Schools Urged To Teach Value of Money
Americans have a thing or two to learn about managing their personal finances. Just ask Timothy J. Raftis, the vice president of the country's largest nonprofit credit-counseling agency.
"We get over 100,000 calls a month from consumers who are in over their heads," Mr. Raftis said of his Orlando, Fla., organization, InCharge Institute of America. "The average 'successful' person we work with takes somewhere between four and five years to dig themselves out of credit card debt."
An increasing number of those frantic callers are young people, Mr. Raftis said, newly minted college graduates burdened with thousands of dollars in consumer debt and poor credit records. His own daughter, a senior in high school, started receiving solicitations in the mail from credit card companies a year ago.
But in today's economy, spending with plastic is a fact of life. So, as InCharge works with thousands of people already struggling with the consequences of bad financial decisions, it's also working with a broad coalition of private and public interests to promote preventive education for the next generation of credit card holders.
"This is a serious national economic issue," Mr. Raftis said. "Responsible use of credit is a good thing, but you can't navigate all the choices out there today without understanding the fine print. The younger they learn, the better."
A Forgotten Subject
The problem begins with the fact that many parents don't teach their children about money management, Mr. Raftis said. "This seems to be the last taboo topic for parents when it comes to communicating with their kids," he said.
And schools aren't talking much about it, either. The standards and accountability movement sweeping the nation has states and districts focused on teaching and testing students in basic academics—sometimes to the exclusion of virtually all else.
"Only 10 percent of students learn about personal finance in school," said Dara L. Duguay, the executive director of the Washington-based Jump$tart Coalition for Personal Finance Literacy. "The basic reason for that is that, generally, personal finance in this country is taught in electives like business or family and consumer science."
Nearly all states include some type of personal-finance education in required or recommended curricula, but only three—Florida, Illinois, and Rhode Island—mandate that schools offer and students complete a course in personal-finance skills, according to a June report from the National Conference of State Legislatures in Denver.
The trick, Ms. Duguay said, is convincing states that personal and consumer finance are vital subjects that fit naturally into other curriculum areas."We're not advocating taking out existing standards," she said. "But schools can include personal finance in classes already required, like math and economics. You're teaching addition and subtraction in math, so why not teach it through balancing a checkbook?"
Some states are moving in the right direction, she said.
Louisiana launched a pilot program last spring to train high school teachers to use personal-finance curriculum materials. Some 40 high schools across the state are teaching the concepts this year, and state officials plan to offer similar training to middle and elementary schools beginning next spring.
"We have a very strong economic strand that runs K-12," said Nikki Bray Clark, the social studies program director for the state education department. "Teachers have to make sure kids learn it, because we have high- stakes tests."
The nationwide campaign to teach young people about money management is largely coordinated through the Jump$tart Coalition.
A nonprofit organization founded in 1995, Jump$tart brings together a diverse range of partners that includes the InCharge Institute, the Federal Trade Commission, Visa U.S.A., the Mortgage Bankers Association of America, the American Savings Education Council, and 4-H U.S.A., among many others.
The group, which also has 25 state affiliates, serves as a clearinghouse for more than 200 financial-literacy curricula, some 70 of which are free. Some of the curricula were underwritten by credit card providers, such as American Express and Visa.
Visa drew some flack last month when it launched its Visa Buxx "reloadable payment card" that allows parents to set a spending limit for their children and pay that amount into a special debit-card account. While the company touted the card as a tool to teach young people responsible spending habits, some consumer advocates argued that the product merely serves to addict children to plastic at an early age.
Visa is currently running a newspaper advertising campaign promoting a curriculum package it developed in partnership with the Jump$tart Coalition, called "Practical Skills for Life." The online material takes teachers through 14 lessons on topics that include making financial decisions, buying a home, saving and investing, and choosing credit cards.
"When you go to the [Web] site, it's not like you see our logo emblazoned everywhere and 'brought to you by Visa,' " said Visa's public-affairs director, Rhonda A. Bentz. "We spent a lot of money on this, it's something we care about and believe in, and we didn't develop the materials—educators did."
Another major player in the Jump$tart Coalition, the New York City-based National Council on Economic Education, is in the middle of a three-year program to tie financial literacy into the voluntary national content standards in economics written by the council in 1997.
The effort, financed by the Bank of America, entails revising existing educational materials in personal finance for all grade levels, setting up a Web-based training institute for teachers, and holding workshops for parents and teachers.
"There's a real problem getting schools to teach this, because of a focus on [traditional] academics," said John E. Clow, the program director for the NCEE's personal-economics project. "But my feeling is this is real life—it's socioeconomic, it's multicultural. It's not just a thing for the poor, or curriculum for lower-performing students."
Funding for the Business page is provided in part by the Ford Foundation, which helps underwrite coverage of the changing definition of public schooling.
Vol. 20, Issue 5, Page 8Published in Print: October 4, 2000, as Schools Urged To Teach Value of Money