Money doesn’t grow on trees, as the old adage goes.
While some may take a lifetime to figure that out, high school students in Marty Jessett’s quantitative and financial math class quickly learn that lesson after keeping track of their expenses for about a month.
The assignment is often an eye-opening experience for the teens at Spokane Valley’s University High School – especially as they tally their totals.
Being forced to write down how much they spend and what they buy has led some to conclude that lattes and eating out for lunch are luxuries that they can no longer afford.
“Some people spend without thinking about it, so (the assignment) makes them more conscious of their unconscious spending,” said Jessett, a veteran math teacher who has been teaching the elective on finances for the past five years. “For a lot of them, it’s a slap in the face.”
With the unemployment rate at 10.2 percent – the nation’s highest since 1983 – and more Americans struggling to make ends meet, teaching young people how to manage money and live within one’s means has become more crucial than ever.
But for some parents, financial know-how isn’t something they can pass down to their children if it’s a skill they haven’t mastered themselves.
According to a 2008 survey conducted by the Pew Research Center, three out of every four Americans say they aren’t saving enough.
Another Pew survey, conducted in 2007, shows that among adults who have a credit card as a regular household expense, only four in 10 pay their credit card bills in full each month. Less than half said they used some sort of formal budget to help them manage their household expenses.
It’s perhaps no wonder that many high school-age students lack basic money management skills, including the ability to balance a checkbook, according to the Jump$tart Coalition for Personal Financial Literacy.
Money, for some families, is also a taboo subject. Although the recession and rising unemployment have forced more parents to discuss finances with their children, some adults just don’t feel comfortable sharing that information with kids.
That’s why Jessett and other teachers have taken it upon themselves to incorporate financial education into math and other subject areas.
Students in Washington state aren’t required to take a personal finance class to graduate, but with the current economic crisis, more people want to make it a priority. Last year, Gov. Chris Gregoire formed the Washington Financial Literacy Work Group to investigate ways to improve financial education throughout the state.
While many of Jessett’s students are often surprised to learn how much they spend, there are some who show an understanding of personal finance.
“The kids that have the best sense are the ones that have jobs, because they know how hard it is to get the money,” he said.
“But for some, money is used for the car or to finance their entertainment. They haven’t had that discussion about the difference between a want and a need.”
For most kids, discussions about money can often turn into a lesson about goal-setting, said Elisabeth Hooker, the education outreach officer for the Spokane Teachers Credit Union.
“Kids have a lot of wants,” she said. “I like to start by asking them what they would like to have and what they need to do to reach their goals.”
Hooker, who talks to thousands of kids each year by visiting classrooms throughout the Spokane area and North Idaho, sometimes begins the conversation by setting this scenario for younger kids: It’s your birthday and your aunt has given you $100. What will you do with this money?
Some tell her they would spend it on candy. Others say they would buy a motorcycle.
Children in the lower grade levels “know you exchange money to get things, but they don’t necessarily know how much money it takes,” she said.
So Hooker proceeds to ask them questions about earning money and if some of the things they want to buy are worth the time they spend raking leaves or doing other chores to earn the cash.
Using a money chart, she also talks to children and young people about their options for money: saving, spending or sharing.
When they discuss sharing or philanthropy, kids often tell her stories about how they’ve saved money to help out a sibling, a friend or even their own parents.
For the youngest kids, she’ll occasionally use books such as the “Berenstain Bears’ Trouble With Money” to teach them about the need for discipline and responsibility.
When she speaks to older students, including the seniors in Jessett’s classroom, Hooker shares some of the misconceptions she had and the money mistakes she made in her own youth.
“I think it’s important for families to start talking to kids about money at an early age so they develop healthy habits,” she said.
Hooker also tells the kids about some of the STCU programs that can help them and their families become more financially savvy.
Among them is the Kids Club, which rewards children for saving money over time. The credit union also has a link on its Web site called “My Life, Money,” which provides tools for kids, teens and their parents.
Once or twice a year, 11- to 14-year-olds can attend one of STCU’s Money Camps. Teens ages 15 to 18 can participate in Money Live, a 2 ½-hour after-school workshop that puts them in their parents’ shoes.
Each participant gets a profile of their potential life and must make choices about housing, food, child care insurance and other money-related issues during a hands-on simulation.
In his quantitative and financial math class, which is offered as an elective to seniors, Jessett focuses on six big ideas: decision-making and taking personal responsibility; income and careers; money management, which includes writing a budget or spending plan; credit use; risk management; and investing.
“It’s about how to manage money and survive when you get out of high school,” he said.
Throughout his course, he also emphasizes the importance of staying out of debt. Financial products and services that didn’t exist a few decades ago – credit cards, debit cards, home loans with various adjustable rates – have made it difficult for young people to weigh the pros against the cons, he said.
“Financial literacy is so important,” Jessett said. “It will shape the future of our country.”