Personal-finance Class Opens Students' Eyes
April 11, 2011 (The Sacramento Bee, Calif.) SACRAMENTO, Calif. - How many high school students pack a lunch to save money? How many have a financial plan for buying a car, going to college, paying for the prom?
Not too many, judging by the show of hands in a recent economics class at Burbank High School.
As part of a class talk on "budget busters," the teens got some fast-paced, practical schooling on money management, courtesy of Sacramento CPA Bruce Kajiwara.
"Many times in school, you think, 'Why do I have to learn this? I'll never use it,' " said Kajiwara, amid some smiling, nodding agreement from the 24 seniors.
But personal finances? "This is the kind of stuff you use every day."
Kajiwara's classroom appearance at Burbank comes during National Financial Literacy Month, an effort to get more American adults and students focused on sharpening their personal finance smarts.
For many Burbank High students, the topic is an eye-opener. In a south Sacramento school where 85 percent of students qualify for federal free lunches based on poverty-level incomes, learning financial skills at home isn't always possible.
That's why economics teacher Victoria Stolinski jumped at the chance to add some personal finance lessons to her three classes this semester.
"There's a hunger for financial knowledge," said Stolinksi, a Burbank teacher for nine years. "Considering the economic times and the financial meltdown, there's no more pertinent time to be teaching this."
Stolinski teamed up with the California JumpStart Coalition and the California Society of CPAs, which helped coordinate a personal finance curriculum from the National Endowment for Financial Education. She also lined up a number of guest speakers, like Kajiwara, to cover banking, saving, investing, insurance and other topics.
For his part, the veteran CPA ran through a number of mind-numbing topics that would put many adults to sleep: budgets, savings, needs vs. wants. But the father of three college-age kids engaged them, bouncing from estimating what the senior prom will cost (and how to pay for it) to budgeting needs (groceries, rent, insurance) vs. "wants" (cool clothes, cable TV, meals out), and even to their eventual retirement.
One of his biggest mantras: PYF, or "pay yourself first."
That means putting a portion - say, 10 percent - of earnings, whether it's from a fast-food job, an allowance or gift money - into a savings account each month. By starting now while they're young, Kajiwara told the seniors, they might end up like one of his clients whose accumulated savings and investments allowed him to retire at age 45.
By teaching personal finance in a public school, Stolinski is something of a rarity. Only 13 states require at least one semester of personal finance instruction, according to a 2009 study by the national Council for Economic Education. In most states, including California, teaching personal money management is voluntary.
There are some renewed efforts to change that.
Last month, state Sen. Ted Lieu, a Democrat and a longtime advocate of financial literacy in California schools, introduced Senate Bill 779, which would authorize school districts to include personal finance topics - budgeting, saving, credit, identity theft, etc. - in existing economics classes. The bill also asks the state Department of Education to consider a personal finance curriculum.
Another measure, Assembly Bill 597 by Democratic Assemblyman Mike Eng, would create a financial literacy fund that would use private donations for personal finance programs in California.
"Our entire financial system is built on disclosure, whether you're buying mutual funds or opening a bank account or taking out a loan that will adjust in five years and sock you with huge debt," said Lieu. "We require mounds of disclosures to try and protect consumers ... but if the consumer doesn't understand them, the disclosures are meaningless."
To assess just how much America's teens know about basic personal finances, U.S. Treasury officials last week urged high school teachers to offer students a free financial literacy exam. Last year, nearly 77,000 students nationwide took the "National Financial Capability Challenge." Nationally, the average test score was 70 percent; among California students who took the test, it was 65 percent.
But even teachers who want to incorporate financial literacy into their lesson plans don't always know how or where to find the resources, said Variny Paladino, the California-based regional director for the national JumpStart Coalition and co-author of "The Teen Girl's Gotta-Have-It Guide to Money."
"There is no formal training in how to teach personal finances and money," she noted. Those teachers who do, like Stolinski, "may be the sole teacher in their school or district who's trying to integrate financial education into their classroom."
If Stolinski's classes are any indicator, the money messages are sinking in.
Rashika Singh, 18, said her takeaway from Kajiwara's talk: "Saving is hard. But you need to budget. You need to fulfill your needs before you fulfill your wants."
Another student, Tam Nguyen, sporting a studded collar and a tattooed forearm, works as a dishwasher at a local restaurant. Until Stolinski's class, the 17-year-old said he'd never thought much about saving anything from his paycheck nor did he know much about the stock market. But Nguyen, who hopes to attend community college and major in culinary arts, said his goals have changed.
"No one ever talked to me about budgeting or saving until I got in this class. This semester has really changed my thinking."
That's exactly what financial literacy advocates want to hear.
It's critical that California students acquire the skills needed to become "financially literate consumers," said state lawmaker Lieu.
"Is it more important that you understand complex algebra or how to buy a car?"
Personally, said the father of two boys, "I'd rather have my kid understand how to buy a car."