The school newsmagazine of Kettering Fairmont High School.

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Teens’ financial woes prompt state, schools to act

By Kevin O'Donnell, Academics/Administration Editor

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When most students imagine literacy, they think about being able to read a book. Most students are also literate in basic math, and some are even literate in advanced calculus. But starting with the Class of 2014, none of these things will help students graduate if they aren’t financially literate.  

The state of Ohio has mandated that all high school students graduate with a knowledge of basic financial skills.

“Ohio legislators felt a need to make sure the schools are teaching sound financial principles to our kids so that when they’re out there working, they know about things like savings accounts, interest and credit card debt,” said Fairmont Principal Dan VonHandorf.  “Those things are important for our kids to know. The bill is a reaction to where we are financially as a country.”

Bringing financial literacy to Fairmont

According to VonHandorf, the state has established fairly loose guidelines for providing the core requirement. Fairmont plans to incorporate the curriculum into two classes: Planning for College and Work and Career Exploration. This will reach all students as sophomores must take one of these courses. This also means students won’t have to struggle to fit another required class into their schedule.

Teresa Phillips-Harris and Kathy Rhoades teach Planning for College and Work and have already incorporated topics like budgeting, savings, interest and investing into their classes to prepare for the mandate. Rhoades feels it’s one of the more important units.

“When you are learning about your career, you want to make sure that you handle your money correctly so that you don’t end up in the boat that many people are in because they handled their money unwisely,” said Rhoades.

Many believe it’s irresponsible money handling that led to the current economic recession. “Because of all the problems they had with pay-day lenders, with the economic meltdown, and people going into debt and having their house foreclosed, the state really wanted to move on teaching financial literacy in high school,” said Career Tech Supervisor Nancy Brown.

The state began this crusade on financial illiteracy in 2006, when Senate Bill 311 established the “Ohio Core,” which VonHandorf says is aimed at increasing academic rigor at the high school level. As well as mandating the financial literacy curriculum, students in the Class of 2014 will need a fourth math credit to graduate.

VonHandorf says that while Fairmont already has been incorporating the financial information into the curriculum, it won’t be a requirement for two years. Brown said Planning for College and Work and Career Exploration will be “less exemptible” with the new mandate. “There has to be some accountability that the student actually took this course,” she said.

FHS already offers essential financial education

Though only those graduating in 2014 and later need the course to graduate, students looking for an extra edge in money matters or simply an understanding of financing can find what they want in several classes offered at Fairmont.

VonHandorf said Fairmont already has classes that teach students essential financial skills. “Financial Literacy is a great class to teach kids all of those skills that the state is now requiring. We’ve been teaching that for a long time here.”

Matt Hughes has been teaching the Financial Literacy course for a year. His course covers the basic points that the state will soon require.

“We focus on money management at the beginning, and we talk about what you get paid, your benefits, how taxes get taken out and how to calculate those things. After that, we talk about taxes and transition into budgets, checking accounts, saving accounts and investing. We talk about credit and career planning, and we will get into some risk management,” Hughes said.

In his class, students do checking account simulations and a mock stock market in which they pick their own stocks.

Senior Adam Thompson says it is a fantastic class. “Now I feel way more comfortable when it comes to writing checks and investing money and making smart decisions on spending, whether it’s with food, appliances, a car or whatever,” said Thompson.

Hughes has also seen promising results in his class. “I think a lot of them truly benefit from it, especially the seniors,” Hughes said.  Still, only about 100 teens take this course per year.

A response to a larger problem

In 2006, a study by Jump$tart Coalition for Financial Literacy found that only about 17 percent of high school seniors in the U.S. had taken a money management or personal finance class. In 2008, more than 46,000 high school seniors participated in the National Financial Literacy Challenge, a 35-question test of personal finance. The average score of the participants: 56 percent.

College students did slightly better on the test, but other studies have turned up a curious kryptonite for college kids: credit cards. A Sally Mae study found that half of its test subjects racked up $5,000 in credit card debt while in school, while one-third had more than $10,000. Some credit cards have interest rates over 20 percent. “That’s where people get into big trouble,” said VonHandorf.

Rhoades feels that credit is the great downfall. “I get really fired up when I talk about credit in class. People are charging but not paying back. But many don’t know that if you pay things back in full on your charge card at the end of the month, you don’t have to pay any interest,” she said.

Many feel that young people getting out of high school and college are not prepared to take on the financial responsibilities that come with independence. Some even point to the lack of knowledge about money matters as a reason for America’s current economic situation. “Twenty-five-year-olds and younger are going bankrupt,” said Rhoades. “They’re looking at that as an easy option and it’s not. It’s a severe option that’s hard on them and the economy.”

Hughes believes it’s vital to have financial education at an early age so that people don’t get bogged down in debt. It seems that most educators feel that financial education will make a difference, and Rhoades says every bit helps.

Fairmont High School has been ahead of the game by implementing financial literacy into the curriculum, but Phillips-Harris believes it doesn’t stop there. She is helping to create an online class that she calls “an advanced course for financial literacy,” that should be available in two years.

Will Ohio’s call for financial education improve the economic well-being of the state’s youth? To some it looks like the best way.

“I think it’s a good thing for our kids,” said VonHandorf. “We all have to be financially literate to be positive members of our community. This is just a way to make sure all of our kids get the curriculum before they get out of high school.”

Thompson says some kids really need a class like this. “They can go through life and eventually it will hit them. I’m almost 18 – soon I’ll be living on my own two feet.”

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The school newsmagazine of Kettering Fairmont High School.
Teens’ financial woes prompt state, schools to act