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Bringing Financial Literacy Success Back to Your School

Bringing Financial Literacy Success Back to Your School. Financial Literacy Instruction Implementation Strategies & Resources. Susan Sharkey National Endowment for Financial Education. The Realities about Youth. Projected to spend $200 Billion this year Spend on average $70 a week

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Bringing Financial Literacy Success Back to Your School

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  1. Bringing Financial Literacy SuccessBack to Your School Financial Literacy InstructionImplementation Strategies & Resources Susan Sharkey National Endowment for Financial Education

  2. The Realities about Youth • Projected to spend $200 Billionthis year • Spend on average $70 a week • Receive 20-41% income from parents • 55-60% have savings account • (late teens) 31% have credit card • 2/3rd learn about managing $ from parents • 1/3rd learn about managing $ in school Source: Teen Research Unlimited

  3. College Reality – APLUS Research 2008Examine factors that shape financial attitudes & behaviors Average $169credit card debt Nearly 73 percent students resorted to one "risky" financial behavior Average $2,046 outstanding education loans Nearly one in five of those surveyed had used some extreme strategy for meeting day-to-day financial need Higher parental expectations & own positive attitudes towards responsible financial behaviors linked to fewer risky behaviors Parents have more influence over their children's financial knowledge, attitudes and behaviors than work experience and high school financial education combined Arizona Pathways to Life Success for University Students (APLUS), University of Arizona study – Wave 1.0, 2008

  4. College Reality – APLUS Research 2009Examine how young adults adapt to economic crisis • Nearly all reported that crisis impacted families, finances, money management • Increase in credit card debt • Decline in psychological, physical, financial well-being • More responsible budgeting behaviors but few savings behaviors • More typical and extreme coping strategies • Riskycoping strategies rosesharply • 169% increase in dropped classes • 106% increase in leaves of absence • 78% postponed health care • 26% increase in use of one credit card to pay another • Strong trust in financial institutions more than 50% lower compared to 1997 national study of young adults Arizona Pathways to Life Success for University Students (APLUS), University of Arizona study – Wave 1.5, 2009

  5. Where do youth learn about personal finance? Home School ?

  6. What do Youth Say? Although teens said they prefer to learn about money from their parents over friends, reading a book or taking a personal finance class, only 24% said their parents discuss money management and banking concepts with them regularly, 13% of teens said their parents never discuss money with them. (Capital One, 2009) The majority (52%) of young adults between the ages of 23 and 28 consider "making better choices about managing money" the single most important issue for individual Americans to act on today. (Schwab, 2009) When asked which aspects of personal finance they wish they had learned more about before entering the workforce, living within a budget (45%), and the importance of saving (42%) rise to the top of the list.(Schwab, 2009) More than half of the parents said they think their teens' knowledge of money management is good to excellent but only 20% of the teens in question agree. (Capitol One & Consumer Action)

  7. and What do Parents Say? Almost half of all parents say they don’t set a good example when it comes to handling their own money and are not capable of properly teaching their children. (Northwestern Mutual) Nearly 72% of the parents acknowledged they primary source of personal finance education, although 44% admit to needing more guidance on how to best teach their children the skills necessary to become financially responsible and successful adults.(The Hartford Financial Services Group, 2008) More than two-thirds of parents (69%) admit to feeling less prepared to give their teens advice and guidance about investing than they do the “birds and the bees.” (Schwab, 2008) While 71% agree that the best way for teens to learn about money is from guided, hands-on experience or their own example, only one in five parents (20%) involves their teen to a great extent in the family’s budgeting and spending decisions. (Schwab, 2008) 85% of parents say they talk to their child regularly about money management. However, 16% report never talking to their children about using money wisely. (Visa, 2008)

  8. So what do teens need to know about personal finance?

  9. Finance Literacy Standards National StandardsJump$tart Coalition • Financial Responsibility & Decision Making • Income & Careers • Planning & Money Management • Credit & Debit • Risk Management & Insurance • Saving & Investing Standards

  10. Financial Literacy Standards Financial Literacy and Education Commission (FLEC)Proposed Core Concepts: • Earning • Spending • Saving • Borrowing • Protecting • National Standards • Social Studies • Math • Business Education • Marketing • Family & Consumer Science • Agribusiness California Economics (Gr 12) Money Math problems Career Technical Education

  11. We Know that Teens Need to Know . . . • Consequences of not managing $$ • Value of planning and living within means • Difference between needs and wants • Rewards of saving $$, growing $$ • Reasons to handle credit responsibly • Tips to be a savvy consumer • Strategies to manage risk of loss (i.e. insurance)

  12. Financial Education Policies Study 2009Examine the relationship between exposure to varying state mandates and student capability Formal education plays a significant role in financial knowledge, which in turn affects financial behavior. Having standards was key tipping point for financial knowledge Financial behaviors of college students vary by state policy on financial education Social and transactional learning contribute to students’ financial experiences Financial Capabilities of College Students from States with Varying Financial Education Policies, University of Florida, 2009

  13. National Study - Teachers’ Capacity to Teach Examine preparedness of educators who teach personal finance 80% of states have adopted PF standards or guidelines 89% teachers agree/strongly agree on FL graduation requirement 29.7% of teachers were teaching financial education 37% of K-12 teachers had taken college course in PF 11.6% of K-12 teachers had taken workshop on teaching PF < 20% of teachers reported feeling very competency to teach any of the six personal finance topics surveyed Teachers’ Background & Capacity to Teach Personal Finance, University of Wisconsin-Madison, 2010

  14. Where can teachers find resources to teach personal finance?

  15. California Jump$tart Coalitionhttp://www.cajumpstart.org/ California Resources National Jump$tart link National Clearinghouse

  16. Best Practices for PF Materials “Classroom-worthy” Non-commercial Aligned to standards User-friendly Age appropriate Accurate & current Available Measureable

  17. How can financial literacy be integrated into instruction?

  18. Curriculum Decisions • Establish specific program goals • Specify learning outcomes and expectations • Decide criteria for learning materials • Accurate? Up to date? • Aligned with organization mission and values? • Investigate existing materials rather thanre-invent the wheel! • Customize material to audience needs, skills, experience, and knowledge

  19. Financial Literacy Topics With every person you teach these concepts to, you will be changing lives. Income & Careers Planning & Money Management Credit &Debt Financial Responsibility & Decision Making Saving & Investment Risk Mgmt/Insurance

  20. Decide on a Instructional Model Partnership Model • Guest speakers and presenters • Topical workshops & seminars • Connect with financial experts • Resources Corporate Sponsors Federal Reserve Junior Achievement Cooperative Extension Services

  21. Decide on a Instructional Model (cont.) Full-Scale Financial Education Program • Dedicated course • Modules within existing course • After-school program Jump$tart.org/Clearinghouse Council on Economic Education TCAI Family Economics & Financial Education NEFE High School Financial Planning Program

  22. Personal Coaching • Model behaviors • Share lessons learned • Advocate for setting goals, planning, saving • Point out realities • Discuss “what if” scenarios • Monitor progress & gently refocus

  23. Financial Literacy Success Increase your own knowledge Use standards as guidelines Make learning relevant Align with previous and next experiences Connect with the “experts”

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