Push for financial literacy spreads to schools
More students taught to avoid the dangers of credit-card debt.
Create a budget and stick to it. Shop around for the best price. Pay off credit-card balances each month.Skip to next paragraph
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Roy Kobert set aside his work as a bankruptcy attorney one Friday morning to teach these and other personal-finance lessons at Boone High School. He starts by showing the 11 students of this senior-level business class a Saturday Night Live sketch in which Chris Parnell touts a book called, "Don't Buy Stuff You Can't Afford." He garners laughs then delves into the basics.
The students listen up. Three say they already have credit cards. One says his dad makes him read books by personal finance expert Suze Orman. All say most of their friends have no idea how to manage money.
"They spend stuff on little stuff," says Hillary Haskins, a 17-year-old senior. "It adds up."
Mr. Kobert knows many adults never will master what he's teaching. But with the economy spiraling, interest in financial literacy is growing. Nationwide, a movement is spreading, with the emphasis on children and young adults who advocates want to reach before credit-card companies do.
If creditors can coax them into debt at an early age, their future may be jeopardized. Young people risk losing out on jobs because more than 70 percent of employers check credit reports of applicants. Apartment complexes do, too, and so do graduate schools. Poor credit can jeopardize student loans.
To improve the financial health of students, 17 states have added personal finance requirements to school curriculums over the past five years. Three states – Missouri, Tennessee, and Utah – now require personal-finance courses. Last year, former President Bush appointed a President's Advisory Council on Financial Literacy. Local programs are sprouting, too.
The efforts target everyone from the underprivileged to senior citizens, but especially young people. In Orlando, the University of Central Florida held its first Financial Literacy Day last year. Representatives from the Federal Deposit Insurance Corporation (FDIC) answered questions on campus while students ate free pizza.
"To really shift how we think about personal finance and how we deal with it, we can educate adults," says Laura Levine, executive director of the Washington-based Jump$tart Coalition for Personal Financial Literacy. "But with young people, if we can catch them early, we can in fact change their path going into adulthood."