Financial illiteracy—to rephrase the old saying about New England weather—is something lots of people complain about, but public schools do very little to remedy.
A bill before the Massachusetts Legislature co-sponsored by Jamaica Plain’s Sen. Sonia Chang-Díaz would change that, making training in managing personal finances a required part of Massachusetts public education, K-12. “An Act Relative to Financial Literacy in Schools” was reported positively out of the Joint Education Committee Chang-Díaz chairs in July 2011.
The Senate voted unanimously in favor of it in the 2009-2010 session, but the House of Representatives never got a chance to vote on it. Unfortunately, the bill was sent to the Ways and Means Committee in 2011 and hasn’t come out.
JP’s situation exemplifies the well-intentioned but haphazard presentation of financial literacy training most everywhere now.
Juniors at English High School had four sessions of money management classes taught by volunteers from the M. Ellen Carpenter Financial Literacy Program of the Boston Bar Association in spring semesters from 2009 through 2011 in cooperation with the U.S. Bankruptcy Court, District of Massachusetts. Each year, the Carpenter program holds classes in seven public high schools in the state where math teachers request their services.
It wasn’t offered at English High in 2012. No one knows yet about 2013. Financial literacy is not an official part of the curriculum of the Boston Public Schools.
Some young people get training about their finances out of school, including from Bottom Line and ABCD. Other programs, such as the Family Prosperity Initiative sponsored by the Jamaica Plain Neighborhood Development Corporation, offer much-needed literacy training for adults who did not get it in school.
A report issued by federal Government Accountability Office (GAO) in July is titled, “Financial Literacy: Overlap of Programs Suggests There May Be Opportunities for Consolidation.” The report says more than $200 million in federal funds were spent on a range of financial literacy efforts and materials in 2010 “spread out across multiple agencies and programs.”
Everyone seems to agree that the public needs to understand personal finances better than they did before the economic crisis of 2008. How many times have you heard someone say they didn’t use the algebra they learned in high school much, but they could have used more information about managing their money?
The GAO report says, “Financial literacy…plays an important role in helping to ensure the financial health and stability of individuals and families.”
In June 2009, the Asset Development Commission of Massachusetts released a report recommending that the Legislature implement financial education in schools to better prepare youth for making good financial decisions in the future. Thirteen other states now require it.
It isn’t rocket science, brain surgery or even high school calculus. In the next session, the Legislature needs to quickly figure that setting standards for and requiring financial literacy training in schools will add up to having a population that is better prepared to manage their lives than ever before. Then they should vote for it.