Teenagers lacking education on the financial facts of life
Aug 02, 2009 04:30 AM
Today’s teens know all about the facts of life, except when it comes to managing money.
With easy access to credit, they can afford to buy clothes, cosmetics, concert tickets or cellphones without paying close attention to costs.
Seeing their parents using credit to plug the gap between income and expenses, they often adopt the same habits.
What’s the solution? Should we teach students in high school how to stay solvent?
Ontario requires Grade 9 students to take courses in citizenship and career studies. But it has no mandatory course in money management.
Gary Rabbior, president of the Canadian Foundation for Economic Education (CFEE), wants youngsters to get help in handling personal finances.
But he’s not a fan of compulsory high school courses.
“Research shows they don’t have much impact,” he says.
In the United States, most states require students to receive some exposure to consumer education – including economics, consumer decision-making, consumer law and personal finance.
But in tests of their knowledge, students perform the same whether they take a course or not.
Lew Mandell, a finance professor at the State University of New York, often talks about the results of a test of high school seniors in 33 U.S. states in 2004.
Overall, students got just 52 per cent of the answers right. Students who had some financial literacy training barely did better at 54 per cent.
Research shows that children can’t become lifelong learners unless they receive an underpinning foundation of knowledge all the way through school.
To Rabbior, this means integrating financial skills into the core curriculum, from kindergarten to Grade 12.
His foundation has created the Building Futures Project to work with provincial education departments to prepare students for their future roles and responsibilities.
Manitoba is the first province to commit to the idea. It plans to implement an integrated K-12 curriculum in the next two to three years.
Ontario is studying the idea, but hasn’t committed yet.
The hope is that students gain more competence and confidence in making financial decisions.
This should lead to an improved ability to ask questions, find relevant information, avoid frauds and scams and plan effectively.
Teachers need to elevate their own confidence before taking this information into the classroom, says Rabbior. Many don’t feel up to the task.
Ontario teachers already have many resources they can use to teach students about personal finances.
The Canadian Bankers Association has YourMoney, a program aimed at high school students, that is detailed at yourmoney.cba.ca. Presented by local bankers, it has run in classrooms across the country since 1999 and reached nearly 170,000 students.
Visa Canada has a free financial literacy resource, Choices and Decisions, that was launched in 1996 and updated this year. See: practicalmoneyskills.ca.
The Investor Education Foundation, an arm’s-length agency of the Ontario Securities Commission, has Taking Stock in Your Future, a set of classroom resources. See: investored.ca/teachers-corner
Humour helps reach teens, which explains the success of the foundation’s Funny Money presentations with stand-up comic James Cunningham.
Offered to 50,000 high school students in Ontario, Funny Money will be going across Canada, thanks to funding from the Investment Industry Regulatory Organization of Canada.
Next week, we’ll look more closely at financial literacy for young people.