Personal economics

By MARK NEWMAN Courier staff writer

March 02, 2009 11:22 pm

— OTTUMWA — At one time, most Ottumwa High School students took a “Freshman Skills” class. It included information about credit card debt and other life skills kids would end up needing, especially in a depressed economy.
That class is no longer offered.
“Students were scheduled into Freshman Skills for one quarter, and they had five different components with five different teachers for about nine days each [component],” said OHS Principal Steve Hanson. “That included nine days of financial literacy with Mr. [Mike] Cardin.”
But overall, the setup was too fragmented, said Hanson.
“It didn’t seem to smoothly accomplish the set objective, giving students the skills they’d need to be successful in high school. We decided a better strategy would be to get teachers to embed those necessary skills in their courses,” he said.
And they will gain some financial knowledge, he said.
“Economics is a requirement for graduation. They’ll learn basic economic principles, like supply and demand,” Hanson said. “All students who have an Ottumwa High School diploma have had to pass a course in economics.”
Depending on which course they sign up for, teens may learn about credit cards, college loans or how to run a business.
There’s no requirement at Van Buren County schools, but the available course focuses even more on personal financial responsibility.
“We do offer a consumer math class; it is an elective [for] grades 10-12,” said Van Buren Superintendent Karen Stinson. “They look at checkbook balancing, budgeting, credit cards, consumer loans and use of math in careers.”
Van Buren County students even learn something that is tough for some adults: How to do their own taxes.
“I think we all learn differently. A child who can learn from applied math, because it’s more hands on and means something to them, [won’t be] left behind [academically],” Stinson claimed.
Nearly one-third of eligible students take the course.
“We have bankers or realtors who come in and talk about the importance of good credit or the difference between what you’ll pay over time on a 30-year mortgage compared to a larger down payment and a 15-year mortgage,” she said, adding that getting automotive brochures and figuring out what kind of car they can afford seems to interest the teens.
“It’s very practical, very hands on.”
Parents do want their children to be financially responsible.
“These skills are hugely important,” said Joe Schulz, an Ottumwa businessman and parent. “Obviously, this country is in a financial situation right now. I’m not a financial expert, but in my opinion, that could have been avoided.”
He said no single class of people, from lenders to borrowers, can take all the blame, but responsible borrowing could certainly have helped avoid the extent of the financial crisis.
“Credit has its place but overuse of it can get you in trouble,” he said. “I wish parents would teach that. We’ve got to get that information to the kids, and it’s not coming from the parents. Finances are one of those realms kids have to have. They turn 18 and go to college and get all these credit card offers. You and I know as soon as you get one [card], you’ll get more offers in the mail.
As time goes on, some skills can become more or less important, Schulz feels. He has one child in high school, one in middle school and one in elementary school.
“I do not know how relevant checking accounts are going to be; we are more in the realm of credit cards and debit cards,” he said.
In fact, he said, debit cards are an easy way to get young people used to the idea of appropriate transactions.
“[For parents], debit cards are a no brainer,” he said. “If [a young person] swipes for $100 at the cash register, and [their] account only has $75, [they] have to put something back. And that, of course, teaches them to know what’s in their account — and to know to put money into that account.”
Stinson encountered the Consumer and Career Math class not just as an educator, but as a mom.
“All three of my kids took it,” she said. “It was a real eye-opener. One [activity] was to budget for a vacation when you eat at restaurants every day, compared to when you stop at a market to [buy food] to make. My kids were amazed at the costs.”
Her daughter and two boys are grown now, but at the time, she encouraged them to take the course and to keep track of their own finances.
“As a single parent, I taught them, ‘here’s what you need to do.’ They had a checkbook real young,” she said, recalling her daughter had one in eighth grade. “It wasn’t a lot of money, but I told them, you can’t write a check if you don’t have that [amount] of money in the account.”
The class helped them learn how to keep track of how much they had in the bank and made them practice.
“I think my children really benefited from it,” Stinson said.
Mark Newman can be reached at 683-5358 or by e-mail at mgnewman@mchsi.com.