Educators Need Support in Teaching Financial Literacy to Students, Report Reveals
Posted By Terri Williams on April 29, 2016 at 11:44 am
Many students enter their college years without a strong, financial literacy background – in fact, a recent GoodCall article revealed that many college students are failing at financial literacy. Learning the importance of making wise financial decisions – earlier rather than later – can help students avoid monetary blunders that can haunt them for years to come.
PricewaterhouseCoopers (PwC) has committed $190 million to increasing financial literacy, and recently released a report, “Bridging the Financial Literacy Gap: Empowering teachers to support the next generation,” which details the critical need to educate students at a young age, both at school and at home. Below are excerpts from the report, and a Q&A with Shannon Schuyler, principal, chief purpose office and corporate responsibility leader at PricewaterhouseCoopers, and president of the PwC Charitable Foundation.
The state of financial education in the U.S. today
PwC’s research reveals 10 trends among educators:
- Teachers don’t feel comfortable teaching financial education.
- Few K-12 teachers incorporated financial education into their classroom.
- Four primary barriers exist: lack of appropriate curriculum, qualifications, take-home materials, isn’t viewed as a critical skill for college and career readiness.
- Teachers want more support.
- Teachers seek resources on their own.
- Financial education should start earlier.
- Teachers worry parents/guardians aren’t doing their part.
- Millennial educators are champions of financial education.
- Millennial educators are better at seeking funds than their more experienced colleagues.
- Educators cite tremendous benefits in providing financial education to young people.
Who should be responsible for teaching financial literacy?
95% of teachers believe some financial literacy should happen at home:
|49%||Primarily at home, and supported by classroom instruction|
|43%||Primarily through classroom instruction and supported by parents/at home|
|3%||By parents/guardians at home exclusively|
|3%||Don’t know/none of the above|
|2%||Through classroom instruction exclusively|
How likely is it that students receive financial education at home?
65% of teachers doubt that their students receive financial education at home:
|27%||Not likely at all|
|4%||Don’t know/not sure|
Q & A on Financial Literacy Findings by PricewaterhouseCoopers
How critical is financial education at an early age?
Shannon Schuyler: Financial literacy is a fundamental life skill. Developing financial knowledge at an early age is critical to instilling values and behaviors – appreciating the difference between wants and needs – in our children that help them be financially savvy and successful in the future. The groundwork we lay for our children now will motivate a lifetime of smart, responsible financial decisions that will create long-term economic security for them and our communities.
What is the disadvantage of making parents solely responsible for the financial education of their children?
Shannon Schuyler: Many parents don’t talk to their children about money because they themselves aren’t sure they comprehend financial matters like calculating compound interest, choosing stocks, or managing 401K plans. Many millennials now becoming parents demonstrate alarmingly low levels of financial literacy. We can’t assume that all children are seeing smart spending or saving habits in their home.
Why does PwC believe that K-12 teachers are so critical in providing financial literacy?
Shannon Schuyler: We know that teachers are some of the most influential people in our society. Beyond academics, they have the ability to positively affect many aspects of our lives – both as students and as adults. By incorporating financial literacy into their curriculum, teachers can help develop fiscally and socially responsible adults with the skills needed to transition from school to career.
How can teachers be empowered to teach financial literacy?
Shannon Schuyler: Here are some interesting facts: 92 percent of the K-12 educators we surveyed said financial education should be taught in schools, but only 31 percent feel completely comfortable teaching financial concepts, with a large majority saying they need more appropriate curriculum. And 68 percent would like to have take-home financial materials for students to share with their parents.
So how can we better empower teachers? By bolstering their confidence and familiarity with teaching financial lessons and building on those lessons at home.
What does PwC’s commitment to empowering teachers entail?
Shannon Schuyler: As part of our collective efforts to empower educators, we’re focused on addressing these educational gaps by providing curricula, classroom support and take-home materials for parents. This month, we launched a new Earn Your Future Digital Lab — an open access site with videos, animated components and interactive activities for students, and planning and resource guides for teachers. As part of PwC’s five-year, $190 million commitment to financial literacy, we hope to better equip teachers and parents to talk about finances in engaging and relevant scenarios for students . . . it goes a long way.
Experts discuss where to find financial education resources
Cowin Financial Literacy Program
The Cowin Financial Literacy Program was created by Anand R. Marri, Ph.D., a Teachers College, Columbia University professor with a burning desire to put teens and adults on the right path becoming financially savvy.
The Cowin Financial Literacy Program was designed to address several barriers, ranging from the lack of a workable curriculum to the absence of take-home materials. The program is based on Harvard Business School’s case study method. In 2013, The Cowin Financial Literacy Program was rolled out in New York City public high schools, and now it is taught in 47 states – including 17 states in which financial literacy is a requirement for graduating seniors. The curriculum is available to download for free. And, Marri offers the following scenarios and tips to help students in the financial decision-making process:
Tip 1: The earlier you start saving, the faster your savings will grow.
- I’m just starting my career; I have plenty of time to save, right? “Everyone – from a young person starting a first job to a marquis athlete pulling down seven or eight figures a year – needs to have a budget and learn the beauty of compound interest. Even a marquis basketball player with $7 million in the bank needs to save for the day when he retires his jump shot or is permanently sidelined by an injury.”
Tip 2: Before you buy, know more than the sticker price.
- BMW or Buick? I’m buying a car. What do I need to know? “Before making a big purchase, estimate your total cost over time. Research how much it will cost in gas, maintenance, repairs and insurance to keep the car on the road and factor that into how much you can spend.”
Tip 3: Before signing up for a government or private loan, ask how much it will cost over time to repay it with interest.
- Ivy League or State University? “I’ve been accepted to both. How do I choose? In the debit column of a ledger, enter tuition and estimated living and transportation costs for a year. In the income column enter financial aid, any expected earnings, plus the estimated projected earning power of a degree from one vs. the other. Which college offers the best value for your future?”
Tip 4: Know thyself, including your spending patterns.
- Pay cash or charge it? “You’re a freshman in college and offered your first credit card, which charges higher interest than some, plus a $100 annual fee, plus interest if you don’t pay off the entire balance at the end of the month. But it racks up frequent flyer miles every time you use it. Is it worth the extra cost to be able to fly home for free once or twice every year? This depends on how often and where you travel, and whether you would overspend on your rewards card to pay for stuff you don’t need.”
The Boys and Girls Club
John Lewis, senior director, Workforce Development, Program, Training & Youth Development Services of Boys & Girls Clubs of America (BGCA), tells GoodCall, “By the time a student graduates high school and starts their postsecondary path, it’s essential that they have an understanding of the building blocks of financial well-being.”
However, he acknowledges that many students don’t have basic financial information when they leave school. But local BGCAs offer a financial education program, “Money Matters: Make it Count,” that teaches basic financial information.
For 13 years, over 650,000 Club teens have benefitted from this collaboration between BGCA and Charles Schwab Foundation. “From learning how to prioritize spending and budget monthly expenses to opening a savings account and applying for scholarships and grants, graduates of the program are equipped with the knowledge, tools and resources to make positive and informed decisions about their future,” says Lewis.