Chloe Blau now knows all about budgeting and balancing a checkbook and maintaining a strong credit rating, even though it might be a few years before she’ll put that knowledge to serious use.
That’s because Blau, a senior at Chariho High School in Richmond, took a personal-finance course at the school. In fact, she didn’t just take it; she was required to pass it in order to graduate next May.
At a time when countless people are enduring home foreclosures and bankruptcies and the loss of retirement nest eggs, Chariho has become the first school in Rhode Island not only to offer personal-finance classes, but require good grades in the subject to get a diploma.
A local financial-education advocacy group – the Jump$tart Coalition of Rhode Island – and the influential Federal Reserve are touting the move as a success in their push to get schools to elevate the importance of fiscal lessons.
Chariho is one of only a few high schools in New England to have taken such steps.
“In my world, all the high schools would be doing this,” George S. Guild, director of economic education at the Federal Reserve Bank of Boston, said during a recent visit to the high school, which serves students from Richmond, Charlestown and Hopkinton. “Now we can say it exists at Chariho High School in Rhode Island. It can happen [elsewhere]. … This is big.”
Other schools offer personal finance as an elective, but starting this year, Chariho requires its students to produce proof they pass the half-year course for their portfolio, a relatively new statewide graduation requirement intended to prove proficiency in certain subject areas.
No proof of personal-finance proficiency, no diploma.
The personal-finance component is not part of the R.I. Department of Education (RIDE) standards, which mandate everything from art and music to writing and science.
“Business and finance are not a focus of the Department of Education,” said Madeline Crocker, chairwoman of the business department at Chariho. “To them, we’re not that important. But this is just as important to be exposed to as art and music and health.”
Indeed, personal-finance literacy has taken on renewed importance in recent years, particularly as the United States suffers through a severe economic downturn.
Testing of youngsters on financial matters highlights that their knowledge is lacking, according to James Hedemark, executive director of the nonprofit Rhode Island Jump$tart Coalition.
He points to one recent nationwide survey that asked high schoolers a multiple-choice question about credit. Nearly half of the respondents said credit was a way of boosting a person’s net worth.
While Rhode Island has no requirement that students receive some type of financial education, the General Assembly approved a joint resolution urging RIDE to develop a statewide strategy and action plan for increasing financial literacy among middle and high school students.
So far, RIDE hasn’t acted.
Hedemark said he has been told that RIDE staff reductions have hampered those efforts. RIDE officials did not immediately respond to requests for comment.
Lobbying to establish a mandatory personal-finance course at Chariho started in 2003, according to Paul LaFrance, who was chairman of the business department then and now teaches microeconomics at Chariho.
Studies have shown that traditionally children learn about managing finances at home, from their parents. But, with some adults struggling in a down economy with bulging credit card debt and past-due mortgage payments, LaFrance grew concerned that poor habits were being passed along.
And the high school offered little to correct those habits.
“It was starting to get frightening that we weren’t doing a good job teaching our students about personal finance,” LaFrance said.
The breakthrough came last year when the school garnered a $100,000 grant from the Champlin Foundation to convert a classroom into a financial center, complete with electronic stock tickers, and three large-screen monitors that keep minute-by-minute tabs on the world’s financial markets, from stock indices to commodity prices.
The school also added an advanced-placement economics course.
Last year’s meltdown in the global markets illustrated the need to take things a step further, said Barry Ricci, superintendent of the Chariho Regional School District, who supported a move to make personal finance mandatory.
The problem: School officials couldn’t add the course to the mandatory 24 credits for graduation without getting rid of another required credit such as art or music.
Instead, they turned to the portfolios, which RIDE started requiring students to assemble last year for graduation, in addition to getting passing grades.
Crocker and LaFrance said students can take a half-year course on personal finance or an online course on “money skills.” Either way, students must include proof they passed a final exam in their portfolio.
Along the way, they’re taught the ins and outs of personal budget, checkbooks, credit cards and credit scores.
Although many lessons won’t apply yet, LaFrance said the youngsters are learning that their actions now can damage their future credit scores, particularly if they fail to pay certain bills. “And a lot of these kids pay their own cell phone bills now,” he said.
Blau took the class seriously. Although she has a part-time job, the personal-finance class, combined with suggestions from her parents, taught her to resist the urge to spend the money coming in.
“I save my money now,” she said. •
