PRESS OF ATLANTIC CITY

Area high schools' investment in personal finance grows

By DIANE D'AMICO Education Writer, 609-272-7241
(Published: Monday, February 02, 2009

)

When Bart Simpson got a credit card by mail, he immediately began splurging on mail-order purchases, leading to the inevitable visit from the Repo Depot.

"What were some of the mistakes he made?" Absegami High School teacher Dawn Kosko asked students in her personal finance class after they watched a snippet of "The Simpsons" TV show as a lead-in to a lesson on credit cards.

Responses included impulse buying and having no ability to pay for what he bought.

Student Philip Harrah agrees. He doesn't have a credit card and doesn't plan to get one.

"I worry about impulse buying," the Absegami senior said. "I have a job and I'm trying to save for college."

The dangers of abusing credit is not new. Since 1995, the Jump Start Coalition for personal Financial Literacy has been promoting better education of finance for all students. But understanding finance has taken on a greater urgency in the recession as more families learn the real meaning of an interest-only loan, or discover that the college fund is worth a lot less today than a year ago.

"There is more concern about money this year," said Kosko, who has taught the course for six years. "Students worry about being able to find a job or afford college."

The state Assembly passed a bill in September that would establish a pilot project to teach personal finance to students in six high schools in the state. The Senate Education Committee approved its version of the bill last week.

But schools across the state have not been waiting for a mandate.

"They could just ask us to be the pilot," said Ocean City High School Principal Matthew Jamison. The school has had its own personal finance requirement for at least the past five years. All freshmen and transfer students take the half-year course which touches on banking, credit, car loans, mortgages and business.

"I think because locally we have so many small businesses, people really appreciate why understanding finance is important," Jamison said. "But this year there is heightened awareness of the requirement, with parents saying 'Hey, that is a good idea.'"

He said the district made the course a freshman requirement because that is when students start to earn their own money, and because it sets the foundation for continued financial topics in math, social studies and business courses. The course provides an overview of the workings of finance and focuses on the role students play as consumers. Students learn about credit cards, banking, car loans, mortgages, savings and investing.

"It's always a shock when they learn they will earn only 2 percent on a savings account but might be charged 19 percent on a credit card," Jamison said.

William Kempey, president of the New Jersey Council on Economic Education worries that "financial literacy" has become a buzzword with no firm definition. He said all students need to manage their own money, but also should understand the bigger picture of national and even global finance.

"A basic understanding of economics is necessary because that's how you can tell if something is too good to be true," he said, adding that companies now promising to save people from foreclosure and bankruptcy may end up costing consumers even more because they can't tell if they are being scammed.

"There is just a dismal understanding of finance," he said. "But how much time can schools put in on this?"

He believes basic financial lessons can begin even with second-graders and certainly should be taught in middle school. The NJCEE runs the popular Stock Market Challenge game, and Kempey said elementary and middle school students participate every year, learning about investing while they play.

The New Jersey Department of Education has proposed requiring a half-year course in economics - including financial, economic, business and entrepreneurial literacy - for every high school student. Financial literacy is currently included in the state Consumer Family and Life Skills standards and will be more integrated into the new revisions, state officials said.

Richard Stockton College is developing workshops on financial literacy for teachers, and plans to include at least once required course in economics in its Masters in Education for Social Studies teachers.

But without any definitive requirements, schools are left to determine their own courses.

The Absegami course is a full-year elective, taken by about 120 students a year who learn about budgeting, saving, investing, credit, banking, insurance, buying a car and a house using a workbook provided by the National Endowment for Financial Education. Kosko said interest has grown, and at Back to School nights parents have even asked if they could offer the course to adults.

"It has been a pretty exciting year," she said, "but not in a good way. We are teaching from the headlines."

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