Why fiscal education is difficult

first_imgNew questions in this year’s survey also show a strong correlation between test scores and what I consider an attitude of responsibility and personal accountability that parents should foster. For example, students who believe financial difficulties stem mostly from bad luck, or feel that not having enough money to pay the bills is “not so bad,” or that people who retire without having saved much can live “pretty well” from Social Security, scored particularly low. Students who said buying too much on credit is the usual cause of financial trouble, and who feel not having enough money to pay the bills is bad and that retirees will find it tough to live on Social Security, had higher scores. Humberto Cruz offers personal finance advice. Write him at [email protected] local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREBasketball roundup: Sierra Canyon, Birmingham set to face off in tournament quarterfinalsHow best to teach financial literacy – including whether to just leave it to the parents – has been debated for years. Most educators today recognize the need for students to learn the basics of managing money, including credit and insurance, by the time they leave high school, if not sooner. Another survey by Junior Achievement released this spring showed 10 percent of 17-year-olds and 20 percent of older teenagers have credit cards, and that nearly 16 percent of teens with credit cards make only the minimum payment, a surefire road to financial trouble. But some educators also are concerned that educational materials used in schools, even if typically of high quality and devoid of commercial pitches, are often prepared and made available by financial firms with a product or service to sell. (The latest Jump$tart survey was funded by the Merrill Lynch Foundation, a philanthropic arm of the brokerage firm.) Rather than develop a separate course, schools tend to incorporate financial literacy concepts in these materials into a broader subject, such as social studies. Based on the latest results, that doesn’t seem to be a bad approach. While one in six students reported taking an entire course in money management or personal finance, the average score in the test of those who did was 51.6 percent, below the average for all students. “We have to assume we have not found the right teaching method,” said Laura Levine, executive director of the coalition, which serves as a national clearinghouse for personal finance curriculum materials. Mandell said it is also possible that students “don’t focus much on financial literacy and don’t retain what they have learned because they don’t think it is relevant to their lives.” Levine said an interesting finding over the years has been that students who participate in the popular Stock Market Game, in which school teams compete to see which has the most money in a make-believe portfolio after 10 weeks, tend to score better in financial literacy tests. (I have misgivings the game may encourage a short-term trading mentality in stocks, rather than long-term investing.) Let’s test your financial literacy. Which of the following tends to have the highest growth over periods of time as long as 18 years: (a) a U.S. government savings bond; (b) a savings account; (c) a checking account; or (d) stocks? This was one of 30 multiple-choice knowledge questions in a financial literacy test given to 5,775 high school seniors last December and January in 305 schools across the country. It was the latest in a series of surveys by the not-for-profit Jump$tart Coalition for Personal Financial Literacy every couple of years since 1997. According to the test results recently released, 45 percent of the students picked the savings bond, and another 35 chose the savings account. The correct answer is stocks, which over 18-year periods have consistently done better than all other choices given, often by wide margins. Lewis Mandell, a professor at SUNY Buffalo School of Management, has conducted all the high school surveys for Jump$tart, which seeks to improve the personal financial literacy of students in kindergarten through college (see Web site www.jumpstart.org). last_img read more


December 27, 2019 0