High school financial literacy?
I thought this might make a fun follow-up on my post on 8th grade algebra. Over at jabberwocking.com, Kevin Drum discusses a proposal to make a semester of financial literacy a high school graduation requirement. He feels that this would fill a much-needed gap:
“There are no long-term tests of financial literacy that I can locate, and overall financial indicators aren’t flashing any red lights. Over the past few decades, both mortgage delinquency and credit card delinquency are down. Retirement accounts are up. Installment loan balances are down. Foreclosures and bankruptcies are down. Savings are up. Overdrafts are down.”
Drum addresses the trend lines. That tells you where we are relative to where we were, but are the current levels of these metrics acceptable? What are our goals for each of these metrics? And what about student loans, which didn’t make his list?
Discuss.
Financial literacy instruction in high school
“There are no long-term tests of financial literacy that I can locate, and overall financial indicators aren’t flashing any red lights. Over the past few decades, both mortgage delinquency and credit card delinquency are down. Retirement accounts are up. Installment loan balances are down. Foreclosures and bankruptcies are down. Savings are up. Overdrafts are down.”
Drum addresses the trend lines. That tells you where we are relative to where we were, but are the current levels of these metrics acceptable? What are our goals for each of these metrics? And what about student loans, which didn’t make his list?
Discuss.
Financial literacy instruction in high school
Such a course is offered at our local high school.
I remember such a course being suggested at a school board meeting over 20 years ago. They have probably been offering it for lo these many years. These are links on their web page (disabled here) for course materials. Kids (not just those in wealthy suburbans) need to know this stuff to function in the real world.
Financial Literacy
Financial Literacy Course Expectations
Financial Aid & College Planning Resources
Unit 1 Money Management worksheets
Unit 2 Borrowing worksheets
Unit 3 Earnings worksheets
Unit 4 Investing worksheets
Unit 5 Financial Services worksheets
Unit 6 Insurance worksheets
@Fred,
Is it a graduation requirement? Because that’s the topic of my post.
I have no idea. But in order for it to be a requirement, at first such a course has to be offered. Prior to twenty years ago, it was not. As I recall, such requirements are state mandated, and I doubt that is the case here.
New Jersey has a required semester of financial literacy for graduation. 9.1 Personal Financial Literacy (nj.gov)
The quote leaves me wondering what young Mr Drum is looking for. Things appear to be pretty well, money appears to be being managed, generally the population appears financially literate. I’m not sure what he’s getting at
I seem to recall a math class in jr high school …
@Ten,
Feel free to click the link I provided to read the rest of the Drum post and the comment thread.
I went to grade school in the 50’s. When we got to percentages in math, they started having some of the teaching examples relate to banking. We learned about compounding, and the big bank in the state had a student saver program. We got accounts and envelopes that they picked up for deposit every week, and a statement about once a month showing what we had saved and how much our earnings were. We were talking deposits of maybe a quarter a week. It had to be an expense, but those accounts were there unless we closed them out. Most of us did at the end of the term. We also had someone talk about checking accounts, and went through making entries on the register and balancing to the bank statement. It was practical math rather than financial literacy. I think they did show something on credit, or loans, and how amortization worked. Mathematically, and even in the 4th grade the difference between the price of your home and how much you paid over 30 years left an impression, and that was with rates in the 4’s and 5’s. But it was still just a few lessons in math class.
Jane:
It appears like Joel caught it for you. Thanks for telling us.
From the OP:
He feels that this would fill a much-needed gap
Hardly. Or maybe this is “irony”. The conclusion of Drum’s post:
Maybe I’m missing something, but I just don’t see any special evidence that financial literacy is in some sort of crisis state. Nor am I convinced that a financial literacy course would actually change the habits of ordinary human beings, who mostly do dumb stuff because they feel like it, not because they’re unaware it’s dumb. So why is this necessary?
Show me the evidence or gtfo.
@Marcel,
Re-read my comment.
Drum doesn’t see a gap that this course requirement fills, ergo it fills a much-needed gap.
Apparently emojis (images) can’t be copied and pasted here.
In the previous reply, I tried to post an “Oops” emoji.
Double oops!
Marcel:
The system allows JPGs when the proper internet addy is used on the img tab. I put images out here all the time. 🙂 Colon and one half of a parenthesis works for a smile.
In my previous reply, I attempted to copy and paste an “oops” emoticon
Double oops
😎 Left-click and select ’emoji’ from the popup menu
Anyway, judging by the other comments here, I think most of your readers mis-read this in the same way.
The New Mexico group “Think New Mexico” has been lobbying for a financial literacy graduation requirement for several years. Here’s a write up from their website:
New Mexico currently ranks 47th for overall financial literacy according to the online personal finance website WalletHub. Personal finance courses teach students important life skills like how to make a budget, open an account at a bank or credit union, save and invest for their futures, apply for financial aid for higher education, and avoid high-cost debt.
Personal finance is currently offered as an elective in New Mexico, yet only about 11% of students actually take the course. A recent poll conducted by the National Endowment for Financial Education found that 88% of U.S. adults think their state should require a personal finance course for high school graduation. Furthermore, 80% of U.S. adults say they wish they had been required to complete a course focused on personal finance education during high school.
Thirty states have made personal finance a graduation requirement, with 22 states adding it in the last decade. South Carolina recently became the 15th state to guarantee a standalone personal finance course to all high school students prior to graduation. Fifteen other states require personal finance to be taught within another course, such as economics.
Think New Mexico recommends making a course in financial literacy or personal finance a high school graduation requirement and adding it to the state’s education standards.
Financial Literacy | Think New Mexico
Bankruptcy Filings Rise 16.8 Percent | United States Courts (uscourts.gov)
Joel:
Proficiency in math seems to be a question. By that I mean minuses and pluses and balances. Pretty much, I know what our monthly, quarterly, and yearly expenses are and what our income is. If you get paid once a month, this is something one needs to know looking to the future.
If you are unaware, how do you decide what you can buy or pass-on? Why not just basic accounting?
@Bill H,
From what I gather, a financial literacy course would *include* basic accounting. The names of things don’t matter, it’s the content. Accounting is just math, but we don’t call accountants “mathematicians.”
It’s not proficiency at math alone, although if it were, the answer is to tighten up math course requirements. I had a high school kid who worked in my lab (and later went on to get both an MD and PhD) who was taking calculus and who couldn’t do simple dilution calculations without a calculator (if you have a 10x stock solution, how much would you use to make 400 ml at 1x concentration?). They understand the arithmetic, they’re just too lazy to reason with it.
joel
yes to all that. mostly.
but tighten up requirements is the wrong approach. teachers need to lead, not require.
perhaps they fail to lead because they learn to despair after years of trying their hearts out.
or as they used to say at a place i worked for awhile:
“The beatings will continue until morale improves.”
Joel:
I am referring to real life situations. One may be a whiz at calculus and cannot manage a checking account and the ins and outs of funds plus the needs of accuracy. Checking accounts are obsolete practices these days. I can understand why some may not need one with such things as debit and credit cards being available. But then, many get in trouble due to an inability of managing their funds.
Just my $.02 Joel.
@Bill H,
We agree.
I kind of new we would mostly.
my fear is that “financial literacy” would be used to teach a “Republican” understanding of “economics.”
Actually, I think this could be a useful course. How many young people get their first job and are surprised by things like FICA and Medicare deductions? How many of them understand the deal on credit cards? How many fail to understand basic contracts like leases and car loans and purchases? It isn’t just poor kids either. Parents don’t want to burden their kids with this kind of adult stuff, so the kids come out ignorant.
Their used to be a course called civics that touched on some of this, and home economics courses sometimes had actual consumer economics lessons. I don’t think anything like those courses is still offered, but it’s easy to imagine an updated version being very useful.
@Kaleberg,
I agree totally. There’s no question in my mind about the value of such courses. The topic of the thread is whether they should be a *graduation requirement.*
They don’t want us to get too educated because that might make us uppity.
still might be hard to take the politics out of “financial literacy.”
but i don’t think you can teach anything t someone who has a calculator and a cell phone’