Mastery of money issues a graduation requirement for high-school students
High-school students can often be heard lamenting, “I am never going to use this in life” when facing a particularly challenging class.
That disclaimer carries no weight for students taking financial literacy, a course that is state-mandated for graduation in Wisconsin.
Each area high school has crafted a curriculum designed to give students the necessary tools to prepare budgets and handle personal finances.
Port Washington State Bank President and CEO Steve Schowalter says the training is essential in preparing young people for a life that is very much driven by the free-enterprise system.
“Our bank and community bankers in particular have a great concern regarding the financial skill sets that young adults possess coming out of high school,” Schowalter said.
“While many are taught sound money management by example from their parents and even grandparents, a surprising number can be ill-equipped to handle adulthood and the financial challenges ahead.”
For several years, Schowalter’s bank has underwritten the cost of a financial literacy curriculum developed by the EverFi company that is used by the Port Washington, Grafton, Cedarburg and Cedar Grove-Belgium school districts.
The six-hour program tracks students’ mastery of such topics as credit scores, insurance, student loans, mortgages, taxes, stocks and bonds.
“You could liken this to driving a car,” Schowalter said.
“You can’t expect youths to graduate high school and just be given the keys to adulthood finances without any training, no more than you could just hand car keys to an untrained individual and expect them to safely navigate the road ahead.”
Ozaukee High School teacher John Odenwald is one of those offering behind-the-wheel training to students facing an obstacle course of financial decisions that await after graduation.
Odenwald uses an online “Money Skill” program which are also donated by Port State Bank to teach students about such investment tools as certificates of deposit, money market funds, U.S. Savings Bonds, mutual funds, stocks and commodities.
“We talk a lot about looking at personal finance from a long-term perspective,” he said.
“I ask the kids to imagine what their lives will be like in 20 years — take a mental snapshot of whether they are going to own a house, buy a big boat, have a family, live here or move away — and then decide what kind of career they will need to support that lifestyle.”
Part of the lifestyle lesson is to develop a real-world budget based on the priorities each student sets for their future life.
Students are told they can expect to pay average monthly bills of $1,100 for rent or mortgage, $125 for gas and electric service, $140 for cable TV and Internet service, $375 for car payments, $100 for insurance and $130 for phone service.
Beyond those expenses, Odenwald tells his students, they have to decide how much they will have left for such discretionary items as food, clothing, entertainment, travel and hobbies.
“I can recall one student who said their monthly budget came to $14,000 and they wanted a job that paid something like $3,000 or $4,000 a month,” he said.
“That was a real eye-opening exercise. Talk about having champagne taste and a beer budget.”
Still, Odenwald said most of the students come to his class with a solid financial foundation.
“You can tell that a lot of the kids discuss household budgets with their parents. In most cases there seem to be pretty conservative values ... an appreciation of the value of money,” he said.
While most students are preoccupied with the days ahead after graduation, or even after they complete their college degrees, Odenwald has his students look into the power of long-term investing by planning retirement portfolios and seeing how money can grow dramatically over time.
“It can give them a pretty good idea of what kind of lifestyle they could maintain in 40 years,” he said.
Senior Mike Richter is planning to attend the University of Wisconsin-Madison in fall, but said the course has him envisioning life after college.
“This class makes you think about what you need to do to live the kind of life you want,” Richter said.
According to the personal finance website WalletHub.com, Wisconsin is the seventh-most financially literate state in the country — based on such parameters as credit scores, debt and delinquency rates.
“It really comes down to not spending more than comes in,” Odenwald said.