My conversations and interactions this week with a Primerica financial representative and their training group here in the Oklahoma City area have me thinking a lot more about my own personal finances, as well as our need to help students learn concrete, practical lessons about responsible finance decisions while they are still in school. After twittering about these subjects this morning, I was delighted to read Diana Laufenberg’s post “Personal Economics,” in which she describes the approach her middle school teaching team has taken toward addressing these learning needs. Diana wrote:

The credit crisis in America should give rise to a larger conversation about teaching and practicing the skills of personal economics in a much more deliberate and meaningful way for students. The lack of money sense and restraint has contributed to the current national money debacle. There are some very simple but effective ways to bring basic concepts and habits of practice to our young people. This has to be one of the most relevant lessons that can be taught to all students and KNOW that they will need it as the years pass.

Kudos to Diana and her teaching team for taking the time and spending the effort it takes to implement their homegrown financial education program in school. I know I learned a great deal about personal finance growing up and even in college, but still managed to acquire a sizable amount of unsecured debt and make some financial decisions I now regret. We, in the United States, live in an extremely toxic culture when it comes to the goal of encouraging responsible financial decisions. Everywhere you turn, particularly in the advertising world, everyone seems to be trying to help you feel unhappy and unsatisfied, and convinced that purchasing THINGS can somehow fill this void of emptiness. Our culture constantly promotes immediate gratification, self-medication, and the act of shopping as the supreme outlet for entertainment as well as psychological needs. Within this context, it is extremely challenging to help people (young and old) learn to make and practice good financial discipline.

When I heard Rafe Esquith share the closing keynote address at TCEA back in 2006 (“There are no Shortcuts”) I was not only impressed by the musical and theatrical performances of his students, but was also amazed by the way he devised and implemented a classroom system for helping students learn the value of money and responsible money management. Living as many of us do in toxic educational environments with unhealthy emphases on high stakes testing, it can be easy to lose sight of the importance of these kinds of practical life lessons. Yet in addition to the lessons of respect and mutual care for classmates, lessons about money and personal finance have to rank high on a short list of topics most parents would love to see their children learn as a result of their school experiences.

money

Learning in an abstract sense, when it comes to money and personal finances, is not enough. I’ve read Napoleon Hill’s book “Think and Grow Rich” and most of “Rich Dad Poor Dad” by Robert Kiyosaki and Sharon L. Lechter. That does NOT mean, however, I have cultivated the practical discipline and habits required to responsibly manage my personal finances today and in the future.

Thankfully, none of us are limited to the lessons which our teachers provide us in a classroom context, and the open door of literacy and reading can provide unlimited paths to other learning experiences. The face-to-face experiences we have in the classroom can be transformative, however, and I encourage other teachers who may have contemplated a program focusing on personal finance to review the one Diana and her fellow teachers are implementing. No curricular program is going to provide “the magic key of financial learning” which will work for every student, but it IS important that teachers attempt to find concrete ways to help students learn these lessons themselves at an experiential level.

A brief look at our financial headlines lately drives home the importance of these themes. Michelle Singletary’s weekend financial editorial for the Washington Post, “Debt Addicts Get A Dose of Reality,” includes an eye opening interview with Stuart Vyse, author of ““Going Broke: Why Americans Can’t Hold On To Their Money.” Vyse states:

I think we mostly face greater temptations today. Earlier generations did not have to contend with Internet shopping, credit cards that are widely available, catalogues combined with 800 numbers, and a consumer economy that depends on everybody spending. At the same time, saving has gone out of fashion. The current generation has not acquired the habit.

Habits of mind and habits of action are CRITICAL to develop when we are young. We need more teachers like Diana willing to implement financial education programs during a school day already filled with competing priorities. I hope my own children will be fortunate enough to have teachers who find ways like Diana’s team have to provide students with practical learning experiences with personal finance.

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  • http://web.mac.com/theroyfamily/Site/Welcome.html Charlie Roy

    @WES
    As a former options trader and as a principal with a side habit of investing and trading I think your post is incredibly relevant. I work mostly with economically advantaged children who do not understand the value of saving money. I work with families everyday who live far beyond their means on credit cards and by sapping equity out of their homes. The day of reckoning is fast approaching. This past summer and fall are only a hint of the downturn ahead.

    When Japan hit a credit crunch it took ten years to come out of the cycle. Keep in mind that the average Japanese family was throwing money into savings every month. The savings rate in America is 1%. It might take us a little longer to turn the corner.

  • http://www.tech4teaching.org Tami Brass

    As a child of the ’80s, I recall having to take an economics class in high school which turned out to be a WWII era teacher trying to impart the wonders of capitalism (I recall him saying that Social Security would lead to Communism!) that seemed to conflict with what my home ec teachers were teaching – basic thrift, living below your means, and putting off immediate gratification for a brighter future. In a small town where the only “good” jobs were in a paper mill, a metal fabrication plant, and a sewing factory (my choice until I’d saved enough for college), it was hard to think of the future.

    20 years later, I return to the town every couple of months amazed how many of the kids I graduate with still don’t own homes but manage to drive new cars. It’s startling to see pawn shops have replaced coffee shops and finance companies have replaced small businesses. It’s pretty clear who listened to the home ec teachers and who listened to “Econ John” as we called him.

    For my own daughters, I know their schools don’t teach personal finance, as much as I’d love them to hear it from someone in addition to their parents. Our approach so far is a balance of media literacy (reminding kids that almost everything in stores, on TV/radio, in print, and online is geared to get them to spend) and limiting exposure to the advertising in an age-appropriate manner. That with model, model, model seems to be fine for elementary school and earlier, but with those adolescent years looming, I appreciate the resources you share. As a middle school teacher, I’m hoping to find ideas I can incorporate into my practice as well. Might personal financial health be a 21st Century Skill?

  • http://www.wesfryer.com Wesley Fryer

    Charlie: We certainly need to change some of our ways in the U.S., and our average savings rate is clearly one area that needs drastic improvement.

    Tami: I think financial management skills certainly are an important 21st century skill. We’ve always needed good money management skills, so it could be debated whether this is a “new” skill or not, but clearly we DO need this skill regardless of our age following high school, and really even in high school and collage. Credit card marketers start earlier and earlier with those free t-shirt giveaways. Trying to counterbalance that message of “get credit now and use it” seems a bit similar to advocating for open source software options. You don’t usually see booths in the vendor halls of conferences advocating for open source solutions, just as we don’t see ads in the marketplace sharing messages counter to the general consumerist mantra.

  • Emily

    I agree that learning about personal finances is important to learn in school. It is a great opportunity to teach about life lessons. The only issue that I have with it is that it is being taught at a young age. In middle school it is important to teach about the value of money, but learning about actual finance decisions shouldn’t be taught at that young of age. It would make more sense if it was taught in the high school level before students are entering into the “real world.” I remember learning how to file taxes in middle school and I do not remember much about it except that the form was confusing. It would have been more beneficial if I learned it in high school. Students at a middle school age are too young to truly appreciate the knowledge of taxes, debt or financial decisions.

  • http://teachersbag.edublogs.org Joel Zehring

    Dave Ramsey has a curriculum for high school students promoting his principles. Building wealth doesn’t have to be a selfish pursuit; it can be one of the best ways to help others.

  • http://www.wesfryer.com Wesley Fryer

    I have taken the “Financial Peace” course which Dave Ramsey has offered and I think it is excellent. I agree building wealth can be a very good thing– money is value neutral. The Good Book reminds us that the love of money is the root of all evil, not money itself. Lots of folks have and continue to do wonderful things with their wealth to help others.

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