Money talks, but kids don't listen
Schools to push financial literacy
STONEHAM -- Massachusetts has spent years and millions of dollars trying to boost student scores on standardized math tests. Now it's taking a crack at helping teens balance their checkbooks.
State officials yesterday unveiled a voluntary financial literacy initiative aimed at teaching high school juniors and seniors the basics of budgeting, saving, credit cards, and insurance.
Beth Lindstrom, the state's consumer affairs director, said a pilot program at Stoneham High School was just completed. She said she expects 136 high schools to be teaching the so-called HiFi course to 10,000 students next fall and hopes it will become a mandatory part of the state curriculum.
David Driscoll, Massachusetts' education commissioner, said the training was badly needed. ''As great as we've done in the academic area, we have not done so well in the practical area, the real-life area," he said.
Lewis Mandell, a professor of finance and managerial economics at the State University of New York at Buffalo, said the nation's schools are pumping money into math, English, and science and spending little, if anything, on practical life skills, including the basics of finance.
''We work very hard at educating our kids to make money," Mandell said. ''We spend no resources on the other half of the equation: using those resources wisely."
The lack of financial knowledge among high school students is reflected in scores on nationwide tests. Mandell, who administers tests for the JumpStart Coalition in Washington, said the average score of the 4,000 public high school seniors was 57.3 percent in 1997, 51.9 percent in 2000, 50.2 percent in 2002, and 52.3 percent last year.
''Our kids are really pretty ignorant on these matters and more ignorant than they were years ago," he said.
The ignorance is taking its toll as high school students move on to college and into jobs. State officials cited research indicating young adults spend 30 cents of every dollar they earn servicing debt, while their annual bankruptcy filings have increased 51 percent over the last decade.
Deb Deacon, the marketing teacher at Stoneham High who taught the pilot program, said all but one of her 125 students had a wireless phone, and many had jobs, cars, and access to credit cards. Yet she said ''they didn't have a clue" about how much money it takes to buy a home or the intricacies of credit card debt.
Many of Deacon's personal finance lessons were augmented with examples drawn from her own life. She said she graduated from college at age 21 with $7,000 in credit card debt. ''I wish I had a course like this when I was in high school," she said.
The Massachusetts program is a low-budget experiment. It uses a 120-page student handbook donated by the National Endowment for Financial Education and can be taught as part of an existing course or on its own in three to four weeks. The state consumer affairs office is funding teacher training courses this month and counting on companies to finance them in the future.
Students at Stoneham High who completed the program said they learned a lot. Alex Vendetti, 17, said the segment on credit cards was the most enlightening for her. Her workbook said someone making the monthly minimum payment on a credit card debt of $2,000 would pay $3,500 in interest and need 18 years to pay it off. ''My parents have warned me about credit cards, but they never told me the facts about them," she said.
Bruce Mohl can be reached at mohl@globe.com.
