Money 101 finds niche in schools
By Mindy Fetterman
USA Today
Lee Melchionni, 21, plays basketball for Duke University, like his father, Gary, did.
Anne Ryan • USA Today
His uncle, Bill, played basketball for Villanova, the Philadelphia 76ers and the Nets when they were in New York.
Classes run by Don Zabelin, a consumer education teacher at Community High School in West Chicago, drill students in everything from writing a check to buying stocks on margin.
But Lee, a junior majoring in economics, isn't counting on basketball to pay his rent for life.
"My athletic times are getting shorter," he says. "I'm definitely thinking about opportunities for the future."
Melchionni is one of about 500 student-athletes across the country who have participated in a series of seminars co-sponsored by the NCAA and The Hartford Financial Services Group. They are aimed at teaching the basics of managing money. Good thing, too. More than one-third of 1,000 NCAA athletes surveyed said they expect to be millionaires.
The seminars are part of a growing movement toward personal financial education on college campuses and in high schools.
With talk of an "ownership" society and the possibility that young people may have more control over their Social Security through personal retirement accounts, the question is: Are the kids ready? Probably not.
"How are people going to plan for their own retirements when our surveys show that 40 percent of adults don't know what an annuity is?" asks Robert Duvall, president of the National Council on Economic Education, which lobbies states to include personal finance and economics in grades K-12. (An annuity is a contract that promises to pay you a certain amount of money every year for a large initial investment. If you die before the annuity's term is up, you lose whatever is left. If you live longer than your money holds out, the insurance company still has to keep paying you.)
Do you think a college kid knows that?
Some states now require students to take economics and/or personal financial planning courses to graduate from high school. Seven states require a personal finance course — up from four in 2002, according to the council.
Fifteen states require economics, up from 13 in 1998.
Most kids start college or go to work after high school with only rudimentary understanding of things such as savings accounts, credit cards, the stock market, saving for retirement or getting a car loan. "We all know young people are getting inundated with credit card offers at college," says Joanne Dempsey, president of the Illinois Council on Economic Education. "It's 'Get a free T-shirt! Sign on the line!' You can spend $2,000 without realizing someone has to pay for all this."
When Donald Zabelin, who teaches consumer education at Community High School in West Chicago, asks juniors and seniors about money matters, he gets blank stares.
"They really don't know much," he says. "A handful may pick something up from their parents. But for most families, money is a topic that can be put aside because there are more important things to talk about."
Patricia Tomich agrees. Her students at Notre Dame High School for Girls in Chicago come from working-class families, many of whom "live paycheck to paycheck," she says. "We give them confidence as young women to go out in the world and say, 'I'm not just going to spend, spend, spend.' "
Zabelin and Tomich teach everything from how to write a check to concepts such as investing in the stock market and buying stocks on margin.
Financial education should begin in elementary school, says Kathy Floyd, executive director of the Stock Market Game for the Foundation for Investor Education.
"If students don't have parents who have a history of understanding these things, and you just hand them (retirement) accounts, they are going to be lost," she says. "Completely lost."
