Financial Literacy Proposal
Rationale and Justification for Financial Literacy Requirement:
Today’s students need a strong foundation in personal finance. An estimated 80% of Wisconsin students work during their high school careers, and nearly one-third have personal checking accounts and credit cards in their own names. Among adults, the last decade has brought with it a major increase in the use of nontraditional credit products that can have annualized interest rates of 300% to 1,000%. Additionally, personal bankruptcies have increased 105% over the past 15 years. These facts contribute to the need for a more focused approach to personal finance instruction for our students, both while they are in school and in the future. These standards lay the foundation for competent, confident, and financially literate citizens.
In addition to the importance of financial literacy is teaching students soft skills to be successful in the world today. According to the National Soft Skills Association, 85% of job success comes from having well-developed soft and people skills, and only 15% of job success comes from technical skills and knowledge. In a study by the American Society for Training and Development, U.S. employers spent $47.3 billion on soft skills training in 2010. (http://www.nationalsoftskills.org/the-soft-skills-disconnect/)
What relevant research supports why this change would be beneficial?
Financial Capability Study:
- Living paycheck-to-paycheck - 54% of WI residents spend equal to or more than their income
- “Rainy day fund” - 51% of residents do not have emergency money of three months of income
- 16% of state residents have engaged in some form of high-cost, non-bank borrowing during the last five years, such as payday lending or advances on tax refunds
While 89 percent of K-12 teachers agree that students should either take a financial education course or pass a competency test for high school graduation, relatively few teachers believe they are adequately prepared to teach personal finance topics.
As of 2014, 64% of Wisconsin school districts have a financial literacy graduation requirement, up from 25% in 2010 and 49% in 2012. Districts in our area that have a financial literacy requirement for graduation include: Cedarburg and Hartford (course). Comparable sized districts that have a financial literacy requirement for graduation include: LaCrosse, Stevens Point, Green Bay, Appleton, and Kenosha via a course requirement.
Mandated financial education in high school increases financial knowledge later in life including improved retirement planning—a powerful proxy for wealth building. Student credit scores are 8 to 17 points higher by age 22.6
“Financial education provides the tools people need to realize their dreams for themselves, family and friends. These standards are the result of a great public/ private partnership that will give teachers the tools they need to incorporate this very important curriculum into their classrooms.” Secretary Lorrie Keating Heinemann, Task Force Member Department of Financial Institutions
What are the essential understandings that the requirement will cover?
Students in Wisconsin will understand the relationship between education, income, career, and desired lifestyle and will develop the planning skills needed to achieve desired future (career and financial) goals.
- Relating Income and Education
- Understand how career choice, education, skills, entrepreneurship, and economic conditions affect income.
- Understand the sources of income and alternative resources.
- Explain how income affects lifestyle choices and spending decisions.
- Explain how taxes and employee benefits relate to disposable income.
- Money Management
- Demonstrate ability to use money management skills and strategies.
- Understand the purposes and services of financial institutions.
- Develop a financial vision based on an examination of personal values.
- Understand the history, purposes, roles, and responsibilities related to taxation.
- Credit and Debt Management
- Identify and evaluate credit products and services.
- Identify and compare sources of credit.
- Identify and evaluate interest rates, fees, and other credit charges.
- Interpret credit sources and reports.
- Calculate the cost of borrowing.
- Explain the rights and responsibilities of buyers and sellers under consumer protection laws.
- Understand how to leverage debt.
- Describe the implications of bankruptcy.
- Analyze the pros and cons of high cost alternative financial services.
- Planning, Saving, and Investing
- Apply strategies for creating wealth/building assets.
- Match appropriate financial services and products with specified goals.
- Describe the relationships between saving and investing.
- Apply the concepts of supply and demand to stock market price changes.
- Demonstrate ability to use decision-making processes in making financial decisions related to planning, saving, and investing.
- Becoming a Critical Consumer
- Understand the impact of contextual factors associated with consumer decision making.
- Investigate the purposes, strategies, and effects of various business practices, including sales schemes or scams.
- Understand the cost of interest rates and fees associated with financial services.
- Understand that verbal contracts are as binding as written agreements.
- Identify sources of consumer protection and assistance including public institutions and private organization.
- Examine critically the impact of socio-cultural norms and demographics related to money, saving, and spending.
- Community and Financial Responsibility
- Understand factors that affect citizen financial decisions and actions.
- Practice skills related to fiscal responsibility and personal decision making.
- Integrate and apply financial knowledge, attitudes, and skills.
- Understand the interdependent role of government, business, consumer, and personal finance in the economy.
- Examine the impact that government, business, consumer, and financial decisions and actions have on the individual, family, community, society, and world.
- Risk Management
- Understand the nature of personal financial risk and the importance of protecting against financial loss.
- Examine the need for and value of various types of insurance within the life cycle.
- Integrate and apply concepts related to personal financial risk, protection from loss, and financial planning.
How will this course align to the district’s strategic direction?
- This course will allow continuous improvement in the WBHS students’ academic performance and within the Business & Marketing Curriculum. In addition, content will be innovative and progressive.
- Gaining financial literacy and soft skills aligns with preparing ALL students for college readiness and career success.
- This course will also align to the district’s Academic and Career Planning process, covering multiple competencies within all eight skill strands that have been adopted by the district.
- Financial literacy also connects to the district’s strategic goal: Create a rich environment for each student to reach their personal potential through improved student engagement in academics, arts, and athletics.
Grade Level: 10-12
Financial literacy concepts are the most applicable to junior and senior students but can reach some sophomore students depending on age and maturity.
We propose that the financial literacy requirement goes into effect for the Class of 2021.
Options to Fulfill Financial Literacy Requirement:
- Personal Finance course (Business & Information Technology Department)
- Concepts that are covered in the class include: career development (goals, resumes, interviews), money management skills, budgeting, credit, investing, taxes, and consumer purchases (car, house, etc.),
- Provide multiple means of representation:
- Students will learn materials from a variety of ways that include but are not limited to direct instruction, peer collaboration, digital projects and information (videos, articles, activities), online simulations, and authentic learning from guest speakers.
- Provide multiple means of Action and Expression:
- There are assessments at the end of each unit that consist of a test as well as a variety of projects. Students can express their knowledge in a variety of ways such as individual projects (digital projects, print projects, online activities). Students will complete a professional portfolio summarizing their career goals and the impact on their financial decisions.
- Provide multiple means of engagement:
- Students will have opportunities to learn and review materials both digitally and in person. Students will be able to apply the information directly through real-life situations and scenarios, testing out their skill set without worrying about a costly financial impact.
- Can be added to summer school schedule as an option
- Online Personal Finance course (would need to be developed)