State pushes money literacy Personal finance course to be required in high school
By NATALIA MIELCZAREK Staff Writer
A new policy will force students to learn Money 101 in a state with one of the highest numbers of bankruptcy filings in the nation.
The State Board of Education votes Jan. 25 on a requirement, starting with today's seventh-graders, that students take a personal finance class in high school. It's expected to pass, and local districts will determine which year of high school to offer the course, said David Sevier, the education board's policy adviser.
At least seven other states offer similar courses, a National Council on Economic Education survey shows. The curriculum typically covers investing, credit cards and record keeping.
A similar elective class at La Vergne High last semester changed senior Lindsay Duncan's life, she said. A front desk helper at a local YMCA, she routinely spent her paychecks on fast food and clothes.
After she learned how to set up a savings account and distinguish between needs and wants, she saved $1,000 toward her own car and puts away $50 every time she gets paid.
"I kind of feel like I was living in a bubble," she said. "I didn't think anything about saving and putting money away for retirement. A personal finance class should be a requirement before we go off to the real world and learn it the hard way."
The new class requirement is a part of sweeping high school reform in Tennessee to strengthen graduation requirements and prepare young people for college and the work force. The changes stem from last year's roundtable meetings Gov. Phil Bredesen held with business leaders, who said Tennessee graduates lack basic academic and life skills.
Nashville financial planner Bill Garrett said it's past time for such a policy. He helps clients in their 30s and 40s manage their money and sometimes recover from spending mistakes.
"Kids in high school today don't understand why it's better to save early on instead of catching up later," Garrett said. "Nobody told them."
Many fail finance test
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.
"They're going into their adulthood without sufficient knowledge of how to manage their money," said Laura Levine, the coalition's executive director. The group supports personal finance education in schools, homes and after-school programs.
"That doesn't necessarily mean they're doomed, because people learn, but it's important to educate kids before they go out into the world because that's the best chance of teaching before someone makes mistakes."
That's what personal finance teacher Donna England sees every day. She said she supports the board's idea to make her subject a requirement.
"The kids who don't realize how to handle their money, they're starting out thinking they should be at the same status as their parents are; they want to have the half-a-million-dollar house today," said England, who was Lindsay Duncan's teacher last semester.
"They're going out there, getting in debt and owing all this money. You hear more and more about foreclosures, and that's where the students are headed because they don't realize what they're in for."
