Real money savvy in the real world

LOCs, DTIs, CPAs, college funds, checkbooks, taxes…it's enough to make your head spin. Finance is one of those eternally elusive things, like a bar of soap that's fallen to the bottom of the sink. Unless you've already got a good grasp on it, it can be really hard to pick up. And during tough economic times, it is now even more vital that students know how to manage their own funds.
Most of us don't know enough about money to last even a fraction of a fiscal year managing our own bank account. And we're the very same students who, in a couple years, are expected to be financially independent. Whether a student goes to college or enters the workforce after high school, he or she will have to deal with money in some capacity. It could be loans, a paycheck or even just the dilemma of what to do with a quarter lying on the sidewalk, but sooner or later, high school students will have to learn to manage their own funds. Post-recession belt-tightening will only make money management a more critical set of skills for everyone. And now is the time to acquire those skills.

In January, state comptroller Peter Franchot will propose legislation requiring mandatory financial literacy instruction for all students in Maryland high schools. And Franchot chose Blair, with its entrepreneurship academy and business program, as the model school. The academy's classes provide perfect examples for the proposed instruction because it already teaches the skills that students need, including everyday money management and business savvy. Franchot's plan is to make these essential skills available to all students through mandatory instruction, which would include lessons in business management, investment, insurance and even learning to balance a checkbook.

Most students at Blair, or in the entire state for that matter, don't know enough about managing money to get by in the real world, according to Kevin Murley, head of the entrepreneurship academy. In fact, according to a poll by the JumpStart Coalition for Personal Financial Literacy, students are less than 50 percent literate in handling their own finances, which includes balancing checkbooks and understanding their financial options, based on a standardized assessment of financial literacy.

The value of fiscal instruction is indisputable. America is filled with people without those skills and those are the people who have bought houses they can't afford and don't know how to pay off their steeply rising mortgages. The question is how to go about its implementation. An entirely new financial literacy class would not be feasible because of the current deficit in school staffing and funding. The other option would be to ask students to pick an elective that already covers financial literacy skills to take before graduation. Asking students to choose from an existing class, however, such as quantitative literacy or finance, would ultimately result in decreased enrollment for other, but no less important, classes. And if the class wasn't mandatory, it's unlikely that many people, least of all the students who need it most, will choose it of their own free will.

There is, however, a more responsible option, one that would be relatively painless for students. It might be possible to casually slip four or five weeks of financial literacy into a class that is already required such as the existing economics unit of an NSL class, suggests academy coordinator Kevin Moose. The overwhelming list of things to know when it comes to buying, selling, saving, retiring, investing, insuring, loaning and borrowing could all be condensed into a mini-course in fiscal responsibility. Sure, the additional material would post a serious time crunch for teachers. But financial literacy is at least as important as knowing the intimate details of a bicameral legislature, so it's something for which it's worth condensing the lesson plans.

Knowing the ins and outs of money management isn't something that students or their teachers can shrug off. Schools must now match Franchot's financial literacy plan step for step. It is a precious investment in students' futures. In uncertain economic times, it's no longer enough to be on shaky ground - schools must provide the foundation students need to build rock-solid financial knowledge and a certain fiscal future.