BY NATASHA LINDSTROM, STAFF WRITER
APPLE VALLEY • Until recently, 16-year-old Robert Bacon didn’t understand the difference between a debit and credit card.
He knew what credit cards look like, how to use them and that when you do you get a bill in the mail, but he hadn’t learned about compound interest, finance charges or why a credit rating is so important.
Now, Bacon said he’s grateful for knowing why he should avoid credit card purchases beyond his means, a practical concept he learned earlier this month when financial adviser Jeff Stanga of High Desert Finance visited his Apple Valley High School classroom to teach financial literacy.
“It’s a good thing,” Bacon said, “because if you didn’t know, you’d probably be messed up in the future.”
With more than 1.1 million bankruptcies filed in the United States in 2008 and Americans burdened by more than $2 trillion in consumer debt, national efforts are brewing to get financial literacy programs back into schools.
“Too many kids today don’t know what it takes to make it away from Mom and Dad,” said Joel Lewis, Apple Valley High vocational and special education teacher for 17 years. “They just don’t understand really the pitfalls and the hardships that come with being independent, so these classes help give students a better idea.”
Some research shows young adults may know less about practical money skills than previous years, just as they’re piling on more debt than ever before.
In a 2008 financial literacy quiz by the JumpStart Coalition of Financial Literacy, high school seniors scored just 48 percent — the lowest average since the organization began issuing the tests in 1997.
“Some students honestly think that having a credit card makes you a better citizen, a better worker, and makes you a better person and makes you a better borrower,” Stanga said.
Meanwhile, the average college student graduates with some $4,100 in debt — up from $2,900 in 2004, according to a 2009 Sallie Mae study. Young adults ages 18 to 24 spend about 30 percent of their monthly income on debt repayment — double the same rate in 1992, according to the Center for Responsible Lending.
In a schoolwide effort to boost financial literacy, this year Apple Valley High’s 11th-grade students are taking an 18-lesson financial literacy program during advisory periods. The curriculum focuses on savings and investments, banking and checking, budgeting, goals, career planning and credit.
But just three states — Utah, Missouri and Tennessee — currently require K-12 schools to teach a one-semester personal finance course, according to the JumpStart Coalition. Another 17 states require some financial literacy as part of another class, and 30 states — including California — have no requirements.
Stanga has volunteered to take the High Desert lead for the federal effort to cultivate money-savvy high school graduates less likely to make costly mistakes.
“I think the banking industry preys on people who are not financially literate,” Stanga said.
Too many students, Lewis said, work part-time jobs but never open up a checking account, instead taking trips to the nearest payday loan center as soon as they get their paycheck.
On a recent visit to Apple Valley High, Stanga taught students how to read a check registry and emphasized the importance of establishing a checking account early in order to start a relationship with a bank and establish credibility.
Stanga has also started his lessons at Victor Valley Christian Church youth groups, and he hopes to establish partnerships with every high school in the High Desert. However, Stanga said he’s encountered some initial opposition from some school administrators who he thinks suspect he has ulterior motives. He stresses that his work is voluntary and sticks to general financial lessons — and is not trying to persuade students to sign with his company.
Over the past year, Congress members have introduced a few financial literacy education bills, most of which call for federal grants to fund programs in schools.
But some educators say it’s tough to squeeze the personal finance lessons into already packed curricula.
“They need to make room,” Lewis said, who wants personal finance to become a mainstream subject.As he puts it, “Economics doesn’t pay the bills.”