Ten Tips To Get Your Students Financially Fit
Stanley Breitbard, CPA/PFS
Member, National CPA Financial Literacy Commission Chair Emeritus, California Jump$tart Coalition
1. Educate Them About America’s Financial Crisis
• • • • • Financial literacy is a national problem. It affects every income level and social class. It affects young and old. It’s color blind. It impacts individuals, families, businesses, communities, states and the Federal Government.
Some Startling Statistics
• In 2003, 1.6 million Americans filed for bankruptcy, the highest amount in history (Amer. Bankruptcy Inst.). • 43% of American families spend more than they earn (Federal Reserve). • Americans carry an average credit card debt of more than $8,500 (Motley Fool). • The average American family saw its credit card debt grow by 53% in the 1990s (Demos).
AICPA Poll
• Designed to assess financial planning knowledge and sense of financial security among Americans • Confirmed other national studies showing serious need for financial education
AICPA Roper Poll, May 2004
Percentage who have never heard of key financial terms…
•Income Replacement at Retirement
•ERISA •Reverse Mortgage •Joint/Survivor Annuities •Portfolio Diversification •Compound Interest •401(k) Plans
61%
76% 35% 32% 30% 28% 49%
One in Three Americans In Two-Income Households Don’t Have Financial Contingency Plans Should They Lose One Income
36
61 3
No, do not
Don't Know
Yes, have plan
Not prepared for unexpected major expenses
Asked how they would handle a financial emergency they couldn’t manage on their own, Americans would: o Borrow money from their family (51%) o Sell their house, car, or other thing of value (49%) o File for bankruptcy (24%)
2. Help Students Make the Connection
• 11 % of teens 12-19 have their own credit card; an additional 10% have access to a parent's credit card. (Teenage Research Unlimited) • College students carry an average of three credit cards with a total balance of $2,748. (Nat’l Center for Educ. Stat.) • Children’s spending has increased dramatically. Kids ages 4-12 spent 2.2 billion in 1968, 4.2 billion in 1984, 17.1 billion in 1994, and more than $40 billion in 2002. (Packaged Facts, 2002, “The U.S. Kids Market”)
3. Test Your Students’ Money IQ
• Give them the Jump$tart Personal Financial Survey • Got to www.jumpstart.org and click on Downloads • Tests knowledge of income, money management, saving and investing, spending and credit
A Failing Grade— Average Scores for 4 Surveys
• • • • 1997– 2000– 2002– 2004– 57.3% 51.9% 50.2% 52.3%
Will your students do better?
4. Integrate Financial Literacy into Your Classroom
• 87 percent of college students and 90 percent of high school students rely on their parents for financial guidance. (Capitol One) • Only 26% of 13- to 21-year-olds reported that their parents actively taught them how to manage money. (Jump$tart) • Only 7 states require high school students to complete a course including personal finance before graduating. (NCEE, April 2004, Survey of the States) • Only 9 states require testing in personal finance. (NCEE, April 2004, Survey of the States)
Financial Education Works
• Students who participated in a personal finance game had an average test score of 2% higher than those who did not. (Mandell and Jump$tart) • People who even start thinking about financial planning save twice as much as those who do not. (Consumer Federation)
Personal Finance Clearinghouse
• Jump$tart Personal Finance Clearinghouse offers over 500 personal finance tools for educators. • Materials for grades K-12. • Go to: www.jumpstart.org and click on resources and then Clearinghouse. • Search topic, grade level, type of material, source
Personal Finance Subjects to Add to Coursework
• • • • • • • • • Value of Money Budgets Cash Management Banking Credit and Debt Saving Investing Interest Financial Planning
5. Take Your Students to the 360 Degrees of Financial Literacy Web Site– www.360financialliteracy.org
• 360 Degrees of Financial Literacy is a national effort of the CPA profession to improve the financial understanding of Americans. • CPAs, through local programs across the U.S., are teaching community members about personal finance and money management.
Over 300 Articles
Over 500 FAQs
Over 260 Financial Tools
6. Watch PBS TV Shows with Your Students
• Available on the 360 Web Site • Penny Wise o For middle school students • Business Building Blocks o For high school students
Downloadable programs for middle and high school students
7. Use Presentation Toolkits Available Online– www.aicpa.org/financialliteracy
8. Take Advantage of the Takin’ Care of Business Package
• Easy-to-use tools for teachers to give students a good grounding in understanding financial concepts and how they relate to real-world situations. • Video, teacher’s education handbook and student guides
Performance Measures and Standards
1. Strategic and Critical Thinking 2. Problem Solving and DecisionMaking 3. Decision-Modeling 4. Research and Reporting 5. Technology 6. Team Building 7. Communication
Lessons Plans on Variety of Personal Finance Topics
• • • • • • Financial Statement Analysis Budgeting & Forcasting Break-Even Analysis Financial Planning Time Value of Money The Purpose of Taxation
9. Get Yourself in Good Financial Shape with Financial Smarts for Teachers
• http://www.financialsmarts.ucr.edu/
10. Call Your State CPA Society– Local School Programs Offered Throughout the U.S.
For More Information
E-mail: financialliteracy@aicpa.org
Consumer Web Site: www.360financialliteracy.org
Resource Center: www.aicpa.org/financialliteracy