Why the first money lessons came from home economics, and what they taught

Eleven people, then seventy-four

The first organized attempt to teach households about money in the United States did not come from banks or from economists. It came from a chemist. Ellen Swallow Richards, the first woman admitted to the Massachusetts Institute of Technology, organized a conference at Lake Placid, New York, in 1899. Eleven people came. By the tenth and last conference, in 1908, there were seventy-four.¹

They chose the name "home economics", and they meant the second word. The movement, in the words of a historian of it, "identified itself with the ancient definition of economics, i.e., the administration of the home".¹ Richards herself put the grievance plainly: "Political economists have usurped the word to mean production of wealth."² She wanted it back.

What they taught about money

The home economists' tool for family money was the "suggested budget": a table showing how a family at a given income should divide its spending.³ The idea behind it was that industrialization had turned the home from a place that produced things into a place that bought them, so the household's main economic skill was now consumption, and consumption could be studied and taught. By the 1920s the federal Bureau of Home Economics was running large budget studies that set consumption standards for farm and city families.³ A 1935 university course included a unit on "Problems in Consumer Buying".⁴

That is the origin of the personal-finance budget: a government-published table of what a family at your income ought to spend on food, rent and clothing.

The federal money, and who it was for

Two laws paid for the subject. The Smith-Lever Act of 1914 created the cooperative extension service through the land-grant universities and named home economics among its subjects. The Smith-Hughes Act of 1917 funded vocational education in agriculture, trades and homemaking, and home economics was the only vocational subject the act recognized for girls.⁵ The subject that carried the household's economics was, from its first federal dollar, a subject for girls.

The founders' professional body, the American Home Economics Association, was formed in 1908 or 1909 with Richards as its first president. It had more than 50,000 members in the mid-1960s and about 5,000 by 2012, by then renamed for family and consumer sciences.⁶

What this founding was, and was not

This is the one founding in the field's history that was unambiguously on the household's side and was not a reaction to a scandal. Richards and her colleagues set out to give the household a science of its own, funded it through schools and extension agents, and reached farm kitchens that no bank ever would.

It also had limits that the later history did not remove. The budget tables told a family how to divide its income among purchases. They did not ask what the sellers of those purchases kept. And the subject was placed, by law, in the girls' curriculum, which is where it stayed as it narrowed into cookery and sewing. The household got its economics back in 1899, as a section of a subject for girls, and lost it again to the narrowing over the following fifty years.