Checkbook Math--Policy and Practice Don't Reconcile
The headline on a recent Washington Post story reads: "Checkbook Math Increasingly Rare." Daniel Devise reports that these practical math courses, aimed at teaching students "how to balance a checkbook and shop for a home loan," are disappearing in Virginia and Maryland schools. That’s not surprising. Here in Virginia, we no longer teach Consumer Math as a middle or high school course. The goal is for everyone to start Algebra in eighth grade and for everyone to graduate with four years of mathematics.
However, because parents and potential employers consider these skills essential, our General Assembly has mandated that the Virginia Department of Education include Standards of Learning for Economic Education and Financial Literacy in our pantheon of learning priorities. Since there are just so many classes that can be fitted into the seven years of secondary education, Virginia has opted to cover the concepts through correlations to Standards of Learning in Math, Social Sciences, and Career and Technical Education in grades 6-12.
Here are some of the Essential Knowledge and Skills Objectives for Financial Literacy:
• Correlate career choice to education, income, and goal attainment.
• Compute state and federal taxes.
• Construct a spending plan that considers options (including financing higher education and managing a family income).
• Compare financial institutions in terms of personal banking needs.
• Complete a loan application.
• Read and comprehend the terms and conditions of various credit cards, considering credit card laws and regulations.
• Understand the implications of bankruptcy in light of new bankruptcy laws.
• Examine types of contracts ( including three day rescission law on mortgages and certain other purchases).
• Investigate and compare saving and investment options including after tax and tax advantaged personal saving vehicles (401k, 403b, and IRA).
“Wow!” You might be thinking, “This is a lot to expect of high school seniors, but it’s really good stuff to know! In fact, I might want to borrow my high school senior’s textbook to brush up before filing my taxes or refinancing the house to pay for her college education.”
But here's the problem: High school juniors are taking U.S. History and seniors are taking U.S. Government. And if they are taking an Advanced Placement History or Government course, then the curriculum must align with the AP guidelines, and these Financial and Economic essential knowledge and skills, however valuable, are not included in these courses. There might be points at which the concepts intersect, but it would be an add-on, and the teachers of history and government are pressed hard to prepare students for both the Virginia SOL tests and the AP tests. There’s just not much time for extras.
As a result, much of the responsibility for covering Financial Literacy in Virginia lies with seventh grade Civics and Economics and Exploratory Family and Consumer Science teachers . But most 12- and 13-year olds really aren’t ready to start learning how to read their paycheck stub, file their taxes, purchase bank services, apply for loans and credit cards, invest for retirement, or file bankruptcy if something goes wrong and things don’t work out. Middle schoolers need to begin to grasp the big picture of how money impacts life, but the specifics are too far into their future to be relevant.
So where are these concepts most likely to be taught in meaningful ways? In high school Career and Technical Education courses. While learning a trade, students are also learning to manage a business because many of these young people will be independent contractors who will need to manage all aspects of a business. In Marketing and Cooperative Education programs, students are often spending part of their day in the workplace where economic literacy is not an abstract concept, but a reality of their student/employee learning experience. Personal financial management concepts are foundational to Family and Consumer Science (formerly known as Home Economics) because the reality is that every family unit is also a nano-economic system.
But the truth is that a year of Family Management just doesn’t have the cachet of a fourth year of foreign language when it comes to college admissions. So if you're college-bound, you're likely to skirt around any of the practical coursework that one student in the Washington Post story described as "the easiest math class she has taken in high school but also the most useful."
Here’s another rather inconvenient truth. Having the resume to get accepted into a four year college does not guarantee a fast track to economic security. But it does pretty much guarantee an investment of close to $100,000 over four years. It occurs to me that while Calculus may help as young people start into college, “Checkbook Math” maybe more essential if they are going to finish a four year degree.
We’ll stop there for now. But keep this question on the table until next week if you will:
Your own 18-year old comes home and asks you to be his co-signer on a note so he can take advantage of a great investment opportunity. He's not really sure why this would be a good investment, but all of his friends are investing too. He knows he needs and wants to participate. He's not really sure how he would repay the note, but he is sure that it's going to be worth $100,000. What would you say?
It's not a trick question. Education may be priceless, but it's not free....