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The Almighty Buck Education

Oklahoma Schools Required To Teach Students Personal Finance 304

Posted by samzenpus
from the value-of-a-dollar dept.
Hugh Pickens DOT Com writes "Paula Burkes reports that under legislation passed in 2007, Oklahoma students, effective this May, now must demonstrate an understanding in banking, taxes, investing, loans, insurance, identity theft and eight other areas to graduate. The intent of personal financial literacy education is to inform students how individual choices directly influence occupational goals and future earnings potential. Basic economic concepts of scarcity, choice, opportunity cost, and cost/benefit analysis are interwoven throughout the standards and objectives. 'Oklahoma has some of the strongest standards in the country,' says Amy Lee, executive director of the Oklahoma Council on Economic Education, which lobbied for and helped develop the curriculum. 'Where other states require four or five standards regarding earnings, savings and investing, Oklahoma has 14 standards including three that are state-specific: bankruptcy, the financial impact of gambling and charitable giving.' The law is designed to allow different districts to implement the curriculum in different ways, by offering instruction in various grade levels, or by teaching all the curriculum in a single class or spreading it across several courses. 'The intent of this law was always to graduate students out of high school with a strong foundation in personal financial literacy to reduce the many social ills that come from mismanaging personal finance,' says Jim Murphree. 'I cannot think of anything that we teach that is more relevant.'"
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Oklahoma Schools Required To Teach Students Personal Finance

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  • Great Idea (Score:5, Interesting)

    by Etherwalk (681268) on Monday February 24, 2014 @07:25PM (#46328949)

    Absolutely. Long overdue.

  • by IgnorantMotherFucker (3394481) on Monday February 24, 2014 @07:29PM (#46328983) Homepage

    You are correct to the extent that you are discussing the proposed Pay It Forward plan, in which tuition is free, but one pays a fixed fraction of one's income for twenty-five years after graduation. One does not have to pay if one does not have income, and one's debt is forgiven after twenty-five years.

    But to the best of my knowledge the Pay It Forward plan has yet to actually be implemented anywhere.

    Student loans are funded by banks, and guaranteed by either the states or the federal government. The government pays the interest while you are in school, but if you are not enrolled - even if you haven't graduated - you have to start paying, even if you don't have a job.

    A while back I calculated that student loans are actually just welfare for the banks. For the government to pay the interest while you are in school, as well as to guarantee the loan, so that the government pays if you default, costs the taxpayer more money than if the government just gave you the money outright, say with the Pell Grant that I received starting in 1982.

    However if any legislator were to propose that we eliminate student loans, but then used the money saved to give outright grants, the banks would see to it that that legislator loses the next election.

  • by cold fjord (826450) on Monday February 24, 2014 @07:36PM (#46329073)

    Hopefully this will help reduce the divorce rate.

    Divorcé's Guide to Marriage - Study Reveals Five Common Themes Underlie Most Divorces [wsj.com]

    Money was the No. 1 point of conflict in the majority of marriages, good or bad, that Dr. Orbuch studied. And 49% of divorced people from her study said they fought so much over money with their spouse—whether it was different spending styles, lies about spending, one person making more money and trying to control the other—that they anticipate money will be a problem in their next relationship, too.

    Many marriages today are 'til debt do us part [usatoday.com]

  • Shorter words (Score:4, Interesting)

    by sl3xd (111641) on Monday February 24, 2014 @07:37PM (#46329089) Journal

    Oklahoma's teachers had better use shorter words in their curriculum than their lobbyists used for the press.

    Though I also think high schoolers should be required to work a minimum wage job before graduation, for at least a few months. That way, instead of abstract concepts, they know "it feels like this to earn $100.00."

  • by SuperKendall (25149) on Monday February 24, 2014 @07:44PM (#46329179)

    The DOE has never been about helping students. It's always been a federal organization built to help teachers only.

    Which is why shutting it down would make a lot of sense, the communities could come up with sensible standards like teaching financial skills.

  • by EMG at MU (1194965) on Monday February 24, 2014 @07:46PM (#46329197)
    This scares me. We have to realize that textbooks and curriculum are not guaranteed to be written by truly objective and qualified academics, and that not all teachers are qualified to teach personal finance. With those things in mind, do we want our public schools teaching personal finance?

    Look at those states fighting evolution, look at those states fighting climate change. Think of all the times in high school that it was obvious the teacher had no real knowledge of the subject matter and was just reading out of a book and relying on pre-prepared material.

    In theory, teaching students personal finance would result in financially literate young adults that would avoid the pitfalls of not understanding finance and pass on those positive skills to their children. In practice, theory is never the same as practice.
  • Amen (Score:2, Interesting)

    by Anonymous Coward on Monday February 24, 2014 @08:04PM (#46329403)

    Its about time. I don't recall this being mandatory when I was in school back in the 80's, though I took a basic accounting class as an elective, it was not required. Most of the folks I know who are my age (mid 40's) have at least a basic understanding of these concepts, though the high level of credit card debt shows we're not immune to idiocy.

    But I recently had to bang my head against a desk and wonder WTF is wrong with the next generation when a 20 something I know and am "friends" with on Facebook posted about his first paycheck as a full time employee. His comment was along the lines of "The company I work for screwed me over. I worked 40 hours at $10/hr. I made $400 and I only brought home about $275. I should have made about $100 more, I mean taxes are only 6%" (6% is our state sales tax). This was followed by a few dozen posts by his contemporaries who were offering him condolences, telling him to find another employer who wouldn't screw with his money, etc. A few days later he complained about how his bank was screwing him out of money because he had $50 in his account and deposited a check for $250 then used his debit card to make a $100 purchase..... According to him, he should still have $200 and is pissed that his bank screwed him because he now has only $170...... no one ever explained to him that a debit card purchase clears the bank within hours, a day at most while the check he deposited might take up to 3 days to clear and he had overdrafted and been fined $30. Again, none of his contemporaries posted that he was an idiot, the overwhelming number of posts were about how banks screw them all the time saying that they did not have enough money in the bank when they just deposited a check...

    Yet another posted about his experience buying a car..... it was $8000, it was a 3 year loan. I forget the exact interest rate but say it was 5%.... He at least understood that 5% meant $400, but had no clue why his payment was going to be higher than $235, no one had ever explained compounding interest to him. We started talking and I explained that when I bought my house I financed 200k @ 3% interest for 30 years. I asked him what he thought my payment was.... He pulled out his phone, openned up the calculator and figured I was only paying about $575/month and said that he should buy a house instead of renting, it would be cheaper...... When I explained the concept of compounding interest, and escrow for taxes and insurance, he was shocked. When I told him that that was actually a decent interest rate and you'd pay more if your FICO score was low, he stared at me blankly and asked "My what score".

    These were both high school graduates, both with full time jobs. I know its only anecdotal, but A mutual friend who is my own age and I were talking later and he told me that he didn't bother to respond because he'd had this conversation only a few months earlier with someone else who still didn't get it even after having it explained to them.

  • I like this. (Score:2, Interesting)

    by Anonymous Coward on Monday February 24, 2014 @08:07PM (#46329417)

    I took a Macroeconomic and a Microeconomic course in College and having even a basic understanding of Supply&Demand and Opportunity cost has helped me immensely in life, to better understand the motivation of how anything works.

  • by Anonymous Coward on Monday February 24, 2014 @08:08PM (#46329431)

    God damn, you are a fuckin' whiner. Your parents are at fault for this, your parents are at fault for that - woe is me, I cheated everyone I ever entered into a contract with because I didn't know better but I am a financial genius. How about 'fraudulent fuck' instead? That sounds like a more apt description for you. How about some little personal god-damn responsibility? Own your failures or be owned by them - and perhaps a little prison time would help that persecution complex you've got going there - then you can feel REAL persecution...and a bit of prosecution too - just to top it all off....

    Holy shit! Where's the Tylenol...

  • by tapi0 (2805569) on Monday February 24, 2014 @08:09PM (#46329433)
    Following your argument (that teachers generally aren't able to teach, if I read correctly) to the obvious extreme, why don't we just do away with schools completely as they're obviously pointless. Really?
  • When my parents were in high school and college, "Home Ec" classes were actually about home economics (ranging from budgeting to investments to the consequences of bankruptcy and even to running a home business). By the time I was that age, those subjects were all but gone (at least in the area I went to school, namely western Washington state) and what vestiges of them were left seemed to be about... cooking, or something. Nobody really talked about them, except in a disparaging voice intended to deride girls who had no real place in the school so they took "home ec" because that was all they could manage. Yes, they really were that sexist about it, too.

    I've often thought it was a pity that *real* home economics classes - the kind of things that every adult ought to know, but so few people apparently learn - really ought to be standard material. What are the various kinds of investment accounts, and what are their tradeoffs? How can you calculate how much stock options are likely to be worth at a company? What is a "short sell" and why should or shouldn't you do them? What does it mean to "refinance" a loan, and when can or should you do it? How do you compare salaries in areas with different costs of living? When is renting a home more cost-effective than buying one? What kinds of things impact your credit score in what ways? How expensive of a car can I afford? Is it better to get a short loan or a long one (or none at all) in various common scenarios? Why is it better to diversify investments?

    These aren't business major questions. You don't need a degree in economics to understand them. They don't even require advanced mathematics, certainly nothing above a typical high school curriculum. At least some of this material is highly likely to be useful to literally every single competent (as in, doesn't need a full-time caregiver) adult, and in a capitalist society, the costs of *not* knowing it can be severe.

    Despite that, we don't usually teach those subjects in school. I got a bit from my parents, a bit from some extraordinary teachers I had prior to high school, a tiny bit from an intro econ class in college (said class focused more on theoretical economics, not on the real-world stuff), and a bit more through independent research... and I'm still not confident that I can answer all the questions above (I intentionally included some that I've been meaning to read up on in the future). I've been out of college for four years now...

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