Once is Not Enough—Together, Yes We Can

April 23 Once is Not Enough—Together, Yes We CanBy Helen Roberts, Clinical Professor in Economics at UIC and Director, UIC Center for Economic Education

Practice Makes Perfect

How can our children learn the necessary skills and knowledge to be financially literate? Like reading and driving and other important life skills, one try, one course, one time is not enough to be proficient.

To learn to drive a car, students must learn the rules of the road. To drive their financial lives, students need to learn the rules of good financial life, such the importance of saving, budgeting, and protecting their money. Just as reading about driving is not enough, students need to practice as they go.

Plan the Journey

What does it mean for schools to take financial literacy seriously? In the Chicago Public Schools, the several departments (such as math, social studies, counseling, literacy) and outside partners are cooperatively developing a financial literacy curriculum guide with links to resources for teachers for every grade from Kindergarten through High School. The guide will be the road map. Children do not become literate in reading in one short course. They also need well-designed and age-appropriate curriculum, including repeated practice, to become literate about the financial economy. They need to start at an early age and to deepen their understanding of the financial world as they grow and develop. Parents are crucial at every step—living examples and frequent opportunities to practice making good financial decision, reinforcing good financial decisions like saving for desired toys and activities.

A financial literacy curriculum guide recognizes that even young children are constructing their world and are taking action in it. Kindergartners trade with each other, make choices, and perform many other economic activities. They love to see how understanding the rules and identifying their costs (including opportunity costs) can improve their choices.  As children grow, their choices and horizons broaden. As they progress through the grades they learn about choices and opportunities for families, communities and countries, about earning income, saving, credit, investing, and protecting and insuring.  Financial literacy is so much more than just budgeting and banking!  Students build understanding through the grade levels. The guide will give teachers lessons that both teach how the world works and age-appropriate just-in-time financial applications for grade. Teachers can choose from a menu of activities and lessons to fit their students’ interests and needs.

Teachers as a group often do not feel prepared to teach financial literacy topics, let alone economics topics as well. Along with the course design and financial literacy curriculum guide, many entities are working together to provide. Professional development for teachers new to economics and financial literacy. Both outside partners and teachers previously trained and experienced with implementing these lessons with Chicago Public Schools children help to prepare teachers new to the capstone course and the curriculum guide.

What does ‘financially literate’ really mean?

The culmination is a 12th-grade capstone financial literacy course, which this semester is being taught for the 3rd time. In this course, students learn how the economic way of thinking and making decisions work, supply, demand, and government interact—how the economics of the world they are about to enter works. They study career choice and preparation, getting jobs, and entrepreneurship. It is exciting to hear their plans for the future! They learn how to protect and invest their savings, when to borrow and when not, and what questions to ask at each stage in their lives. Finally, they learn about consumer protection and insurance. The world is risky, so which risks should I insure against?  Again, not worksheets but real problems and practical answers. How to properly fill out a job application, and where to be suspicious when a fast-talking market guru puts on the hard sell.

Signs of progress

The early results from Chicago are encouraging. The financial literacy curriculum guide is nearing completion. The capstone course has been taught several semesters. Teachers and students like the course—it is relevant and fun. Students’ confidence in their decision making, career choices, and risk management rises after the course. Teachers report that students request the Econoland Game: Please, let’s play it again! On learning that by NOT saving, they give up interest they could have earned, they choose to save. We look forward to better financial choices in the future!

POSTED: April 23, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , , , , , , , , , ,

Financial Literacy: Its Importance in the (Woman’s) Future

April 22 150x150 Financial Literacy: Its Importance in the (Woman’s) Future

By Kathleen Brennan, 2013 Alfred P. Sloan Foundation Teaching Champion Award recipient.

It goes without saying that today’s females have career opportunities that weren’t available to them a century ago.  The statistics are impressive– according to the U.S. Bureau of Census, females make up 60% of college graduates and the Bureau of Labor Statistics reports that labor participation rates of females have increased from 32% in 1950 to about 57% in 2012. Women have come a long way. The good news is that women have made great strides in breaking the glass ceiling and closing the pay gap; the bad news is that they still lag well behind men in terms of financial literacy. Ignorance in financial matters is particularly concerning since women have unique financial challenges—while many women rely on their husbands “to handle the money”,  the reality is that 90% of women will be solely responsible for their finances at some point in their lives due to the death of a spouse or divorce (Gender Gap in Financial Literacy 2012). Clearly, a man cannot be a “financial plan”. Read more…

POSTED: April 22, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , , , , ,

Financial Literacy within Our Communities

April 16 240x300 Financial Literacy within Our Communities By Carolyn Berkowitz, Managing VP of Community Affairs at Capital One; President of the Capital One Foundation.

Today, young people are facing challenges no other generation has faced as they become adults and adapt to an ever changing world. The great recession has left us a job market and economy that are still rebounding, while the cost of college and living are higher than ever. If our children are to grow up to be productive, independent and fulfilled, it is imperative they understand the principles of money management — how to use money wisely, how to save it and how to make it work for them.

Research shows that millennials feel strained when it comes to personal finances. In fact, earlier this year, FINRA released a survey that shows 36% of 18 to 24 year olds have student loan debt and 55% of them fear they won’t be able to pay down their loans. Only one third of respondents have emergency savings, 31% have unpaid medical bills and nearly half carry a balance on their credit cards. Read more…

POSTED: April 16, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , , , ,

Increasing Financial Literacy to Address the Student Loan Debt Crisis

April 9 150x150 Increasing Financial Literacy to Address the Student Loan Debt Crisis

By: United States Senator Jack Reed (D-RI)

April is an exciting time for high school seniors. Graduation is just around the corner and college acceptance letters are rolling in, and with them an overwhelming sense of possibility and anticipation for students, along with a measure of joy and worry for parents.

Getting into college is an admirable achievement, but paying for college is a long-term commitment.

Indeed, according to the Project on Student Debt, 71% of college seniors who graduated last year had some form of student loans to pay back, with an average of $29,400 per borrower. Read more…

POSTED: April 9, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , , , , ,

Advocating for Our Children’s Future

April 8 200x300 Advocating for Our Children’s Future

By David Nelms, Chairman & CEO of Discover Financial Services

Financial education in school, coupled with regular money discussions at home, is necessary to help students become knowledgeable about money, establish good financial habits and avoid the economic pitfalls that can derail them from achieving their goals. As parents, teachers and community and business leaders, we are accountable for providing young people with access to academic instruction and life skills training. When we fail to do so, we deprive them of the knowledge they need to make good financial decisions that have lasting implications to their futures. Read more…

POSTED: April 8, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , , , , , , , ,

Let’s Add an “F” to the Three Rs – Reading, Writing, Arithmetic, and Financial Literacy

April 4 199x300 Let’s Add an “F” to the Three Rs – Reading, Writing, Arithmetic, and Financial LiteracyBy Congressman Matt Cartwright, Pennsylvania’s 17th Congressional District.

This month we celebrate Financial Literacy Month in an effort to bring attention to this important life skill and encourage all Americans to take charge of their financial health. We’re confronted with a variety of financial decisions throughout our lives. Whether saving for retirement, buying a home, financing an education or simply putting away money in an emergency fund, a solid financial education is vital to making smart and responsible decisions.

The importance of consumer sophistication on financial matters has never been more important than it is in today’s economy. Unfortunately, Americans receive a failing grade when it comes to the subject.  According to Harris Interactive’s 2013 Consumer Financial Literacy Survey only 40 percent of adults say they have a budget and keep close track of their spending.  Approximately 60 percent of adults reported that they have not reviewed their credit score within the past year. Read more…

POSTED: April 4, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , , , , ,


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