Go to the mobile version of this Web site.

Login | Contact Us | Site Map | Paid archives | Electronic edition | Subscription Questions | Extras

SPEAKOUT: Let's help our kids learn financial ropes

By Amy J. Schmitz

Published April 2, 2008 at 12:05 a.m.

Text size  

More Speakout

More stories »

April is Financial Literacy Month. President Bush is currently touting his establishment of a President's Advisory Council on Financial Literacy. Meanwhile, Colorado Gov. Bill Ritter also has noted the importance of educating our children to live and work in today's market, proposing his Colorado Achievement Plan for Kids.

But despite such initiatives, Colorado's financial literacy bill seems to have fallen off the radar screen. Earlier this year, a bipartisan group of legislators proposed House Bill 1168 requiring addition of financial literacy content to K-12 math classes in Colorado's schools. News stories lauded the bill, and everyone from bankers to students testified in support of it at committee hearings. They all stressed the necessity for financial education in the schools to equip Colorado's youth with the tools for survival in today's economy. The bill nonetheless lingers in the Appropriations Committee with little sign of life.

A majority of states have adopted mandatory financial literacy standards or programs in their schools. These programs benefit not only the students, but also parents and grandparents of students who learn financial and consumer skills from their children.

Parents have the primary responsibility for teaching their children about responsible money management, but studies show that many parents are failing to give their children essential financial tools - often because parents lack those tools themselves, or are deep in their own financial crises.

Furthermore, the 2006 National Jump$tart Coalition study indicated that students from low-income and less educated families are less prepared than their more affluent classmates to wisely manage what money they have. The study also indicated that white students were more financially prepared than their African-American classmates.

Financial illiteracy nonetheless pervades all social and economic strata, and students from all walks of life are graduating without basic financial understanding. In answering the Jump$tart survey, for example, 77.4 percent of all the responding high school seniors did not realize that savings account interest may be taxable. In addition, almost half incorrectly identified when it would be "financially beneficial" to borrow money. Instead of choosing the option of borrowing to buy a car to get a much better paying job, 42.3 percent of the respondents chose to borrow the money to buy clothes on sale, to take a vacation or to put it in a savings account earning a lower interest rate.

Of course, teaching financial literacy in our schools will not magically transform consumers' borrowing and spending behavior. We often fail to implement what we learn, and navigating the complexities of being a consumer in the Internet age challenges even the savviest among us. Today's consumers not only must survive in a jungle full of identity theft, predatory lending, Internet fraud and retail scams, but also must worry about losing legal rights just by clicking "I accept" to Internet terms or keeping a product packaged in shrink-wrap laden with confusing boilerplate.

There are some emerging financial management and consumer education programs. For example, the National Endowment for Financial Education and the Colorado Housing and Finance Authority offer financial literacy resources and programs. My University of Colorado Law School Consumer Empowerment service-learning class also is working with the Boulder Community Housing Authority to teach a consumer skills seminar.

However, we need to do more as a state. If passed, HB 1168 would require Colorado to invest state economic and human resources in establishing usable model standards and materials for K-12 math classes. To be sure, the bill's $550,000 price tag appears hefty, but policy-makers may be able to conserve costs by borrowing from other states' programs and building on model standards that Jump$tart, the National Council on Economic Education and others already have developed. Moreover, investing in financial literacy education will pay huge dividends for our state's financial future. Indeed, we simply cannot afford to send our youth into today's economic jungle without adequate educational protection.

Amy J. Schmitz is an associate professor at the University of Colorado School of Law.

Comments

  • April 2, 2008

    6:57 a.m.

    Suggest removal

    VVVV writes:

    A very noble idea. Of course noble ideas go nowhere when there is more important stuff for the legislators to tackle, like traffic on I-70 or stealing candy from babies. Building a better future doesn't win votes, pandering to deep pockets does. And the deep pockets don't want to lose their uneducated cheap labor pool. That would mean they would be less rich. Of course with CSAP and school closures to worry about, and everyone and their grandmother shouting for their kids to be educated by the schools in everything from sex to sensitivity, it's easy for a good idea to get lost in the fray. Of course it would be too much for parents to teach their kids anything these days, much less about sex or sensitivity. Their too busy getting busy with the next franchisee.

  • April 2, 2008

    2:16 p.m.

    Suggest removal

    rellimpank writes:

    ---somehow, back in the dark ages ('58 high school grad) most of us learned that we couldn't spend more than we made---no credit cards, had to learn to balance a checkbook when we got enough money to have an account, etc.,--

    --wonder where society went wrong?

  • April 2, 2008

    9:57 p.m.

    Suggest removal

    Rangerjoe1 writes:

    Teach Capitalism, "Supply and Demand" Lets say we have 50 million working class in American that earn a fair wage for their work, then you add, say 25 million illegal immigrants to that total that work for 60% lower wages, American workers will now make a lower wage. More supply means less demand. Also if at a fair wage American workers QUALIFY for a mortgage, with lower wages they will not be able to pay for the mortgage they would have qualified for.
    But what we should teach our children most is the new modern version of the "Golden Rule" DO UNTO OTHERS BEFORE THEY DO IT TO YOU"

  • April 3, 2008

    6:50 a.m.

    Suggest removal

    VVVV writes:

    If the American worker can't learn enough in their schooling to stay ahead of an illegal immigrant in the labor pool, then what difference would a little more education do? They aren't going to pay attention to that any more than they did the other classes they failed out of and ended up working in a meat packing plant. The spoiled American teenager who doesn't put any effort into getting a diploma, thinking that school is a waste of their time, deserves whatever cheap wages they are forced to take due to their apathy. There is no reason an able person who is raised in the American education system can't use that system to improve their standing over those that come across the border. Failing to do so is their own fault. The law of supply and demand also tells you that you can do something better than the competition to survive, so comparing an illegal immigrant who will desperately do anything against all odds to improve their situation against a fat lazy American who expects the government to hand them cash on a platter isn't fair. The immigrant should always win. Here's another rule you should learn - "THERE IS NO SUCH THING AS A FREE LUNCH."

  • April 3, 2008

    8:01 a.m.

    Suggest removal

    vudumom writes:

    The schools can't teach a decent math program,how are they supposed to teach children the basics of balancing a checkbook,living within their means and a debit card does not mean you get to keep swiping it without keeping track of what you have in your checking account? Not to mention credit cards and how to explain if they have a $1,000 debt on their credit card and pay the minimum it would take 15 -20 years to pay off the debt. Kids learn from their parents. It is my responsibility to teach my children how to be financially fit and to gaurd your credit with your life. That is the bottom line. We live in a society where your credit score determines what a finacial institution, a credit card issuer,insurance company,a bank ,a car loan processor,a home lender,if you want to rent a home or apartment and even some jobs, are affected by you credit score.One mark could cost you thousands of dollars. People don't understand that.
    The last thing I need is a school teaching my kid the easiest way to add or subtract is to round numbers. Try that with your checkbook.Here is a question on a math test my daughter recently had through , The Everyday Math series being taught in schools.
    Estimate the answer to 9x9= . She answered 81 because she knows multiplication.She is in 2nd grade. The answer was marked wrong. I asked the teacher why and she said the correct answer according to the book was 100. Do you really want the schools teaching you child how to do finances with this type of math being taught?
    By the way , Texas has banned The Everyday Math Series. New York and California as well as a number of other states are getting ready to ban it. They bought into it and watched the math scores plummet.

  • April 3, 2008

    8:30 a.m.

    Suggest removal

    Coco writes:

    Vudu - we've heard this story before. Look at the question the teacher asked. ESTIMATE. The object of the lesson was to learn to estimate, which will serve her well in many instances. She won't always have a clear cut, simple function. For example, she may need to estimate the total cost with tax she'll pay on an item that costs $173.42 - let's say she has 195$ in her wallet. Will she be able to pay for the item with cash? An ability to estimate will be very helpful.

  • April 3, 2008

    9:48 p.m.

    Suggest removal

    anderson writes:

    Sasquatch would presumably have us abolish schools since they're so obviously inept (and he isn't). Wait, no, then he'd have to find someone else to hate.

    I'm all for what the letter writer proposes. However, I think we're ignoring the gorilla in the room: the gazillion messages we get day in and day out telling us to buy, buy, and buy more. And the letters, and messages and encouragement we get to borrow and borrow more. And the credit card cos. whose practices tell us they would rape their grandmother for a buck. We can talk (and should) about being financially responsible. But the fact remains, we have these predatory loan sharks out there waiting for anyone's weak moment, and top that with a gazillion messages to buy and financial illiteracy and it's no surprise that we are at all time record debt.

    I read the other day that only 9% of people had a credit card in 1970, but now it's up to (don't quote me on this) 90%. Did financial literacy drop precipitously during that period? I don't think so.

    Do you think the financial cos. who are some of the largest contributers to political campaigns are going to get behind a financial literacy program?

    What message is our tax rebate to spur the economy sending us? Save? Or Spend?

  • April 4, 2008

    8:14 a.m.

    Suggest removal

    vudumom writes:

    Coco, if the question was an estimate question ,how did the writer's of the math book come up with 100 as the correct answer? Wouldn't 90 be a better estimate? My point is the math they teach in school is not math we use everyday. The Everyday Math series is a horrible way to teach math. When my husband first looked at the book and the series , his reaction was , " You got to be kidding me" . As we go on through the math series he has found many answers incorrect in the book. One teacher who hates the math series is an engineer and has told me there are numerous things wrong with this math series. The worst is the convoluted way they series teaches math. She has said it's the worst math books she has ever seen in her 15 years of teaching. The school system bought into the sham and now the kids are suffering by not learning everyday math but a math program that is frustrating and alot of the time incorrect. It makes children hate math.She has seen scores go down and many other states who invested millions in this program have too. At least they have the guts to trash it. Colorado will continue to use it and will continue to make children hate math early on in their school careers. Fortunately my husband can explain it to my daughter, ( he is the math wiz ). I'm glad because the teacher can't explain it correctly.