Money lessons high-school kids need

Scripps Howard News Service

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With sidebar: TEENSIDE

With photo/graphic: SH08E017TEENMONEYLESSONS, SH08E018TEENMONEYLESSONS, SH08E019TEENMONEYLESSONS

By CLAUDIA BUCK

Sacramento Bee

For the 15 girls clasping hands in celebration, their recent graduation ceremony was a rite of passage.

But it wasn't based on passing final exams or worrying about a grade-point average. For these young women at Luther Burbank High School in Sacramento, Calif., who've spent seven months in a weekly after-school class on personal finance, it was about how to write a check, shopping smarter, getting the best rates on car insurance and avoiding predatory lenders.

Oshualique McDaniel, a 15-year-old freshman, summed up what she learned: "Save your money in a bank and for things like scholarships. It'll help me in my future, so I'll have money saved and not just spend it like crazy."

At a time when the mortgage meltdown has knocked a good number of adults to their financial knees, McDaniel and her classmates are benefiting from a renewed urgency nationwide to get young people financially fit before they leave high school.

Billionaire investor Warren Buffett is doing voiceovers for kids' cartoons on investing. NFL players are showing up at high-school campuses to tackle money concepts with a "Financial Football" video game. Web sites and books aimed at teens are proliferating.

Even Federal Reserve Chairman Ben Bernanke took a stand. Speaking in Washington earlier this year, Bernanke said it's "critically important" that young people "become financially literate at an early age so they are better prepared to ... navigate an increasingly complex financial marketplace."

They've got a long way to go. According to a nationwide survey released recently by the JumpStart Coalition for Personal Financial Literacy, 6,860 high-school seniors correctly answered only 48.3 percent of questions on financial concepts. In California, the number was even lower: 44 percent.

Like 17 states nationwide, California requires high-school students to complete one semester of economics, usually in the senior year. But personal finance -- how-tos on budgeting, saving, insurance and the like -- isn't mandated. Only seven states require it for graduation.

In the regular economics class at Luther Burbank High School, David White's students spend part of their semester playing "The Stock Market Game." Student teams compete in investing a hypothetical $100,000 in companies they research and select.

But not all economists laud such investing games. Timothy Taylor, an economist at Macalester College in St. Paul, Minn., who trains high-school teachers in how to teach economics, says it's a big mistake.

"That's really not useful for the average high-school student to know," said Taylor, who recommends more "how-tos" on financial basics: insurance, loans, budgeting and borrowing.

The need for financial literacy is particularly acute among teens in low-income communities, said Clarence Williams, president of the nonprofit California Capital Financial Development Corp., which created Luther Burbank's after-school curriculum of 36 one-hour sessions.

"It's a different financial system in lower-income communities," said Williams. "There are predatory forces, everything from check cashing and payday loans to rent-to-loan agreements where people end up paying three times the price of a TV."

He and others contend that if kids aren't getting these lessons at home, schools and after-school programs can fill the gap.

For 11th-grader NaKiesha Nolan, the Luther Burbank class "opened my eyes to what's going to happen the day I turn 18," she wrote in a class evaluation. "Bills, rent, insurance ... now I'm prepared."

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)