PHIL HARDWICK — Financial literacy makes better schools and communities

Phil Hardwick

Phil Hardwick

I love Junior Achievement. Too bad it’s no longer around.
Once upon a time I was a Junior Achievement volunteer, a business person who went into elementary schools and presented a program about work-readiness, entrepreneurship and financial literacy.

Trained by Junior Achievement of Mississippi and equipped with some excellent instructional materials, I, like dozens of other volunteers, would go into classrooms and engage the students in the concepts of business. We would begin with selecting a product or a service, and then come up with a marketing plan, a budget and a strategy. The students loved it. One of my favorite sessions was always near the end of the course when, in our fictional case study, the students learned that the sales income was just the beginning of learning about finances. There were expenses to pay. You should have seen the expression on their faces when they learned that they had to pay taxes to the government. “But that’s our money,” they would say.
Junior Achievement was a great program to teach kids in Mississippi about financial literacy and running a business. Sadly, Junior Achievement of Mississippi was dissolved in 2009 because of — ironically — financial difficulties. It pains me to look at the map of the United States on the national Junior Achievement website and see local chapters in just about every state in Mississippi.
State Treasurer Lynn Fitch is pushing for required financial literacy courses in Mississippi public schools. Last year, she pushed for legislation to make training in such financial basics as household budgeting, writing checks, balancing checkbooks and understanding credit card interest mandatory in public schools. Some schools offer such courses as an elective, but very few students are enrolling.
Perhaps that has something to do with Mississippi leading the nation in payday loan shops and credit card payment delinquencies.
In 2010 the National Financial Capability Study, conducted by the FINRA Investor Education Foundation, released a survey about howAmericans manage their resources and make financial decisions. The State-by-State Financial Capability Survey, which surveyed more than 28,000 respondents, was developed in consultation with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy. Mississippi did not do very well in the survey. Here’s a snapshot of some of the results:
» One in five households in America spent more than they took in over the past year. The figure was 23 percent in Mississippi.
» In Mississippi, 66 percent of respondents reported they had no emergency funds in case of job loss, sickness or injury, compared to 60 percent nationwide.
» 36 percent of people in Mississippi reported taking part in non-bank borrowing, such as taking out payday loans, which often have higher interest rates, compared to 24 percent nationwide.
» Mississippi residents on average correctly answered 2.9 of five financial literacy questions, slightly below the national average of three.
» About 60 percent of Mississippi residents said they comparison shopped for credit cards, slightly less than the national average of 62 percent.
There are other programs in Mississippi that stress the importance of financial literacy. The Mississippi Council on Economic Education sponsors no less that eight programs that deal with the subject in some form or fashion. It even offers certification for teachers, stock market challenges and other contests to encourage participation.
One of the more impactful programs I have come across is something known as Reality Fairs, which last only one day. Although Reality Fairs require a lot of preparation, they offer an eye-opening experience for the students. Prior to the Reality Fair, students learn about various professions or occupations that are in “the real world.” They then learn about the jobs that are available in their town or region.

That sets the stage for them knowing what they might earn if they landed such a job. Next they are given a sheet for them to calculate their household expenses as if they were out of school and working in that job. Then they attend the Reality Fair, which typically lasts 90 minutes and is held in the gym or some other wide open space where booths can be set up. At the booths are local business representatives who tell the students what the expenses would be for their particular situation. For example, a student decides that he or she wants to own a $40,000 pickup truck. A local automobile dealer would reveal what the down payment and monthly payment would be for such a vehicle. Or maybe the student desires to live in a $700 per month apartment. The local utility company representative would estimate the utility cost for such a dwelling. At the close of the Reality Fair, most students come away realizing that what they will earn usually does not pay for what they have to spend for such a lifestyle.
What I like about all of the above programs is that in addition to teaching about financial literacy they involve members of the community. Although there are unique schools producing career-ready students in poor communities, in general, schools are a reflection of their communities. That is why school/community partnerships are so important.
More information about the above programs can be found at the following websites:
Junior Achievement – www.juniorchievement.org
Mississippi Council on Economic Education – www.mcee.org
Reality Fairs — www.scholastic.com/teachers/top-teaching/2011/05/host-reality-fair

» Phil Hardwick is coordinator of capacity development at the John C. Stennis Institute of Government. Pease contact Hardwick at phil@philhardwick.com

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One Response to “PHIL HARDWICK — Financial literacy makes better schools and communities”

  1. Julia O'Neal Says:

    John Oliver on HBO–payday loan segment:

    http://www.latimes.com/opinion/opinion-la/la-ol-john-oliver-hbo-payday-loans-sarah-silverman-20140811-story.html

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