Editorial: Smarten up and teach students financial literacy  


Published: 11/30/2018 8:08:00 AM

Once a year, much hullabaloo is made of the unveiling of MCAS results statewide, and school districts in Hampshire County have a right to be proud of the way many of their students perform on the standardized test each year.

Yet many of those same students — both in the Valley, state and across the country — are, put simply, financial illiterate. Research shows that as little as 7 percent of high school students can be considered financially literate. This is not their fault.

Massachusetts is one of 12 states across the country that does not require schools to offer financial education courses to students, according to a 2015 Massachusetts report on financial literacy. Other numbers are alarming. According to the Council for Economic Education’s 2018 Survey of the States, only 17 states require high school students to take a class in personal finance.

And then there’s this — Massachusetts received an F grade from the Champlain College’s Center for Financial Literacy, which in 2017 surveyed states’ effectiveness at producing financially literate high school graduates.

These are vital, real-life skills that we should be committing more resources to passing onto the next generation through education: budgeting, banking, credit use and consumer education, to name a few.

The problem of financial education is not lost on the Legislature, whose members have considered many proposed bills over the years. The Senate passed one such promising bill earlier this year — now stuck in committee — that would require the state to develop and allow cities and towns to institute a financial literacy program to K-12 students. The topics covered would include understanding banking and financial services, loans, interest, credit cards, online commerce, renting or buying a home, balancing a checkbook, state and federal taxes, and charitable giving.

While we wait for the Legislature to act, however, we are thankful that organizations such as Springfield-based Junior Achievement of Western Massachusetts are taking steps to boost the financial smarts of today’s students — in many cases, it should be noted, with funding from the state.

Earlier this month, the Springfield organization turned the MassMutual Center in downtown Springfield into a giant mock New York Stock Exchange. Then it invited students — who have been doing stock market simulations, researching various companies and learning the basics of the stock market in accounting and business classes and after school — from throughout the region to compete.

This hands-on simulation, which JAWM has put on for a decade, aims to teach young people about finance; in this case, the stock market. As reporter Greta Jochem reported in last week’s Classroom section, the 134-team competition, which Northampton High School won for the second straight year, resembled the frantic nature of the real thing in New York, with screaming stock brokers reacting to the news of the day, deciding when to buy and sell stocks in time limits.

The event is one of many sponsored by JAWM that focuses on high school students. At Northampton High last spring, for example, juniors got to play a demo of just what their post-school life might be like at the school’s first Teenage Reality Fair, an event paid for by a state grant.

Participants were tasked with managing the financial life of a 25-year-old who is no longer in school. They were randomly assigned credit scores and picked careers. Students then had to visit different booths around the gym staffed by professionals from throughout the region, where they made decisions about food, clothes, housing and transportation — evaluating how those decisions matched the reality of their financial lives.

These events are great examples of getting ready for the “real world,” and schools should look to host more of them.

The state should get credit for funding these kinds of financial education fairs at high schools through its Financial Education Innovation funding program, which emerged out of a special task force on financial literacy spearheaded by Treasurer Deb Goldberg.

Many of the task force’s recommendations at improving financial literacy for K-12 students and adults alike are producing results for Massachusetts residents. But it’s not enough. As the task force summarized in its 2015 report: “High school students entering adulthood are a particularly important population, as many of the financial behaviors they adopt will likely stay with them throughout their life.”

Let’s hope the Legislature and school officials get more aggressive at offering these skills to students — soon.


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