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Financial literacy in high school

Discussion in 'Off The Beaten Track' started by KCC, Feb 1, 2011.

  1. KCC

    KCC Well-Known Member

    I went to the local high school principal and guidance counselor to see how I might help out as a volunteer, and they asked me to develop a seminar on financial literacy for grades 9-12 (slightly different seminar per grade). Whenever I ask kids who teaches them about money, I usually get a blank stare, and when I ask what they have been taught, the usual answer is "it does not grow on trees".

    I am updating my working outline and am interested in your ideas on "things you wish you knew about money when you were in high school". What, if anything, would have made an impact on or difference to you at that age?
  2. Twilight1

    Twilight1 Well-Known Member

    The concept of saving. I wish I was taught how to do that in highschool, heck I am still learning how to do it and I am in my 30's!! :lol:
  3. BittyBug

    BittyBug Dispirited

    I'm so glad to read this, as I've often been completely :confused: that a country driven by capitalism doesn't have basic financial issues as part of a core high school curriculum.

    Expanding on Twilight's comment about savings, I'd include:

    - how to balance a checking / debit account (how many kids end up over drawing their accounts? :wall: )

    - the true cost of debt - how something with a $20 purchase price can end up costing $40 or $60 with interest costs

    - how to save, using examples of tangible purchases like a new pair of sneakers, a new cell phone, etc., to show how they could save up for these purchases by putting $x a way each week or month

    - the impact of saving regularly, even if it's just a little bit of money at a time (maybe use the example of that lady who recently died a millionaire, yet she had only ever worked as a washer woman)
  4. Artemis@BC

    Artemis@BC Well-Known Member

    Teaching teens about financial management is an uphill battle because it goes agains the basic tenets of adolescents: everything is now and nothing is later; all is short-term and long-term consequences are irrelevant.

    However, if you're willing to take on that challenge ... here's what's in the grade 10 curriculum in BC:

    demonstrate financial literacy related to
    − budgeting skills (differentiating between needs and wants, setting priorities, determining anticipated income, identifying fixed and variable expenses, keeping accurate records, making provisions for saving, planning for unexpected events)
    − planning for transition from secondary school; financial products and
    services related to planning for transition from secondary school
    (e.g., bank accounts, investments, student loans, RESPs)
    − short-term and long-term implications of using credit and
    assuming personal debt, including positive and negative effects
    on credit rating
    − knowledge of legal requirements for reporting personal income
    − goal-setting and problem-solving skills
  5. made_in_canada

    made_in_canada INTJ

    Not me personally but many of my 20-something friends have zero understanding of how credit cards and loans work and consequently have got themselves into financial trouble.
  6. Grannyfan

    Grannyfan Active Member

    Budgeting, saving and wise use of credit
  7. attyfan

    attyfan Well-Known Member

    Cost of debt, including credit (teach them to consider fees and interest). Also, some basic facts about investments (differences between stocks and bonds, differences in types of mutual funds, etc.)
  8. UMBS Go Blue


    Maybe you could reach out to area chapters or the national HQs of Junior Achievement to access ready-made materials and curricula. :) :respec:
  9. Aceon6

    Aceon6 Hit ball, find ball, hit it again.

    What things REALLY cost... cell phone contract, car, your own place.

    This was a while back, before the unemployment crisis, but I did an exercise with some kids asking them to calculate the take home pay for a minimum wage job vs. the take home pay for the typical job that required 2 years of college.

    We then figured out how long it would take to save for certain things, to qualify for a cell phone, to qualify for a car loan. We figured out what the minimum wage person could afford vs. our hypothetical associates degree grad.

    Some of the kids had no exposure to costs, and were shocked at how much their parents paid for their cell phones, car insurance and the like. Others had part time jobs that went towards their family budgets and were all too familiar with the financial trade offs they had to make. The less well off kids ended up helping the others with some of the financial realities of life.

    It was fun, and I think most of them learned at least a little. One kid was really in to it. His goal was a house in one of the Boston suburbs. I showed him how to figure out the mortgage, insurance, taxes and how the amount of the down payment influenced the long term cost of the house. IIRC, he calculated that he needed to make $60k, marry someone who made $40k, and sock money away for far longer than he thought.
  10. susan6

    susan6 Well-Known Member

    Teach them that credit cards are not free money. They're just convenient....they are to be used so you don't have to carry around a big wad of cash. If you don't have enough money in your bank account to pay for what you just used your credit card for, don't buy it. You don't NEED the latest electronic gadget or Fall 2011 fashion just because your friends have it. Racking up credit card debt and interest to buy a closet full of over-priced clothes is ludicrous.

    (My roommate in college had racked up $20,000 in credit card debt on clothes. Add that to your college loans and enjoy being in debt for the next 30 years.)
  11. purple skates

    purple skates Shadow Dancing

    The importance of a credit score and how it relates to interest rates. Also how you can maintain/improve (and ruin) your credit rating.
  12. Jenny

    Jenny From the Bloc

    There was an interesting thread a few months bad about getting rid of debt: http://www.fsuniverse.net/forum/showthread.php?t=75113

    I'll copy a post I made there here:

    Thought this worth sharing - for the first time this month, one of my credit card statements came with this notation:

    This is on a balance of just $1900.00. Further, if minimum payments stayed the same, the total paid over that time period would be $15,390.00.

    If that isn't motivation to make clearing credit card debt and paying the balance every month a priority, I don't know what is.

    I always knew interest = evil, but when I saw that, I :eek::eek::eek:
  13. Prancer

    Prancer Slave to none, master to all Staff Member

    Interesting. I took Personal Finance when I was in high school and had assumed that it was available everywhere. I was surprised to find out that it wasn't. It is available in our school district, however, and my son took it last year.

    In the first half of class, they covered:

    Basic banking--savings, checking, fees, IRAs, other accounts
    Personal taxes
    Job benefits
    Insurance--life and health
    Credit--credit cards, bank loans, interest, etc.
    Investment--the stock market (very briefly)
    Budgeting--they had to do the same thing we did in school, which was create a budget based on having a minimum wage job and trying to live on our own. They had to find apartments and go shopping and things like that.

    For the second half of class, they used a customized version of the the SIMS 3000 to apply what they had learned; they had to work, go to school, pay their bills, etc. Every now and then, the game would throw a random event, like a major car repair or (in my son's case) a burglary (he chose to save money by living in a bad neighborhood) and they would have to deal with it. Nearly everyone in the class died the first week :lol:. Death or bankruptcy equaled an automatic F.

    My son learned a lot, just in time to get his first job :).
  14. Veronika

    Veronika gold dust woman

    My high school had a required class called Consumer Education--it was mandatory for all seniors. It was only a semester, but they taught us the basics: balancing a checkbook, calcluating APR for credit cards, contacting the FTC, etc.
  15. KCC

    KCC Well-Known Member

    Thanks for the ideas and experiences -- keep them coming! I'll definitely look at the Jr. Achievement info and review a few other sources, and add some info on managing bank accounts. I've done the "survive on minimum wage" before, but may not have time to do that in my seminar series. Maybe the teachers will follow up with that exercise. I might also sprinkle in a few of your anonymous quotes.
  16. Twilight1

    Twilight1 Well-Known Member

    Prancer that sounds like it is a fun class.. I really wish we had that at my school!!!
  17. Aussie Willy

    Aussie Willy Hates both vegemite and peanut butter


    Showing them some programs like Excel and how they can be used to help with listing expenses by creating a basic spreadsheet.

    Also doing calculations on Excel spreadsheets that they can work out things like interest if they borrow money. I find that most useful myself. But it might teach them about the cost of credit and is quite practical.

    Well done on offering to volunteer and good luck with it. Please let us know how it goes.
  18. barbk

    barbk Well-Known Member

    Charles Schwab has a pretty cool program -- if you have an office nearby you might check and see if you can use some of their material.

    Our local credit union also has a nice set of materials that seemed pretty straightforward.

    But my biggest advocacy would be helping them learn about paying for college, the FAFSA, and the difference between loans and grants. I'm horrified at the number of kids who think that they're going to finance college with huge loans.
  19. Aceon6

    Aceon6 Hit ball, find ball, hit it again.

    Good idea. One look at a typical repayment schedule might get some of them thinking.
  20. KatieC

    KatieC So peaceful

    Just a thought, because I work with seniors on a government supplement. Figure out how much seniors can get from the government currently, compared to costs - rent, food, medicine, etc. Then add a emergency item, like needing a new set of dentures, or a wheelchair or something. Here we have two gov't pensions - one you contribute to, one you don't. The rest is up to you. How much fun is life when you can't afford to buy oranges out of season, or ice cream once in awhile?
  21. JumpinBug

    JumpinBug New Member

    Do you know anything more about the program? I tried a quick google search, but didn't come up with the right thing. It'd be fantastic if it was widely available... Thanks!
  22. stanhope

    stanhope Active Member

    You have no idea how badly I wish a class like this would have been taught in my high school.

    All the things people mentioned already have been great. I would say an emphasis on student loans would be very helpful at their age. Teach them the difference between grants, scholarships, subsidized and unsubsidized Stafford loans, and direct loans. Tell them what current interest rates are so as to give them a picture of what loans are really going to cost them. Show them how much money they will have to make to afford their 10 or 15 year payment schedule.
  23. Anita18

    Anita18 Well-Known Member

    I think those are great basic things to go over for the younger group.

    The IRAs and investing stuff would probably be way early, but then again I was in a community where most people delayed getting into the real world until 22 because of college that was mostly paid for by their parents. :lol: So that list would probably be a great starter for people planning to work right out of high school.
  24. CynicElle

    CynicElle Well-Known Member

    That's what I'd have liked to know more about. I knew that running up a big card balance was bad but didn't know just *how* bad it would be in terms of galloping interest and in damage to my longterm credit rating. Talk about learning the hard way.
  25. vesperholly

    vesperholly Well-Known Member


    Another thing that I haven't seen brought up is renting your first apartment. How to find an apartment, splitting bills with a roommate, lease agreements, etc. Mortgage stuff is great, but the vast majority of people I know rent before they buy.
    BittyBug and (deleted member) like this.
  26. BittyBug

    BittyBug Dispirited

    Not to mention that security deposit that's usually required up front!
  27. SBulgatz

    SBulgatz New Member

    Hi 'KCC,' my name is Sarah Bulgatz and I work for Charles Schwab. ‘Barbk’ is correct (thanks, Barbk) -- we have an educational website, www.SchwabMoneyWise.com that’s focused on helping people learn and teach the nuts and bolts of personal finance. Check out the Teachers & Volunteers tab for resources on teaching the ABCs of money management, as well as a workshop for middle and high schoolers. You might also be interested in the pledge campaign we're sponsoring with Boys & Girls Clubs of America called Make Change Count, which encourages teens to commit to four simple steps to get on the path to a great financial future. Hope this is helpful!
  28. LilJen

    LilJen Reaching out with my hand sensitively

    Great stuff, everyone. I got SO much out of one of the 'gut' courses I took in HS--home ec--because we had fake 'checking accounts' and had to budget based on the recipes we were assigned. Also the idea of debt growing exponentially via credit card interest rates, and the "save a little each week/month toward a big purchase" idea.
  29. KCC

    KCC Well-Known Member

    Thanks so much!! I will check your site against my outline and incorporate things that I may have left out. I appreciate your input!
  30. barbk

    barbk Well-Known Member

    KCC --
    Since you're working on a seminar for each grade level, I'd like to advocate making college finance and expenses the key priority for juniors, since it ought to affect how they think about the college application process, and what it means to have a "financial safety school" -- one that you and your family are SURE you can afford AND that is a school that your are willing to attend. Even though I live in an affluent area, every year we see kids and parents who are in shock come spring of senior year when they finally figure out that the private college with the $52K cost of attendance that gave them $18K annual scholarships, or the out-of-state public university with the $36K cost of attendance simply are unaffordable for their families. Usually they didn't understand very basic things about financial aid: that neither the feds nor private colleges considers any debt you may have (including mortgage or car loans), adds back to your available income any contributions you made during the year to 401K or IRA plans, and that a step-parent's income is included as an income source for college if the step-parent is living in the household with the student. At a number of private colleges, students are shocked to learn that in the case of divorced parents, many schools expect contributions from both sets of parents, assess a percentage of home equity, and treat any property other than the family home as an asset that is no different than money in the bank. And that's before we even talk about student loans, and the life impact of starting out with huge debts from college. I've seen way too many "Had I but known" moments, and it is really, really sad. All too often kids are encouraged to apply to whatever schools they want, because neither the kid nor the parents understand the realities of college costs and financial aid.

    There are some great websites out there on the student loan crisis, and I think that high school kids need to be aware of the potential impacts on their lives:

    "The 33-year-old woman last month endured a painful breakup with her boyfriend of seven years. "Much of it was to do to the fact that I have over $150,000 in student loan debt and he did not want to be responsible, or help me, pay it back," she told WalletPop. "He wanted other things, such as a house and kids, and that is simply not an option for me as I have this mountain of debt to pay back.""