Scott G Winterton, Deseret News
SALT LAKE CITY — Learning how to manage money is a challenge: How much is too much to spend? How much should you save for short-term needs and long-term planning? How should you use credit to your advantage and yet stay out of debt?
It's a problem for adults who have never been trained. But equally so for students who receive little guidance on the subject at home, putting them at risk for difficulty in their adult years.
In Utah, 11th and 12th grade public high school students are required to take Adult Roles and Financial Literacy classes as part of the Family and Consumer Science curriculum. Brenda Rhodes, who teaches financial literacy at Salt Lake City’s West High School, said about two-thirds of her students receive little or no money management training at home.
“A lot of people are living paycheck to paycheck and they don’t learn budgeting or financial (planning),” she said. Many students are enlightened by the “practical experience” lessons learned in the classroom, she said.
“They get it, about how important it is to save money and avoiding debt and using their paychecks more wisely,” she said.
The parents in many of her students’ households often work more than one job to make ends meet and have little education themselves on sound money management principles.
“It gets frustrating in a family structure to teach children all these lessons,” she said. While some of the challenges are socio-economic, there also may be some cultural components at influence making it difficult for kids to learn the difference between wants and needs. Priorities can differ widely from a cultural point of view, she said.
Too many students do not even know how to manage a checking account, Rhodes said.
“(This class) does open their eyes,” she said. “A lot of kids will say, 'I learned a lot from it' or they will ask more questions. It helps them process (the information) and use their critical thinking skills.”
The 2008 graduating class was the first required to take a semester of financial literacy training, which included lessons on credit, risk management, savings goals and investment planning.
Learning at home
Highland High School junior Nikita Valdez, 17, has yet to begin her financial literacy education at school, but her first lessons have started at home. Her parents started out by instilling the importance of saving money, she said, and continue to stress the value of proper money management.
“I don’t really get a regular allowance,” she said. “I pay for (things) with money I’ve earned.”
She earns most of her spending money through babysitting, and also does chores around the house for which her parents “pay” her by purchasing items she needs.
Her parents opened a checking account with her last year before a class trip to New York. Nikita said it was her first experience using a debit card — which she used to pay for food and expenses while on the excursion.
“I had never thought about tipping before or signing receipts or when to use a PIN,” she explained. There was also the matter of learning to deposit checks in the bank, all of which she said has helped enhance her appreciation for properly managing money.
“(Like all) the little things that your parents do everyday that you don’t pay attention to,” she said.
Using an app on her smartphone, she is also able to monitor her checking account balance to avoid overdrafts.