Arnold Elemenatry students run the radio station for the day at JA BizTown. Photo courtesy JA Maryland.

In the field of financial advising, it’s good to know Early Earl and Catch-up Carl.

Greg Smith, now administrative vice president and regional manager with M&T Bank, recalled a time in his career when he used to talk to students in schools about the diametrically-opposite duo to illustrate the importance of understanding debt and investing their money.

“I stressed the importance of emulating Early Earl and establishing a solid start to their financial lives,” said Smith, “and not getting bogged down by a late start, like Catch-up Carl.”

But despite such concerted efforts by investment professionals and schools, has financial literacy taken hold with younger generations?

Survey Said

Jim Polucha, vice president and senior financial advisor for M&T in Anne Arundel County, said financial literacy hasn’t taken hold and he thinks the educational community needs to improve.

“Although the U.S. is the world’s largest economy, the Standard & Poor’s Global Financial Literacy Survey ranks it No. 14 when measuring the proportion of adults in the country who are financially literate,” Polucha said. “That same study reports that the U.S. Financial Literacy Rate is only at 57 percent.”

He thinks all of the schools need to make the topic a prerequisite.

“Waiting until college is too late,” Polucha said. “By that point, many poor financial decisions relating budgeting choices and student loan debt have been made. In addition, the school would have already missed the people who don’t go to college. We should start making personal finance classes part of the curriculum early in elementary school.”

Some progress is being made.

“A new report from the Council for Economic Education found that the number of states that require a high school student to take a personal finance course in order to graduate has risen to 21,” he said.

Pushing It

Sharon Kramer, coordinator/career and technical education for the Howard County Public School System (HCPSS), is a proponent of early financial education.

She said, the Maryland State Department of Education has recently begun to push financial literacy much harder and now has a number of standards for elementary, middle and high school students.

“The state is passionate about this,” said Kramer. “All of its school systems must address this topic. We partner with Junior Achievement (JA) via a memorandum of understanding with middle schools. They’re very strong in this, too.”

She also said that the HCPSS has the Academy of Finance in its high schools that offers tests through which students can measure their progress.

However, there are still no dedicated courses, Information is incorporated into other parts of the curriculum: in elementary schools in social studies, in middle schools in family and consumer science and in the high schools in social studies and government.

“The MSDE (which has information on its web site for every school district) oversees this effort and surveys every district as to how they are implementing Code of Maryland Regulations (or COMAR) requirements for personal financial literacy,” Kramer said.

Real World

Junior Achievement works with Maryland school systems to promote financial literacy, “including Howard system-wide and Anne Arundel on certain programs, including a new speaker career series for middle schoolers.”

JA’s approach encompasses presenting skits featuring students as citizens who have jobs, elect a mayor and pay taxes.

“They’re really learning what it’s like to be an adult in social studies classes,” said Katie Ballance, marketing director for JA of Central Maryland. “In short, they’re seeing an economy at work.”

For middle schoolers like seventh graders in Howard County, the skits in the partially virtual JA Finance Park program give them the chance to own homes, have families, jobs and handle a typical budget.

“It really opens their eyes as to what adults are responsible for,” said Ballance.

For high schools, the nonprofit offers the JA Company Program.

“It can be in a classroom setting or an extra-curricular activity and it allows students to run their own business, from ideation to liquidation,” she said.

One in Howard County, Kits & Co., started as a JA Rising Women’s company and offered packages with Personal Protective Equipment and supplies.

“If it does well,” said Ballance, “the students can even take the ‘business’ live into the real world.”

As Polucha noted, by the time financially illiterate students get to college, it’s already too late to start off on the financial good foot.

That’s why Bernie Sadusky, executive director of the Annapolis-based Maryland Association of Community College, pointed out that the number one reason students drop out of college is the financial burden.

“That can arise for different reasons,” Sadusky said, “but not knowing how to handle money and financial responsibilities is certainly a main cause.”

Sadusky, a former public school superintendent who was once interim superintendent of the MSDE, recalled the state board’s concern years ago regarding financial literacy as a graduation requirement. The debate revolved around mandating the teaching of the topic as a stand-alone class or integrating it into the existing curricula.

He was among those involved who wanted the county schools to set their own rules, without a mandate. “However, I now think it needs to be a stand-alone course,” he said, “due to the number of students who drop out of college for financial reasons.”

21 States

Heightening financial literacy is a key topic addressed by the Alexandria, Va.-based American Association of Family and Consumer Sciences (AASFC). Many educators who teach in secondary schools nationwide are members.

Spokesperson Nancy Bock said that there are 21 states that require high schools to teach financial literacy in some way – including Maryland.

“We consider financial literacy a STEM (science, technology, engineering and math) initiative,” said Bock. “We see that there are still too many people who are not well-versed on handling financial matters. In 2018, two-thirds of Americans, according to the Financial Industry Regulator Authority, couldn’t answer more than three of their five financial questions.”

Lack of financial knowledge can be especially devastating during a pandemic.

“Forty-six percent of individuals we surveyed lack emergency savings of at least three months,” she said. “That’s important to have at hand during normal times, and more so in today.”

So, with all proper deference to Early Earl, even if it turns out that Catch-up Carl has a rich uncle and changes his name to Inheritance Isaac, it pays to bone up and learn to make wise financial moves.

Despite today’s disappointing landscape, hope still abounds.

“I think we’re on the right track,” said Kramer. “As we move forward, more educators seem to be working together to present effective learning platforms to increase financial literacy.”

By Mark R. Smith | Senior Writer | The Business Monthly | December 2020 Issue