By: Esther J. Cepeda
April 19, 2010
It's Money Smart Week in Chicago, that annual event sponsored by the Federal Reserve Bank of Chicago,and -- if nothing else -- the city is accented with portraits of a robust Benjamin Franklin winking knowingly from the center of a $100 bill.
I can see it now. Wouldn't it be cool if those replica Ben Franklins roaming the streets of Chicago in support of Money Smart Week were carrying functional revolutionary-era firearms and were allowed to shoot anyone who couldn't differentiate simple from compound interest?
I'm kidding, I'm kidding!!! But only because most people would fail that one and the Chicago Police Department would be working overtime to pick up bodies. What with all the money troubles the city has, that just wouldn't be a financially sound way to incentivize people to learn about the power of the cash they work so hard for every day.
So anyway, financial literacy. It's not a sexy topic to most people, though in some circles it is considered the next civil right. The fact that my very favorite founding father greeted me at the train station the other morning didn't hurt, but what really inspired me to write this column was not a hand-wringing "oh, the children of this country will never learn to manage their money" moment. Quite the opposite.
A few weeks ago, one of my favorite young pals asked me if I would take him to the bank.
"What for?" I asked, wondering if there was a local bank giving away some sort of kid-friendly tchotchke.
"I want to open an interest-bearing checking account with the $220 I've saved up," said the 11-year-old boy, whose first name is Stimpson.
Yes, this kid, who attends school in a financially struggling suburban school district where about 60 percent of students live at or below the poverty line and 20 percent of kids are considered limited in English proficiency, had learned all about the power of interest-bearing bank accounts at school. Having taught high school math in this very district, I know that as recently as four years ago the average high school student didn't have a clue what an interest-bearing checking account was.
Unlike the average kindergarten through 12th-grade child in this country, Stimpson -- a strapping young fifth-grader -- is getting familiar with money topics that have made it clear why putting your money in a bank is preferable to cashing your check at the currency exchange and will ultimately help him decide whether and how to take out car loans or student loans.
Yep, Stimpson is one of the lucky ones because some visionary at his school district decided to partner with Junior Achievement, a nonprofit that goes into schools to "teach the key concepts of work readiness, entrepreneurship and financial literacy to young people all over the world."
Their work is sorely needed. According to a recent article in the New York Times, only 13 states require students to take a personal finance course or include the subject in an economics course before they graduate from high school, up from seven states in 2007, according to the Council for Economic Education. Only 34 states (including those 13) have personal finance education in their curriculum guidelines, up from 28 states in 2007.
It's too bad more elementary school kids aren't itching to get their very own financial adviser. And too bad there aren't enough Benjamin Franklin costumes in the basement of the Chicago Federal Reserve Bank to personally reach all of the kiddies in the state to teach them how to manage the money they'll earn and spend throughout their lifetimes.
But Money Smart Week is a good start.