BY FRANK CERABINO – PALM BEACH POST STAFF WRITER
It turns out that when it comes to “financial literacy” I am, well, semi-literate.
I learned that this week while taking an online financial literacy course offered by the Debt Management Credit Counseling Corp., a Broward County-based nonprofit company that educates state workers, college students and high school students on understanding money management and the financial world we all live in.
I’ve discovered when it comes to understanding APR’s and APY’s, or the intricacies of liens, foreclosures and evictions, or knowing the varying advantages of a Roth IRA, a traditional IRA and a Simple IRA, I’m a little simple.
I knew I was in trouble after reading this question in the course’s online test:
“You should balance your check register at least on a ____ basis.”
And “never” wasn’t one of the four choices.
What got me interested in financial literacy was a new state law that will require high school seniors in Florida’s public schools to complete a financial literacy course before they graduate.
“The kids today don’t carry cash, they carry debit cards and that gets them into trouble,” said Elizabeth Durkee, who has been teaching financial literacy to students at St. Lucie West Centennial High School for the past seven years.
Durkee and her teaching partner Mary Higgins have been using the Debt Management Credit Counseling course, which features 12 areas of study. While some of the topics, such as bankruptcy and home loans, may seem a bit in the students’ distant future, they are not irrelevant topics to their lives.
“We talk about foreclosure, which a lot of kids go through,” Higgins said. “They get a better understanding of what their moms and dads have gone through.”
Jason Athas, who is the manager of the education programs for Debt Management Credit Counseling, is in the process of expanding the company’s educational program to meet the new demand for financial literacy courses that has been created by the state law.
“When I do these classes, the biggest problem I see with students is that they don’t understand interest,” Athas said. “I tie credit card interest rates with interest on their retirement accounts.
“I tell them that if you put a buck away for every hour that you work, starting at 18, and you save that money in an IRA, you’re going to end up with a million dollars in the bank by the time you’re 65.”
The teachers say it’s tough on young people today to manage their finances.
“When I was their age, I didn’t have a credit card,” Higgins said. “Even when I was in college, I didn’t. It’s easy today to forget that when you borrow money, you’ve got to pay it back.”
I thought the most philosophically charged part of the literacy course was the section on debt, and how to avoid it.
“A simple way to decide where to tighten your budget is by identifying your needs versus your wants,” it reads. “Your shelter, utilities, insurance, food, education, etc. are needs. A new Prada handbag, expensive shoes, restaurant dinners, etc. are wants.
“You don’t actually have to give up the things you like to have,” it continues. “The key is to change your shopping habits. If you need new shoes, don’t purchase them at an expensive store. Look for things on sale or at discount stores. Use the Internet to compare prices for electronics and other costly items before you buy.
“The main change you can make is to think about your purchases before you make them. Ask yourself these questions: Is this a need or a want? Can I afford this item? Could I live without this item?”
All these questions left me with one: Can we expect teenagers to act more responsibly than their parents?