Are young people financially literate?

Wednesday, 06 April 2011 11:00

Are young people financially literate?

Written by Scott LaMar, Director of Radio Smart Talk

Radio Smart Talk for Thursday, April 7:

Starting this year, financial literacy is being included in Australia's national school curriculum. But here in the United States, what you learn about finance in school may depend on where you live, and what your school elects to teach.

The Commonwealth of Pennsylvania, for instance, has no statewide financial education course requirement, though personal finance may be taught in school as an elective, and there have been financial literacy standards required to be addressed within other classes since 2003 for grades 3, 6, 9 and 12. Neighboring states, however, do have required courses: Ohio's new curriculum, passed in 2007, will apply first to the class of 2012. And since 2009, New Jersey has required students take courses in financial, economic, business or entrepreneurial literacy.

If Pennsylvania is to remain economically competitive, should there be greater emphasis on teaching financial literacy in our schools? What do kids know and not know today about money? Are they more or less prepared to become financially responsible than past generations?

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# BethK 2011-04-06 11:27

Pennsylvania has standards for family and consumer science including age-appropriate financial literacy. PDE publishes standards (search for 'PA standard consumer science'). Maybe these aren't up to the 2008 national standards, but it isn't fair to say that Pennsylvania doesn't have any financial literacy requirement. And allowing school districts to incorporate this material across the curriculum lets students see how it is used.

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# Craig Cohen 2011-04-06 12:54

Beth - Thanks for your comment and clarification. This one's entirely on me! I wrote the description above, and I meant to say that there are no separate course requirements for financial literacy.

You're right, and the standards you reference have been in place since 2003, but as I understand it, don't specifically require a separate course; the standards can be incorporated into other coursework (as you say, "across the curriculum.")

The description above didn't make that entirely clear, and I've amended the language to note that. My apologies for any confusion. I'll try to make this distinction clear on the air Thursday.

Thanks again.

- Craig

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# Cheryl Stearn 2011-04-07 08:39

April 28, 2011 at 7 PM the Award Winning Documentary, "Inside Job" a film by Charles Fergason, will be shown at the Capitol Theater in Chambersburg. This free event is being shown specifically to educate the community about the financial crisis of 2008. A study guide developed by Professor Frank Partnoy, the George E. Barrett Professor of Law and Finance at the University of San Diego School of Law is available for educators to use in their classroom. It is found online at:
www.sonyclassics.com/insidejob/_pdf/InsideJob_StudyGuide.pdf

More information about this event is at RSVPA (April 28)

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# BethK 2011-04-07 08:52

I can't listen to the show in real time ... I don't think we need a separate course in high school. While these concepts are important, I'd rather the students be solid in math so that they can "do the math" required. There isn't enough content here to be covered in an entire separate financial eduction course. Incorporating the essentials into a consumer science course (as is done now at least by our school district) seems to be the right way to educate our students about these important topics.

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# Caleb 2011-04-07 09:20

I think it's important to not get ahead of ourselves with reference to teaching young people about financial responsibility. I might be a little old school about this, but I'm only 24 years old and I believe that some of the best teachings come from learning on your own. Thinking of past generations, I don't believe there was a lot of pressure on younger people to learn about such things as retirement plans. Given, that was a time when work was a way of life and there wasn't a sense of entitlement among young generations. That being said, I think the best way to teach children about financial responsibility is to simply not spoil them beyond what is reasonable, which is something that parents have turned away from. I'd say it definitely starts with the parents, but it's ultimately up to kids to be smart enough to understand the difference between what's important and what's not.

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# Lisa 2011-04-07 09:33

The most important thing is to teach your children the difference between wants and needs and to live within your means. Those 2 things will lead to financial success. Too many parents do not refuse anything to their children. There is nothing wrong with telling your children "we can't afford that" and then following through by NOT buying the item.

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# Lori 2011-04-07 09:35

We have tried to teach our kids some real-life lessons in financial planning as they choose colleges. Our son is in his first year at HACC and saving literally thousands of dollars for the same courses at 4-year institutions. Our daughter seems determined to go to a 4-year college in two years however we are still trying to talk her into attending HACC so she doesn't begin her adult life tens of thousands of dollars in debt. Both are on a college budget. Also, both kids see the bills they contribute to - cell phones, groceries, gas, car insurance, health insurance. If they "want" something extra, they save money to buy it knowing we can't give them the extra because the cell phone bill is due or the cable bill is due. They have learned to LOVE shopping at thrift stores where they can get a pair of brand name jeans for 4.00. You can't beat the thrift stores. It takes work and vigilence on our part to raise savvy consumers with fiscal intelligence.

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# Bonnie 2011-04-07 09:39

Financial literacy is an important component of educating students. The JA exercise of differentiating between wants and needs is an excellent example of how first graders can begin to think about spending money. Advertisers spend millions of dollars to reach young students in all types of media. Students need to be aware of this. A video HBO did some years ago called "Buy Me That, Too" shows young people the tricks of advertising and helps them make more informed decisions. We need to realize that children are seen as a huge market so it's not just about how to spend a small allowance, it's about forming habits for a lifetime.

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# Louise 2011-04-07 09:43

How are people supposed to save for their retirement when their entire paycheck goes towards paying food and housing.

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# Kevin 2011-04-07 09:46

With the education cuts coming in the state budget, many schools are laying off their family and consumer science teachers where financial literacy is being taught. They usually teach stuff like balancing check books, how to use banks, and budgeting.

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# BethK 2011-04-07 10:05

Living within your means is very important, but choosing an appropriate education after high school is also important. For some people, a trade school is a good idea. HACC is a great place for some students, and some will transfer to other schools. But I wouldn't limit my child to go to HACC based solely on its cost.

The quality of the classes and fellow students varies from school to school. The state system schools provide a solid four-year education at reasonable prices (at least now; not so sure if the governor gets his drastic cuts). Students away at college learn a lot about finances, time management, and life as well as what they learn in the classroom.

But is that the best use of their/your money? That's hard to say.

Disclaimer: I teach at a SSHE school. My child is going to a private 4-year college in fall. We planned financially for that because its the best choice for her.

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# Dale 2011-04-08 12:38

Guest, Mark Eisenberger (

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# Dale 2011-04-08 12:39

I don't know why my first attempt got cut off?
Guest, Mark Eisenberger (

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# Dale 2011-04-08 12:41

Mark Eisenberger remarked that the market is reliable, and that fraud is rare, implying that sound investing is relatively immune from its effects. I have no problem with today's discussion and agree that the young, and those of all ages, can benefit from lessons of fiscal responsibility, but the market remains a treacherous endeavor, and, unfortunately, it is the primary vehicle for savings, financial soundness, and advancement. The truth is that credit default swaps, or similar products, are still present, and regulation is intentionally lax under the current Congress in order to allow rash investments to spur the markets--hence its miraculous rebound. Another blow-up of the financial system looms large on the horizon, and, in that light, I find Eisenberger's remark to be imprudent. No matter how frugal or responsible, I think we can all agree that the effect of the previous financial debacle on the global economy has been devastating for all but the wealthiest.

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# BethK 2011-04-08 13:58

I've listened to the show. I continue to believe that Pennsylvania is right to spread the requirement over the curriculum and ages. Personal finance is covered in high school, but even adding a whole course won't solve the problem.

Becoming financially literate is a continuing process, and families must be involved so that their values and priorities are considered. For example, some of us buy new cars every few years while others drive older cars for much longer. As noted on the show, some have big houses, others live smaller, and others trade work for lodging. And some are homeless or living paycheck to paycheck.

We need to consider what are wants and what are needs. But we differ in what we feel we need.

One thing that I feel has changed is how people want everything now rather than using delayed gratification. I'm afraid that our kids are not going to be able to live as well as we do.

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