The Times of Trenton (New Jersey)
By: Tom Considine
December 6, 2011
Start young and keep learning financial literacy skills
For the past five years, staff of the New Jersey Department of Banking and Insurance (DOBI) and representatives of the state's banking community have been working to teach high school students about such things as how to establish and preserve good credit, how to balance a checkbook, how to save money, how to apply for a college loan and other basic financial information through the state's Financial Literacy Program.
Since the program's inception in 2006, we have taught classes and done presentations to more than 30,000 students at more than 200 high schools in all 21 counties.
This year was the first that financial literacy was included in the state's Core Curriculum Requirements -- an extremely positive development in preparing our students for a sound fiscal future. Students are required to take at least 2.5 credits in financial, economic, business and entrepreneurial literacy before they graduate.
Throughout the year, DOBI and our partners in the financial services community invite school districts to participate in this project. Over the past two months, I have spoken to high school students in Howell and Jersey City, and later this month, I will be speaking to students in Matawan. The students are polite, genuinely interested in what my fellow speakers and I have to say and are always eager to ask to questions.
The reason we conduct the program is simple. Most high school students are likely to soon be working in their first jobs and are about to begin experiencing some adult responsibilities. They are about to open bank accounts and possibly have disposable income and credit cards in their pockets for the first time in their lives, particularly as they go to college or begin a trade.
We stress to them that it is an absolute certainty that the financial decisions they make today will affect their future opportunities. We educate them that being smart about their money is as important as being book smart. We teach them that learning some basic financial information now and knowing how to choose the right loan, how to save money and avoid paying high credit card rates will make a huge impact on their lives.
Inevitably, when we ask the audience how many of them know someone who is maxed out on a credit card, who has suffered identity theft, has no savings or has borrowed more to buy a car or house than they could afford, a sea of hands go up.
The program has been so successful that we are going to move into another gear and increase our efforts to reach out to a new audience: senior citizens. Although some of the issues we talk about will be different, the purpose of the program will remain the same: to put important financial information into the hands of consumers to help them make smart choices. In our experience as regulators, we are well aware that both the young and the elderly serve as targets for financial "offers" that are just too good to be true.
Today's senior citizens face myriad complicated financial decisions. They need to know such things as how to choose a Medicare provider, how to avoid life insurance or annuity scams and how to avoid identity theft or insurance fraud.
Also, there are many complex financial products geared specifically toward senior citizens, such as reverse mortgages and third-party purchases of life insurance policies that consumers need to understand.
In short, our senior citizens can benefit just as much from financial literacy programs as our high school students.
We have already begun some of these programs. Last month, DOBI staff participated in AARP's Consumer Resource Fair, answering questions for senior citizens on how to choose an annuity product. Staff from the department's Life and Health Bureau have also begun doing regular presentations on the state's health insurance program for people with pre-existing conditions, NJ Protect and other health insurance issues related to senior citizens.
This is only the beginning, as we plan to do more. So, we would like people to look for us next year in libraries, community centers, senior citizen centers and town halls in their area.
In today's tough economic times, amid the steady proliferation of new financial products and increasingly complex information, this financial literacy program is more vital than ever -- for all ages.
Tom Considine is commissioner of the New Jersey Department of Banking and Insurance.