In our opinion: Financial literacy an important key to successful marriage, family

Published: Monday, Feb. 27 2012 12:00 a.m. MST

This archive photo shows Tammie Howarth talking to students about the stock market as Westminster College and West High School partnered to teach about 30 students financial literacy in 2009.

Tom Smart, Deseret News

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Less than half — 48 percent — of high school seniors know that paying only the minimum balance on a credit card costs more in annual finance charges than paying the balance in full. That's according to a 2008 nationwide study funded by the Merrill Lynch Foundation and conducted by Jump$tart, an organization that promotes financial literacy.

So it's puzzling that Rep. Merlynn Newbold, R-West Jordan, wants to drop the requirement that high school students in Utah complete a half-credit course in general financial literacy in order to graduate.

Utah's law was passed in 2008, just as the mortgage crisis was gearing up. One reason behind it was that Utah has been in the top 25 percent in filings for personal bankruptcies since the 1960s, according to the nonprofit organization Finance in the Classroom.

One of the first states to implement such a requirement, Utah has served as a model for other states looking to put a similar requirement in place. Utah's course standards include lessons on income and careers, money management, saving, investing and retirement planning, as well as understanding credit.

It's unclear why Rep. Newbold wants to do away with the class. Some say it stems from a belief that students already know the material being taught. It's true that Utah students rank higher on financial literacy than those in many other states, but personal finance is a complicated enough subject, even for many adults, that teachers can surely find something new to teach students.

Some students will always come to a subject with more understanding than other students, but eliminating a financial literacy course altogether because some in affluent areas already have experience with basic budgeting would certainly be throwing out the baby with the bathwater. If something about the course isn't working, it should be improved, not scrapped.

The Jump$tart survey found that college students fared somewhat better on the financial literacy quiz than high school students. But not all students go on to college, and those who don't still have to pay bills, navigate credit and save for retirement. For those who do attend college, student loan rates are higher than ever, with new graduates across the country complaining they are being crushed. It makes sense to help these students understand what they might be getting into before they make decisions to take on so much debt.

Financial literacy is an important key to successful marriages and families. Studies show that standard of living is tied not only to resources, but also to the ability to use them wisely. It is the unfortunate truth that those with fewer resources also tend to have less understanding of financial principles — something that made them especially vulnerable to getting involved in sub-prime mortgages. It is imperative that schools continue to empower young citizens with the knowledge and tools to make good financial decisions and achieve the dignity of self-reliance.

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