OK, it’s time to review our financial literacy quiz.
Actually, it’s an old quiz, given last year by a group called Jump$tart Coalition for Personal Financial Literacy. The Washington-based nonprofit wanted to check high school students’ readiness to tackle money issues. The results were scary.
Of 31 questions on personal finance, the average score was 48.3 percent. That’s a failing grade in school and a costly one in money matters. Let’s drill down a bit.
One question asked about a thief who steals your credit card and runs up $1,000 in charges. Only 13 percent of those tested knew that if you report the theft right away, the maximum amount you have to pay is $50.
Another question dealt with students covered by their parents’ work-sponsored health insurance. Sixty percent of the students did not know that, if their parents lost their jobs, the students’ coverage could disappear along with their parents’ insurance.
Maine law includes no requirement that financial literacy be part of a school curriculum. It may be taught as an elective. That means instruction on money matters is left largely to groups that must compete for the attention of young people in an increasingly hectic world.
The Maine Jump$tart Coalition surveyed administrative school units in 2009. Of the 65 that responded, 48 percent reported some financial education. But in more than 40 percent of those schools, fewer than 10 percent of students received such instruction.
According to survey respondents, major obstacles were available course time and curriculum. A committee has been set up to study which schools offer financial literacy, what courses cover and what the best practices are. The committee welcomes comments from teachers.
We’ve noted the role of Maine’s Bureau of Consumer Credit Protection in promoting financial literacy. “We talk to many high school seniors or new graduates who are legally able to sign a contract to purchase a car on credit, but who have no idea how difficult it will be to make payments on time for four or five years,” said Will Lund, bureau superintendent.
He said they also don’t know they might lose both the car and points on their credit scores, if they can’t keep up payments.
Lund supports financial education at all levels but urges caution when setting up a curriculum.
“Educational materials produced or underwritten by lenders tend to focus on ‘responsible use of credit’ as opposed to promoting the old-fashioned idea of saving,” Lund said. Such direction might be akin to the gambling promoter’s urging to “play responsibly.”
Lund said the key is getting past the one-shot presentation at a school assembly; he — and we — would like to see financial literacy taught in appropriate ways in every grade.
The nonprofit Institute for Financial Literacy, based in Portland, also is working on the issue. The institute promotes savvy dollar sense for people of any age. Its Teachers Take FLITE — Financial Literacy Instructional Techniques for Educators — program helps kindergarten through 12th-grade teachers find the best materials and methods for their students. Scholarships are available for interested teachers at www.financiallit.org.
Others promoting financial literacy include Cooperative Extension, Junior Achievement and a number of civic groups. You can help by showing an interest in helping young people learn to be smart with their money. Some guidance from a concerned adult might be the best lesson of all.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or go to http://necontact.wordpress.com.