Best Practices in Financial Literacy

Presented by: Mark Goodman – Educational Service Advisor

At:

May 2, 2013H.E.A.R.O. Spring Workshop 2

You-tube worth listening to:

Most students do not know their credit score but know exactly how long Kim Kardashian was married.

Less than 40% knew what “defaultbut 90% know who Justin Bieber is dating.” meant for Student Loans

100% would take advantage of financial literacy learning if it is RELEVANT and INTERESTING.

Thank you Victoria Pirrung for the Video and information!

Financial Education Is Needed

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Heard Off the Street: Young people want financial literacy on syllabus

April 14,2013 from

Students are concerned about financial planning

Only 4 states require personal finance education (not PA)

Peer pressure can discourage good financial habits

Financial Education Is Needed

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The process by which people improve their understanding of financial products, services and concepts, so they are empowered to make informed choices, avoid pitfalls, know where to go for help and take the right actions to improve their present and long term well-being.*

* From Chris Stompanato of ECSI and Student lending Analytics

Financial Literacy Defined

Today almost all Colleges and Universities have a Financial Literacy Program

84% of current students believe they need more financial education. The vast majority wished they received more information as freshman or in high school

Only 13% of colleges make financial literacy part of the mandatory curriculum*

The majority of administrators agree that less than 10% of the students are served by these programs*

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On the Campus Today

Eighty-five percent of college graduates plan to move back home after graduating. (Twentysomething Inc. 2010 survey) The rate has risen from sixty-seven percent in 06’. (Jessica Dickler, CNN staff writer)

Only fifty-nine percent of the young adults in Generation Y (ages eighteen to twenty-nine) pay their bills on time every month. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)

Ten percent of American with mortgages reported being late or missing a mortgage payment in the last year and seven percent of adults are either getting calls from collectors or thinking about filing for bankruptcy. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)

Almost fifty percent of those who closely monitor their finances say that they learned about personal finance from their parents or at home. (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)

About thirty-four percent of parents have taught their teens how to balance a checkbook, and less than that has explained how credit card interest and fees work and ninety-three percent of American parents with teenagers report worrying that their children might make financial missteps such as: overspending or living beyond their means. (Charles Schwab’s 2008 “Parents & Money)  

Around sixty-nine percent of parents admit to feeling less prepared to give their teenager guidance about investing than they do having the ‘sex talk’ with them. (Charles Schwab’s 2008 “Parents & Money)

Three out of every four Americans say they aren't saving enough. (2008 Pew Research Center) Fifty-four percent of college student respondents had overdrawn their bank account and eighty-one

percent underestimated the amount of time it would take to pay off a credit card balance by a large margin. (Center for Economic and Entrepreneurial Literacy Survey)

Forty percent will never gain a net worth in excess of ten thousand dollars. (American Dream Education Campaign)

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Financial Facts

College Loans Epic Default Student Loans the Next Bubble Student-Loan Default Rates Rise As Federal Scrutiny

Grows Decades Later, Student Loan Default Haunts Borrower More college students defaulting on student loans

These are recent headlines taken from publications including The Wall Street Journal, Bloomberg and USA Today that are screaming at us to better educate our students FINANCIALLY!

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Current Headlines

Everyone seems to agree that financial literacy should begin in High School or Middle School◦ At a recent seminar I attended the presenter talked about games like Monopoly or Life that taught

young people about money. ◦ In the “dark ages” when I attended school we learned about the value of money in elementary or

middle school, but today the schools are too busy preparing students for standardized tests and therefore things like finance have followed shop and home economics only to be replaced by test preparation and additional computer classes.

There are some programs available◦ Games like Nintendo’s Money Game, or companies like Squido that offer Financial Literacy for Kids with

Games on-line◦ Creative Wealth International –offers high school level curriculum◦ Jump$tart is a national coalition of organizations dedicated to improving the financial literacy of pre-

kindergarten through college-age youth by providing advocacy, research, standards and educational resources. Jump$tart strives to prepare youth for life-long successful financial decision-making.

We can advocate these programs and hopefully in the future the students that show up on our door will have some financial education and understanding, but for now we must play the hand we are dealt!.

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What We Cannot Control

Financial Literacy Programs for our students should include:

One on One Counselors Written Support Material Outreach Course Work Self-Awareness Activities Interactive Websites Educational Programs

Incorporate into school curriculum Multi-tracks for different levels Target those most in need and apply REAL life situations

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What We Can Control

Brochures and Handouts For-Credit Classes Videos Lectures (small groups are better)

Counseling PowerPoint type presentations Exercises Simulations/ Games / Competition Social Media Peers and Recent Graduates

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Delivery Options

◦ There are schools throughout the country that have Financial Literacy Programs that do work and have proven results so what we need to do is look, find what we like and build the program that best FITS with our institution!

◦ Each of us in this room may look at the same data and build a program that is different.

◦ The key is to Build a program that you believe in and that your student’s will follow to success and just like successful programs everywhere we must continually revisit, update and fine tune.

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C.A.S.E.(Copy And Steal Everything)

Duke University University of Illinois Texas Tech Virginia Tech Plymouth State Augsburg College California Institute of Technology Bowling Green State University Monroe College Boston College And more …

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Schools to Look at and Learn

The first items I will highlight were found in a majority of the programs studied and therefore should be high on our C.A.S.E. list.

Multiple program modules:

Financial Literacy is not a quick fix or something that can be single focused. These programs offer a variety of topics that the students can take one at a time. Some online, some in classes, some offered in groups.

Key Topics included- Budgeting and Financial Planning, Establishing credit, Saving money, Paying debts, Handling credit cards, Loan management, Paying for college, Taxes- preparation and advice, Choosing a professional to work with and Consumer rights and responsibilities.

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Common Ideas - “What”

When you offer a good program, the next key is to make it easily accessible so the students take advantage of what you are offering.

◦ Multiple ways for the students to access information (on many departmental websites) and workshops at various locations.

◦ Webinars were successful when feedback was integrated.

◦ Counseling Offices (professionals and peer) with posted hours throughout campuses.

◦ Trained peers or professionals presenting in residential housing, classrooms or lecture halls and organization offices.

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Common Ideas - “Where”

As we pointed out earlier there are many ways to deliver messages. When it comes to financial matters we discovered that students want to learn from professionals and those who “walked in their shoes” (graduates).

◦ Workshops, Seminars, Classes or even Webinars with guest instructors from the financial industry (bankers, investment, planning, credit and collection) or recent graduates who are now in the workforce repaying loans and credit cards.

◦ Online modules where feedback can be measured.

◦ Published data – booklets – online or print.

◦ “Ask the Expert” – video or via established electronic response (e-mail or message).

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Common Ideas - “Who & How”

Benefits for All: The students:

Avoid default Gain financial education that can be applied throughout life. Understanding “Needs” vs. “Wants”

The Schools: Improved Cohort and overall default rates on Loan Programs Higher rates of graduation and retention at all levels Spirit of cooperation and teamwork between departments Better public image Alumni who are more appreciative and therefore more giving.

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Common Ideas - “Why”

The following may be helpful when looking to build, expand or link to your College’s website:◦ Mymoney.gov

◦ Huffington Post – Mary Johnson’s Blog- Financial Literacy for College Students Net Price Calculator DOE Financial Aid Shopping Sheet Consumer Financial Protection Bureau

◦ PracticalMoneyskills.com Includes lesson plans as sampled on a future slide…

◦ Financial Literacy 101

◦ WhyCreditMatters.net –Access Receivables’ informative and educational site, please look at it and feel free to link or steal anything! (self serving advertising note inserted in this presentation!)

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Helpful Website

The links below will lead you to a variety of sites that address Financial literacy. Some are planning sites to help you set up your site, some are non-profits that offer information and links and some charge small fees.

•www.fdic.gov/consumers/consumer/moneysmart/index.html •www.mastercard.com/us/personal/en/learningcenter/index.html .www.StudentMoney.Uillinois.edu .www.PersonalFinance.Duke.edu •www.cashcourse.org •www.jumpstart.org •www.studentdebthelp.org •www.creditcardnation.com •www.decisionpartners.org •www.choosetosave.org •www.igrad.com •www.mappingyourfuture.org/money •www.bankrate.com •www.annualcreditreport.com •www.practicalmoneyskills.com

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Additional Sites

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Sample Lesson Plan

College Teacher’s Modules (from PracticalMoneySkills.com)

Lesson 1: The art of budgetingLesson 2: Living on your ownLesson 3: Buying a homeLesson 4: About creditLesson 5: Credit CardsLesson 6: Cars and loansLesson 7: Consumer AwarenessLesson 8: Saving and investingLesson 9:; In TroubleLesson 10: About consumer privacy

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Summation

“If you build it they will Come.”This worked for a baseball field built on a mid-western farm, but it

does not work for every student when we look at Financial Literacy.

Administrators at a number of schools admitted that while many students will benefit from Financial Literacy Programs some will not. Therefore it is important that the programs are focused to offer relevant information delivered in a variety of methods. Programs should not only be relevant but repetitive and interactive.

Successful programs incorporate the efforts of many departments and peer to peer efforts.

Social Media is a reality in today’s world and a managed effort for students to “friend” and gain from will enhance your program.

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Summation

The Whitehouse.gov offers information and links on fiscal education. This should convince us all that Financial Literacy is here and will be important in the years to come.

We need to supply our students with these valuable life lessons continually and via means that they will respond to positively. The more students we reach the better financial citizens we develop!

Look at the information introduced in this presentation, reach out to other schools, your collection partners, associations like HEARO, COHEAO, EARMA, NACUBO. We all have a common desire to educate our students to be responsible fiscally now and throughout their lifetime.

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Questions ?

Mark R. Goodman – Educational Service Advisor mgoodman@access-receivables.com

Cell: 856-577-7703 (Pacific Time Zone)