Personal
Finance Education
Introduction
Currently,
the Missouri Board of Education requires a half-credit course in
personal finance for all Missouri students, effective for the
graduating class of 2010. However, some legislators say that a
half-credit isn't enough and instead propose a series of four year-long courses in
personal finance education as a necessary means to adequately prepare teenagers for a bright financial future.
The current picture is bleak. According to the National Council on
Economic Education, 66% of high school students scored an "F" on a test
covering basic money skills. Only 3% scored an "A."
Few deny that
additional education and financial literacy programs are needed for
today's teenagers, but the ideal length and extent of those programs
and courses are the subject of debate sparked by the proposed legislation.
Bill
Information and Links
SB 790
Sponsored by Sen. Dan Clemens
This bill would require every public high school student in Missouri to
satisfactorily complete four year-long courses in personal finance
education in order to graduate. The courses would begin with the
2007-2008 school year and would be required of any student receiving a
diploma on or after January 1, 2011.
Subject matter in the courses would include banking, checking and
savings accounts, credit cards, interest rates, pensions and retirement
savings, social security, property and life insurance and the stock
market.
The bill was introduced to the Senate in January and referred to the
Senate Education Committee. A public hearing is scheduled for March 28.
Public Opinion
Several companies, financial institutions and organizations support
financial literacy in general, in the form of formal high school and
college courses and/or in other means throughout the community.
However, the main issue at hand is how lengthy, extensive and rigorous
these personal finance courses should be. Some students are likely to
see four years as too long and boring, while others--particularly
adults--see them as necessary to fully understanding the complex system
of today's financial world.
Another potential concern would be the courses' impact on other high
school studies, especially considering the implications of No Child Left Behind. Four year-long courses in high school might permit some
students from taking classes in more traditional academic subjects.
What's
Happening in Other States
Requirements in
personal finance education vary significantly from state to state. Some
have no formal requirements, others specify that the subject must be
covered in the curriculum of another subject area (such as social
studies), while some have course requirements of various lengths
and credits.
An overview
of proposed legislation in other states can be found in the National
Conference of State Legislature's section on financial literacy. Jump$tart coalition also provides a good summary of statutes and pending legislation relating to this topic across the nation.
Helpful Links
News stories and newsletter articles on
the proposed legislation
Department of Elementary and Secondary Education (12-05)
Columbia Daily Tribune (4-20-05)
Other
Links
Missouri Council on Economic Education
This site offers information on economic education in Missouri. A position statement on the importance of financial literacy is also offered.
National Council on Economic Education
Provides resources and educational materials for personal finance education.
The Jump$tart Coalition for Personal Financial Literacy
A variety of resources related to personal finance education and financial literacy. The site also features a good overview of statutes and pending legislation concerning financial literacy in the United States.
Federal Citizen Information Center's Money IQ Quiz
An interesting tool to assess knowledge in personal finance.
Mymoney.gov
The federal government's website with tools to assist in financial literacy.
Financial Literacy 2010
An iniative aimed at increasing the knowledge of high school students concerning personal finance and investment.
Young Americans Center for Financial Education
A Colorado-based organization focused on educating youth about economics and personal finance.
National Center on Educational Outcomes: State Graduation Requirements
Current high school graduation requirements by state.
Reporting
Tips
Why this story is worth
reporting
Nearly all teenagers are interested
in matters of money in some regard. Some have checking accounts,
savings accounts and possibly even credit cards. Upon the completion of
their high school years, those teenagers will be thrust into an even
more complex system of personal budgeting, bill-paying, managing debt
and other financial situations.
Teenagers see this increased
responsibility as an exciting challenge, but are they adequately
prepared for it? The issue is certainly worthy of debate. If nothing
more, students have the right to be aware of such a lenghty and
extensive course requirement as that proposed in this legislation.
Interesting facts
April is Youth Financial Literacy Month.
The Young Americans Center for Financial Education
has compiled a variety of statistics on financial literacy from various
sources. See the website for more facts and citations for each
one. Some interesting findings include:
- In 2002, the number of people filing for bankruptcy was greater than the number of people who graduated from college.
- Those in the 18-24 age bracket spend nearly 30% of their monthly income on debt repayment, three times the recommended 10%.
- More than 9 in 10 adults and students believe that all Americans
should have a good understanding of economics. However, only half of
high school students say that they have had economic instruction in
school.
- In a 2004 assessment of financial literacy administered by the
Jump$tart coaliton, 65.5% of students received failing scores.
- Nearly a third of all high school seniors use a credit card.
- Fewer than 30% of high school students are offered as much as a week's worth of personal finance education at school.
Who
to Interview
Talk to students and find out their
personal financial situation. How many of them have checking accounts?
Savings accounts? Credit cards? Who manages these accounts? Do
teenagers feel that they have a grasp on financial issues or are they
eager to learn more?
Interview your high school's
economics teachers to get a feel for how much they think their students
know about personal finance.
Talk to high school administrators
to learn the outcomes that would result if the course requirement were
to pass. Would the school have to find additional money to fund the
courses? Hire additional staff? What do administrators think about the
proposed requirements.
Interview recent graduates of your
high school who are now in college or working. Make contact with a
current student's older brother or sister for example. Find out how
they are dealing with increased financial responsibility. Did they feel
adequately prepared? What do they wish they had known?
Find out what financial literacy
programs are offered in your community. Your teachers, administrators
or representatives from local financial institutions might be able to
help you with this.
Sidebar/Infographic/Photo
Ideas
Quiz your teachers, administrators and/or parents about
their own knowledge of personal finance. The findings might surprise
you. It would probably be best to keep responses confidential so as not
to embarrass anyone.
Conduct an informal awareness and/or attitude poll on the topic and publish the results as a graph.
Publish a sidebar outlining your school's current requirements or policies concerning personal finance education.
MoStuGov