned to the syllabus or curriculum of the school. If they're not the principals then it is the education department of the government that needs to amend this. Because it's now being part of people's lives to think of how high it will be the next inflation for the next month. It's been so long that people are not really bothering ourselves with this issue. But now that it has grown a lot, I guess that everyone needs to focus on it and how it can give idea on how it's contributing to a person's struggle financially.

[dezoel]

Not really that many places "teach" interest, it is something we learn during life, it is not something that someone comes to use and explains what interest is, we just live with it. Reality is that we have to learn to also live with inflation, and if inflation is higher than the interest then we should learn to not go with it too much, wouldn't be good for any of us. Obviously things aren't that easy, because many people fear anything aside from interest which is causing the problem.

[Cheema02]

How do you teach interest in your class?

The educational system in my country doesn't include any of these economical and personal finance subjects. It is what we mostly needed and we are only learning that when we become adults and we have to deal with it through experience and failures. I think that it's not only about inflation and profiting that we should add to what the schools teach to the children. And it should come from someone who's made well in life through their own experience and not just theoretical teaching on how to be financially free. If there's that kind of program that the schools can adopt, it will help starting from kids to being young adults.

Yes, you are right we should be revert our teaching system from theoretical to practical way. I strongly believes that if we teach with examples thats exactically related to daily matters like how to saving money, how to manage loan, or paying installments than students will learn more. So if we study real life cases as an example than its helps a lot to students to understanding how interest works and how it can manage. In our country education does not related to personal finance and that's the actual skill which we need. A lot of people learn about money with the passage of time and with their failure. People learn about finance management through their mistakes not from texet book slybass. So the learning point is that schools should adopt such programs through which students learn about financial stability.

[Oluwa-btc]

I think teaching only interest without inflation in schools is misleading because it gives students an incomplete picture of how money actually works in the real world.

I think the whole picture of interest snd inflation have been understood wrongly but then you might be wrong about your thoughts cause back then in school I was taught both interest and how to apply it in every day to day businesses, inflation and deflation as well and how it tends to affect the value of something while affecting the economy pace, so regardless I still think it should be taught in schools broadly for better understanding and application in real life.

[Ocham]

How do you teach interest in your class?

The educational system in my country doesn't include any of these economical and personal finance subjects. It is what we mostly needed and we are only learning that when we become adults and we have to deal with it through experience and failures. I think that it's not only about inflation and profiting that we should add to what the schools teach to the children. And it should come from someone who's made well in life through their own experience and not just theoretical teaching on how to be financially free. If there's that kind of program that the schools can adopt, it will help starting from kids to being young adults.

Many of us study a lot yet remain unemployed. In our society, small businesses are not considered “real work,” which is why our youth are not interested in starting small businesses. Our country’s education system teaches us how to get a job, but it never teaches us how to start or run a business.

Alongside your studies, start a small business. You’ll see that by the time you finish your education, your business will have grown significantly. However, always remember that business comes with both profit and loss. If you make a profit, say Alhamdulillah and be grateful. And if you face losses, do not quit—try to overcome them and keep going.

[Jateng]

Inflation and interest are taught in school, as far as I remember, in separate chapters. But I understand your point: how banks must maintain consistent business profits while inflation continues to accelerate.

Actually, I've also begun to understand this over the past year, out of curiosity about whether banks would be able to offer the same interest rates as fiat currencies if I saved in gold.

In terms of education both are separatebut in reality they are linked to each other. When inflation increases interest rates in banks also increase so that the real value of the money that people save remains constant over time. Inflation has been seen more in the last few years. day after day things are getting more expensive and the currency of money is the same due to which inflation has a greater impact on our lives. if you deposit gold in a bank it will not give you interest on it because gold itself is a protection against inflation.

[mindrust]

interest exists because of inflation so it is important to learn both as they are connected. Interest is simply the price of money because money has time value. Kids definitely should learn these when they are young so they won't repeat the mistakes of their parents. My parents were financially illiterate and I had to figure out all those on my own. That's intentional though, I know that much. Teachers in college don't teach stuff because if everybody knew finance well enough, corporates would go bankrupt since they wouldn't find employees to abuse. The system is designed to create victims. That's how the rich prosper while the poor keep suffering and reproducing more poor people.

[Betwrong]

but who voted on deciding we teach personal finance instead of economic systems?

You teach interest and inflation as individual issues. How does this have an impact on YOU and your money. What should YOU do. And sure that's good if you have money and choices. But most people don't have enough of either for this to make much of a difference.

Wages don't follow the trend of productivity anymore. That's the thing that broke. People are creating and producing more, working more and getting less of the value they create. That began in the 70s and just kept on going. But we don't teach that because then you'd have to do that because it gets into the uncomfortable territory of policy choices, who gets it, and so forth.

Maybe I am asking too much from schools. They're not going to teach teenagers monetary policy. But to say "financial literacy" when really it's "here's how to work your way through a system we won't explain" that's dishonest.

I' m sorry, I didn't get what exactly is dishonest here, but probably I should let it pass. Also, I disagree on "People are creating and producing more, working more and getting less of the value they create." I think it's wrong to generalize like that. Sure in dictatorships, where the most of what is produced have been always stolen by the governments and their relatives, it is exactly like you said, but there are other countries, you know.

[Jatiluhung]

In economics classes, lessons about currency, even the history of currency and how inflation and deflation work are usually taught. However, the curriculum rarelyy covers these topics in sufficient depth, so the teaching is usually only superficial. If you are a teacher, your task may be to explain these topics in more detail and provide examples from the current situation. This is actually important information that the younger generation needs to know. However, students are sometimes not very interested in subjects related to this topic.