The buck stops here, CDA School District developing expanded financial education for students

By MARC STEWART

Coeur d’Alene Press

The kids are going to be alright.

State mandated financial education is working, said Paul Golden, spokesman for National Endowment for Financial Education.

“Idaho is at the forefront of what other states should be doing,” Golden said. “Financial education and personal finance are critically important.”

He points to an April 2015 study, conducted by Dr. Carly Urban of Montana State University and researchers from the Federal Reserve Board and the Center for Financial Security at the University of Wisconsin-Madison. The study looked at states with mandated financial education for high school students and documented notable improvements in credit outcomes for young adults who were exposed to rigorous programs.

The study found that after Georgia, Texas, and Idaho implemented required financial education in 2000, there were significant increased credit scores, and young adults had lower delinquency rates on credit accounts.

Idaho’s young adult credit scores jumped by 16 points.

“Learning how to manage money early and knowing the difference between delayed gratification and immediate satisfaction of needs and wants are topics stressed daily,” said Lake City High School Teacher Russ Blank, who teaches two sections of personal finance. “The saying goes, ‘Most people don’t plan to fail, they just fail to plan.’”

Golden said teaching students about personal finance should start early and be repeated in the classroom and at home.

“Parents have the most influence on kids,” he said. “I recommend parents have regular conversations, not lectures with teenagers. Being a good role model is very important in learning good behavior.”

Locally, there is an effort to expand financial education. Numerica Credit Union is working with the Coeur d’Alene School District to develop more lessons that will help prepare students for the real world. Coeur d'Alene School District Curriculum Director Mike Nelson said the district is looking to add more depth to its economics classes.

“The nice part is that Numerica already has the materials developed for personal finance literacy,” Nelson said. “They have a lot of great resources they can share with us. And it’s at no cost to the district.”

“It’s expanding what is already required by the district and the state for graduation,” he said. “We want to broaden personal financial literacy.”

Currently, Numerica is offering financial education courses in schools across Eastern Washington and North Idaho. The program will be integrated into the Coeur d’Alene School District high school senior economic classes, starting in early 2016.

Katie Scofield, a communications specialist with Numerica Credit Union, teaches financial education to elementary and high school students, said kids today are very interested in the topic.

“Finances seem to be one of those taboo subjects for families,” she said. “If parents do talk about money with their kids it’s saying things like, “Don’t get a credit card” or “Save your money.” However, there is often not a WHY behind what they are telling them. Numerica partnering with teachers offers a way to help our students learn valuable, real life skills and have the conversation about how to accomplish their goals.”

Scofield says kids are keenly aware of mistakes previous generations have made.

“Through the downfall in the economy, teens especially have a new outlook on managing money,” Scofield said. “Many have watched their parents struggle and so they have a desire to not fall into the same cycle. Teens and youth really crave someone to explain how things work, so they can be informed and be active participants in their own financial well-being. “

Before the new materials get into classrooms, parents can share these suggestions with their teenagers.  

1. Not all plastic is fantastic

While plastic cards may look similar, there is a big difference between credit cards and debit cards.  Debit cards are connected to your checking account and have a fundamental truth about them — when you run out of money, you can’t buy anymore stuff.

Credit cards on the other hand allow you to borrow money from the lender and they too have an inescapable truth about them — you have to pay that money back with interest.

2. Common cents about credit cards.

It’s a loan. Know your limits. Sorry boys and girls, credit cards do have a maximum amount you can borrow. Understand what your interest rate is and calculate how long it’s going to take to pay it back. Make your payments on time. If you’re late paying your bill, they won’t send Vin Diesel after you, but those late payments can quickly add up with expensive fees, hurt your credit score (more on that later) and possibly cause your interest rate to rise.

3. Be a budget ninja

Your friends may be furious swipers going out to eat or buying new outfits without a care in the world— but be cool with creating a budget and sticking to it. When they’re out of money, you’ll be smiling.

There are so many ways to keep track of your budget, including online banking tools for your tablet or smartphone.  It’s important to track your spending and how much money is coming in from allowances, jobs or that sweet Christmas money.

4. Score one for the home team!

Every dollar you spend or borrow has the potential to impact your credit score. Think of it like life’s GPA. You want a great credit score to buy a car or a house someday. Cars and houses are super expensive and most people need to borrow the money to do it.  A bad credit score can damage your ability to make big purchases, and it can even hurt your chances of getting the job you always wanted. Credit scores reflect how responsible you are and whether you deliver on your promises.  

5. Wanna be working when in your 70s?

Uh, no thanks. In order to retire before your teeth fall out — start saving now.  There are lots of great ways to save: traditional savings accounts, 401(k) plans, IRAs, certificates of deposit.  Your financial institution will have options for you. Think about your goals and what you want to accomplish. Don’t keep your money in a piggy bank.

6. Facing the real world.

So you want to move out and get your own place? Can you afford it? What’s a security deposit? What do potential landlords mean when they say “first and last”? Living away from your parents costs money — a lot of money. It means you need to have a job or some source of income. If you’re renting an apartment or home, you’re likely to have your credit score checked by the landlord as part of an application fee. If your score is good enough, the next step is the security deposit, usually hundreds of dollars. This deposit is for damages you or your friends or animals might cause during your stay. Also, the landlord might require you to pay the first month’s rent and last month’s rent in advance. They do this to protect themselves from people skipping out without paying.

*Educators looking for curriculum help feel free to ask Katie Scofield at kscofield@numericacu.com

Marc Stewart is the Director of Sponsored Content for the Coeur d’Alene Press. He can be reached at mstewart@cdapress.com or 208-664-8176, ext. 2011