Bills filed in the Florida House and Senate would require high school students to take a one-semester financial literacy course. But with just three weeks left in the legislative session, the proposals (House bill 29 and Senate bill 92) haven’t been discussed by committees.
Now, there’s another option in the Florida Senate to get the class into high schools if the legislative proposals fail. An alternative is now part of the Senate budget plan for the state starting in July. It would create a required financial literacy pilot project in Broward County schools and a grant program that would enable other districts to participate.
A survey by the National Foundation for Credit Counseling finds about three-quarters of Americans think they would benefit from professional help with their everyday finances.
Criminology major Justin Buis, a junior at Florida State University, has friends who could use the help.
“They have a certain amount of money for a semester and by the time the semester is halfway through, all their money is gone,” Buis says. “They’re living on gas station food or ramen noodles because they don’t know how to manage their money.
Buis says he probably would have been a lot like his friends – except that his mom is a banker who taught him well. “As soon as I turned 18, I got my own bank account. I made my own money through my job. Because of that guidance I did have, it helps me and I’m able to not have to worry about money 24/7.”
A coalition of business groups held a news conference in Tallahassee before the start of the legislative session. They asked Chiles High School senior Lani Page to explain why students need a financial literacy course.
“It would teach us how to do basic adult things – pay bills, balance a checkbook or a budget, and to build credit and to look like manageable adults,” Page said.
Financial literacy is now included in high school economics classes. For that reason, not everyone thinks a separate course is necessary. Education leaders have complained that creating another required course leaves less opportunity for students to take electives.
But Page told reporters she didn’t learn anything about managing her money from the little bit of information in her economics class.
“I’m not prepared at all,” she said. “I as well as my other peers have no idea how to enter these next few months as college students and as adults.”
Before the financial literacy component was added to economics classes last year, business owner Christy Crump volunteered through the Tallahassee Chamber of Commerce to teach students how to handle money. She visited a high school class once a week for 6 weeks teaching concepts like income vs expenses, retirement planning and investing. The most common questions she got were about income tax.
“Why do we have to pay it, why do some people have to pay more than others, and some people get money back and others have to pay in? The second thing that seemed to weigh on their mind was when we talked about the need to save money,” Crump says. “Even saving as little as $5 per week seemed like something they couldn’t fathom.”
Crump quickly figured out why so many young people are getting into trouble with debt.
“What I started hearing as they got comfortable with me is that many of their parents didn’t have this knowledge,” Crump says, “because they would come back in the next week and say I told my mom what you said last week and she didn’t know that she was supposed to be doing that.”
Florida Council on Economic Education Chairman Geoff Simon agrees that many parents can’t teach their kids about money because they never learned themselves. He says look no further than the recent recession.
“There’s no question that the financial crisis that we’ve just gone through is a result of people being financially illiterate. They had no idea the risks they were taking. They had no idea of the debt they were taking on, and it all came crashing down at once,” Simon says. “If people had been financially literate, I don’t think we would have had this crisis.”
Last year, Florida became the first state to adopt standards for financial literacy set by the Council on Economic Education. The nonprofit provides educational programs for young people and teachers.
For every high school senior who graduates with an understanding of financial basics, the council says another leaves completely unprepared to handle real world finances. As a result, college graduates are leaving school with an average of $30,000 in student loan and credit card debt.
Pat Curran, an economics teacher at Terry Parker High School in Jacksonville, says his students want more personal finance advice.
“I ask them how many of them know a person who’s gotten themselves in trouble with credit cards. 70 to 80 percent of the hands in the room go up,” Curran says. “The problem with the current course is there are so many standards in such a short time, it’s difficult to do them justice.”