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Class teaches financial survival

Published on Press & Sun-Bulletin - Binghamton, N.Y.
Author:    Tokarz, Valerie
Date:    Mar 23, 2008
Start Page:    A.1
Section:    FRONT
Personal finance; Custom design; Business education; Consumer credit

Document Text

Teenagers face many challenges, but one that may not be discussed at school or at home is the challenge of handling their money responsibly.

Nearly half of all high school students nationwide have a part-time job, and that number is growing, according to the University of Memphis Center for Economic Education. But those teens also spend 98 percent of what they earn, and one in three carries at least one credit card, according to Teenage Research Unlimited, a world leader in providing businesses with research on teens, tweens and twenty-somethings.

Out of this comes a disturbing trend: The fastest growing age group for bankruptcies is among people under 25 years old, according to the University of Memphis group's research.

The Jump$tart Coalition for Personal Financial Literacy, a group of organizations that works to promote financial education among youths, says the average student who graduates from high school lacks basic skills in the management of personal financial affairs, including balancing a checkbook and simple principles involving earning, spending, saving and investing.

"Many young people fail in the management of their first consumer credit experience, establish bad financial management habits, and stumble through their lives learning by trial and error," coalition research states.
It is this lack of basic financial skills that drove Barry Ilse, a teacher in the business education department at Vestal Senior High School, to custom design a curriculum for a "personal finance" class. It's a class he has been teaching for five years to very positive reviews from students and parents alike.

"Every student should take a half-year of personal finance," Ilse said. "(We) keep it as practical as possible so students will see the relevance of it."

From Ilse's point of view, everyone will have to handle money in their lifetime, whether they are unskilled workers or professionals. What they all have in common is that they have to pay their bills.

Topics covered in his class include stocks and bonds, aspects of banking (interest, balancing checkbooks, savings accounts, certificates of deposit and money markets), real estate transactions, personal record keeping and income tax reporting.

"We're negligent, as a part of the school system, if we don't teach them this," Ilse said.

Word has spread about Ilse's class, creating a demand for it. This school year, he taught two personal finance classes in the fall and is teaching one class this spring. Each class has more than 20 students and there is a waiting list for others to enroll.

"The class is great. All kids should take something like this," said Donna Boisvert, whose son, Jason, 18, is one of Ilse's students. "I wish I had known all this at his age. He's much smarter about handling his money than we were at his age."
Jason said that before he took the course, he just put his money in the bank.

"Now, I feel more confident to venture into mutual funds, money markets and playing around in the stock market a bit," he said. According to Boisvert, the biggest lesson he learned was "how to better handle my finances - to think through spending instead of just blowing it."

Donna Boisvert said Jason is even giving his parents advice about their investments.

Elective course

According to the Jump$tart Coalition, only three states - Utah, Missouri and Tennessee - require a one-semester course devoted to personal finance. And there are 14 states that require some sort of financial instruction incorporated into other subject matter, but fall short of making personal finance a required course. New York is one of those 14 states, mandating high school students to take a half-unit of credit in economics.
In 1991, the Secretary's Commission on Achieving Necessary Skills (SCANS) set out to determine which skills are necessary for youths to succeed in the working world. As a result of the commission's findings, the New York State Education Department integrated some personal finance instruction into the required economics curriculum.

But Laura Levine, executive director of the Jump$tart Coalition, thinks states should go a step further.
"I hope that more state education departments and state governments move financial literacy to the top of the priority list," she said.

A course dedicated exclusively to personal finance is still an elective in New York state, and because there is no set curriculum for electives, Ilse tailored a 20-week course to cover major financial topics through resources provided by local credit unions, Binghamton University, and the National Endowment for Financial Education.
He said his students' favorite part of the class is the mutual fund competition he holds each semester. Students are given a fictitious amount of money in which to invest in a mutual fund. They each pick a fund and track its progress. At the end of the course, the performance winner receives a $10 gift certificate and the runner-up gets a $5 bill.

Ally Abrams, a Vestal junior, took the class last semester because she had heard about it from other students and thought it would help her prepare for college. Abrams believes she saves more money now than before she took the class. Learning how investing works was the greatest part, she said.

"I didn't know any of this," she said. "With the whole economic crisis right now, I feel like I understand it better because of the class."

Senior Andrew Gasper, a former student of Ilse's, said he took the personal finance class because his parents encouraged him to. Now, he's glad he did. He currently works about 12 hours a week and after taking the class, he is looking into putting his savings into money market funds to earn better interest.

"I learned how to fill out tax forms, about Roth IRAs, sound investments and financial security. Everyone should take it," he stressed. "It teaches you how to help yourself financially in life."

Cathy Gasper, Andrew's mother, believes it is "beneficial for today's students to understand how to manage their money, especially when it comes to credit. And now," she added, "Andrew is more interested in what he can do with his money."

Binghamton High School offers a similar course, "Career and Financial Management."

Whereas Vestal's class is a half-year course, Binghamton's class runs for a full school year. There are 23 students currently enrolled.

Roland Smilnak, a teacher in the business education department, said Binghamton's class covers basic business principles, including personal finance. Students learn budgeting, how to handle a checkbook, job interview skills and general economics.

Smilnak said his class spends a lot of time covering credit - what it means to receive a poor credit rating, how to handle credit cards, and how to keep in good credit standing. What Smilnak sees as the most important byproduct of his class is that students would go out into the world as "productive citizens - working, paying taxes, contributing to the economy."

Albert Penna, BHS principal, said the high school has a long-standing tradition of offering many courses in the business education department.

"It is the administration's core belief that business education is critical to students functioning in a global economy and the 21st century," Penna said. "The administration is also trying to validate all of its business courses and to encourage students to major in business administration in post-secondary schools."

Penna said preparing youths for life in a global economy is so critical that the school's guidance counselors recruit students to take a variety of business classes as electives. Additionally, the school has increased its instructional day from eight periods to nine to give students plenty of opportunity to take advantage of all the courses provided.

Even local banking institutions are seeking to address the gap in financial literacy among the area's youths. Several local credit unions are striving for ways to educate teenagers about banking and money management through seminars, resources, and their Web sites. One such offering is by Horizons Federal Credit Union, which is holding a Teen Finance Workshop this month. Teens will learn about savings and checking accounts, credit cards, loans and positive money management.

Ben Colas, a junior at Vestal High, recently completed Ilse's personal finance class. His three older brothers also took the class and told him it was a "must-take" course. He said the most important thing he learned was "being wise with my money and learning to take advantage of ways to handle it efficiently" by using interest to make his money work for him.

When asked how a personal finance class has changed his view on handling money, Colas said, "Think before you spend. Don't act on impulse. Plan for the future."

As far as making a money-management course a state requirement, Jason Boisvert said students already have a heavy workload; however, he feels the class would be extremely beneficial to all who would take it.

Outside of taking this course, Boisvert said, "no one teaches you this."