Consumerist: financial literacy

"Financial illiteracy has reached epidemic ...

Chris Walters — Wed, 17 Sep 2008 22:25:38 EDT

"Financial illiteracy has reached epidemic levels." Author Braun Mincher has an editorial in the Austin American-Statesman on why every school in the U.S. should teach financial literacy. [Statesman]

Tennessee May Soon Require Financial Literacy Classes For High School Students

Chris Walters — Mon, 14 Jan 2008 17:40:04 EST

The Tennessee State Board of Education is expected to pass a bill on January 25th that will make Tennesee the eighth state (after Georgia, Idaho, Illinois, Louisiana, Missouri, South Dakota, and Utah) to require that its high school students take a personal finance class before graduation.

Tennessee has "one of the highest numbers of bankruptcy filings in the nation," and its students scored lower than the national average on a personal finance test (not that the national average—38%—was anything to be proud of):

Scores of Tennessee high schools already offer a personal finance course as an elective. But a 2006 survey by JumpStart Coalition for Personal Financial Literacy shows that only 29.8 percent of Tennessee students who took a personal finance test passed it. The test covered topics from money management to savings and debt. Nationally, 38 percent of students who took the test passed it.

According to the National Council on Economic Education, only one state required any sort of personal finance class to graduate in 1998, six states required it in 2004, and seve in 2007. Is this the beginning of a real shift in teaching personal financial literacy?

"State pushes money literacy" [The Tennessean]

"Checkbook Math" Being Phased Out Of High Schools

Chris Walters — Thu, 06 Dec 2007 19:19:44 EST

We may indeed have a nation of financially illiterate youths, but despite cries for increased financial education in public high schools, the one program that's historically addressed this—"checkbook math"—has never enjoyed a reputation as a "real" math class because the actual math skills involved are so basic, and it's being phased out as most students avoid it because, as one student says, it "doesn't look good for colleges."

The problem, writes the Washington Post, is that since higher math classes and "consumer math" classes teach very different skill sets, many students graduate high school competent in higher math but unfamiliar with the sort of basic knowledge used to manage bank accounts, loans, and investments.

"This is actually the one class I think is realistic toward becoming an adult," said Rountree, 17. "We learn how to balance checkbooks, which is a life need. We've learned how to purchase a car on kelleybluebook.com. Consumer math is, I think, the one class that has actually helped me."

The article looks at how Virginia's statewide mandate to teach personal finance skills has played out over the past few years, with finance-related topics scattered throughout other programs instead of condensed into a specific course. Personally, we've always thought of consumer math as a sort of home economics subject, to be taught alongside "real" math classes, not in place of; you wouldn't subsitute a history class for an English class just because both require reading comprehension. One professional, however, has another suggestion:

Fennell, of the math teachers council, believes high schools should retool consumer math as a more rigorous course, with exercises rooted in algebra rather than arithmetic, exploring such topics as the complexities of a cellphone plan and the spiraling debt engendered by a credit card.

"'Checkbook Math' Increasingly Rare" [Washington Post]
(Photo: Getty)

Government Wants To Sneak Financial Info Onto Soaps And Telenovelas

Chris Walters — Mon, 29 Oct 2007 06:28:08 EDT

When we posted about "30 Rock" last Friday, a reader SHOUTED IN ALL CAPS that someone—either NBC, or Tina Fey, or maybe The Consumerist, we're not sure—is a government shill for basically being paid by the gov to write about financial advice. Turns out Mr. Shouty is right, sort of: the U.S. Treasurer, Anna Escobedo Cabral, was on the radio news program "Marketplace" a couple of weeks ago to talk about how she's been meeting with the creative teams of soap operas and telenovelas to find ways to incorporate financial storylines into their plots.

The idea, Ms. Cabral says, is to "reach people at teachable moments in their lives" by finding multiple ways to get educational messaging out in the public space.

"Too many kids are graduating high school, for example, not knowing what a budget is, how to balance a checkbook, what a credit card is, what an interest rate is, or how compound interest works... If the treasury tries to do this by itself, it will not be successful, but if you do this in partnership with all the other segments of society, you're likely to be very successful and in the end the public and the entire country is better off."

We can't find any evidence that the government is paying networks to do this, or that "30 Rock" was doing the U.S Treasury a favor with its 401(k) joke, but it's certainly possible. Ms. Cabral says she originally wanted Joey on "Friends" to "get into financial catastrophe and then through that humor, teach while he was entertaining," so clearly the idea has been floating around for a while.

"Financial education from soap operas?" [Marketplace] (thanks to Granolaheadesq!)

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mymoney.gov [U.S. Treasury]
(Photo: Getty)