Students Need Training in Dollars and Sense
It’s basic economics: The supply of students who know much about money is woefully scarce, driving a demand for schools to do more, and fast.
Alan Greenspan, who can make markets move in a few words, is campaigning for students to improve their fundamental money skills. Trouble is, many students have no idea who the Federal Reserve chairman is or what he does.
The list goes on: saving, investing, borrowing, prioritizing, managing debt, scrutinizing contracts. Before students leave high school, they must be ready to make sense of dollars in many ways, but such economic training is uncommon.
Only four states -- Idaho, Illinois, Kentucky and New York -- require students to take a course covering personal finance, according to a 2003 survey by the nonprofit National Council on Economic Education. Fourteen require a course in economics.
The upshot? In the short term, students fail to put away savings, rack up debt, sign service contracts they don’t understand. Over time, the problem gets deeper: bankruptcies, home foreclosures, financial stress.
“We haven’t taught them how to be good consumers,” said Jan McCarthy, who includes money lessons in her government classes in Irmo, S.C. “We haven’t taught them to be critical of what they see, and we haven’t taught them delayed gratification. It’s all instant gratification. That’s what TV ads tell them.”
Teachers at the National Education Assn. annual meeting recently spoke about students’ financial literacy woes.
High school seniors last year flunked a survey of basic financial knowledge. For example, 78% thought that a U.S. savings bond or a savings account would offer the highest growth over 18 years of investing for a child’s education; less than two in 10 gave the correct answer: stocks.
“I don’t think there’s educational disagreement about this problem,” said Dean Breuer, a school technology coordinator in Richfield, Minn. “The solution is to teach it. But when you’ve got a lack of resources, when you have more requirements from everything else, how do you fit it in?”
Indeed, teachers say they’re up against their own supply-and-demand dilemma.
Cuts have forced districts to shift money and teachers into classes at the heart of federal reforms, such as reading and math. That highlights another problem, they say: -- economic training is seen as an extra.
“The trick is to get it into the curriculum in other areas, such as social studies, math, geography, history. We think you can’t talk about the Boston Tea Party unless you make some reference to taxation,” said Robert Duvall, president of the National Council on Economic Education, which trains teachers, provides curriculum for schools and advocates economic literacy in every grade. Even kindergartners, Duvall said, can learn lessons such as borrowing lunch money and paying it back.
Pablo Martinez, who teaches high school government and economics in Roswell, N.M., said such training must start by sixth grade. “My students have two strikes against them already,” he said. “If they go into the world and they’ve got these problems spending their money, they’re doomed.”
Educators say a lot of adults don’t even know what they don’t know about money. In a survey this year by the Foundation for Teaching Economics and the Gillette Co., 91% of adults said they apply basic economic concepts each day, but only 25% could answer questions about those concepts.
State leaders can help by requiring personal finance and economics in school curriculum, teachers said. They added that state standards must address real-life lessons, not just theory.
“There is always a cost to adding something to the curriculum ... ,” said Joanne Dempsey, president of the National Assn. of Economic Educators. “But the costs of not teaching our young people to function effectively in our economy are much higher.”
