You know an issue has been ratcheted up a couple of notches when consumer crusader Ralph Nader weighs in.
His latest cause is financial literacy education.
Nader contends that efforts in classrooms all around the country to teach youths about spending, saving and using credit wisely are not working.
Why? Largely because the educational programs are often produced by banks, investment firms and credit card companies that “prosper when young people make poor money decisions,” Nader wrote last month in an opinion column in The Huffington Post.
Given this conflicted state, Nader wrote, financial services companies are more concerned with “selling their wares, not in teaching customers to buy something that may be better or cheaper from a competitor or to not incur any debt at all.”
His views are shared by the FoolProof Foundation, an organization that was created with help from the late CBS news anchor Walter Cronkite. The Florida-based foundation, whose motto is “use caution, question sellers, rely on research,” issued a statement at the beginning of Financial Literacy Month in April that said financial education programs are ineffective.
“None of the major financial literacy programs available to teachers consistently teach the most important financial skill — skepticism,” said Malcolm Kirschenbaum, president of the FoolProof Foundation. “None teach defensive spending. None emphasize the critical need for caution in dealing with any situation that impacts a young person’s financial or personal well-being.”
That bold statement is way off-base to me. The problem I have with Nader, the FoolProof Foundation and other naysayers is that they are lumping all financial education programs together.
To be sure, some classroom programs developed by for-profit companies as well as nonprofits come up short and may have some biases, and parents should be wary of what their kids are learning.
But in my opinion, most programs that reach our children have been doing a good job and have been successful for years.
There’s ample research, including some by Kansas City-based H&R Block, that shows that even a little bit of financial knowledge taught in the classroom goes a long way, especially when introduced at an early age.
I’ve seen the positives over the years, whether visiting grade school or middle school classes, or (in the interest of full disclosure) working as a Junior Achievement volunteer with high schoolers taking mandatory or elective personal finance and economics classes.
How do parents know whether their children are being well served?
The National Endowment for Financial Education, a Colorado-based nonprofit, has a basic five-point checklist for vetting financial literacy programs: Are the teachers well trained? Do the materials come from trusted, unbiased sources? Is the instruction timely and presented when it matters? Is the subject matter relevant for a diverse audience? Has the financial knowledge affected behavior?
Though I disagree with the FoolProof Foundation’s position on financial education, I do like its free, Web-based financial curriculum. One section offers 16 money-related topics geared to high school students, including lessons on evaluating marketing and advertising, college prep, saving for a car and gambling. The lessons are fast-paced and include video. There’s also a section for teachers.