Website aims to teach teens basics of money management

Heather Rawlyk

Friday, Feb. 6, 2004 | 5:08 a.m.

WEEKEND EDITION

Feb. 7 - 8, 2004

Teens must know three things about finances and credit, according to Lynn Strang of American Financial Services Association, which has set up a website to teach teens about money management:

It doesn't take much to acquire a credit card nowadays, making it easier than ever for young adults to get their hands on plastic.

But the long-term effects of credit aren't so easy to understand, Lynne Strang, vice president of the nonprofit American Financial Services Association, said. With credit comes responsibility, and a need for a crash course on finance basics.

To help educate today's youth, the American Financial Services Association started a website called MoneySKILL to provide a free curriculum on personal finance that is "comprehensive and in sync with what the kids learn today," Strang said.

"Unlike other, more traditional text courses that are out there, MoneySKILL is very interactive and teaches its students through hands-on exercises and other activities," she said.

The course consists of 36 modules that students complete in about 40 minutes each. The general areas covered by the course include income, expenses, assets, liabilities and risk management.

Within these areas students will learn about using credit cards as well as the effect of federal income taxes on take-home pay, how buying a car compares with leasing one, understanding different types of insurance, the costs and benefits of borrowing and options in investing, Strang said.

"In order to pass the course, students will not only need to answer most of the questions correctly, but also must create a personal, lifetime financial plan for themselves, using a life simulations feature that asks students what they expect out of life," she added.

Students are asked what kind of job they plan to have, what kind of neighborhood and house they want to live in, what kind of car they plan to buy, do they plan to marry, how many children they want and how they plan to save and invest.

The plans are evaluated by intelligence built into MoneySKILL, Strang said.

"If they aren't viable, students are sent to a 'crash and burn' unit to make repairs to their simulated plans before they embark upon their real financial plans after graduation," she said.

The Clark County School District doesn't use the curriculum, according to school district spokeswoman Mary Stanley-Larsen, as well as Strang. But Strang said she would like to see it adopted in this and other school districts.

Larsen said Clark County schools already introduce many basics of personal finance through a variety of courses, including careers, consumer science and economics classes as well as activities such as a stock market simulation game.

"We're here to educate kids and that includes life," Larsen said. "One of our functions is to prepare kids for society and these are concepts we introduce to children in different ways at appropriate age levels."

The program is geared primarily toward young adults between the ages of 16 and 20, with outreach to include not only high school students, but also people in the military such as first-time soldiers and children of active-duty personnel, according to Strang.

"In reality, however, people of all ages can benefit by going through the MoneySKILL program," she said.

Strang said American Financial Services Association frequently gets comments from adults who say they wish they had access to this type of information when they were in high school.

"The current rate of bankruptcy filings might not be so high if more adults had received personal finance education before going off on their own," she said.

However, the availability of online finance courses today is a sign of the times, she added.

"Today's students are receiving credit offers at a younger age," she said. "We think it's very important that they understand responsible credit use and other fundamentals so they can make good choices and decisions."

The American Financial Services Association Education Foundation is a partner in an organization called the Jump$tart Coalition for Personal Financial Literacy, whose goal is to improve financial literacy among grades K-12, according to Strang.

"Since 1997, Jump$tart has conducted three national surveys to measure high school students' understanding of personal finance basics," she said. "In the most recent survey in 2002, the average score was a dismal 50.2 percent.

"Clearly, young adults don't possess the tools and knowledge of personal finance required to get started in life without financial mishap," she said. "As a result, they enter college or the work force with little or no financial understanding, yet they must begin making financial decisions that could affect them for the rest of their lives."

Strang said she welcomes the opportunity to work with Nevada educators in improving financial understanding among youths in the state.

MoneySKILL is available at no cost to any high school or organization with an interest in using the program, Strang said.

Educators and others interested in participating should contact Susie Irvine, president and chief executive of the AFSA Education Foundation, by e-mail at susieirvine@moneyskill.org or by phone at (202) 466-8611.

The computer requirements for the Money- SKILL curriculum are fairly minimal and can be downloaded, if necessary, free of charge, Strang added.

For more information, visit the website at moneyskill.org.