Synthesis Paper

Monetary Madness: A Study of Personal Financial Literacy

According to the American Association of State Colleges and Universities, in 2010, the
financial literacy of high school students has fallen to its lowest level ever, with an average score
of 48 percent, a decrease from a high of 57 percent in 1997, despite the mandatory financial
education that is given in the different public school systems across the country (Harnisch). It is a
nationwide epidemic, students are prepared to fight it, but the preparation is inadequate.
Financial literacy has lifelong benefits and is vital to everyday life, and because the current, basic
financial education is ineffective, financial advice sessions must be adopted by school systems in
order to increase interest and knowledge in finance management.
Financial literacy is the fundamental, most basic part of financial capabilities. Financial
literacy deals with basic management of resources, money, and is crucial to life as an adult. Most
stages in life require monetary resources, and most people have financial problems throughout
life paying for the resources. In fact, adults have multiple financial responsibilities to which they
are legally obligated to and are strongly advised that they complete them and complete them on
time, so that no negative consequences are faced. One of these responsibilities is insurance,
which is an imperative component of life - whether it be life insurance, car insurance, property
insurance, etc. Insurance is key when preparing for accidents (Smith). Accidents cannot be
foreseen, and it is beneficial to have the help of insurance policies for death, disability, or
property to relieve the financial burden that comes with recovering from accidents.
Another responsibility of preparing for the future is preparing for retirement. It is a task
that many find tedious, and it is also a plan that many start too late, when they realize the
importance of saving. The earlier one starts, the easier and more money they will have saved up

Park 2
for when they are too old to work (Top 10 dol.gov). The most dreaded one of these is paying the
obligatory taxes. Whether it be income, sales, property, etc., people are legally bound to pay
them to keep the government going, and also so that the government can fund public school
systems, repair public facilities, and more (United States Taxes immihelp).
Although financial illiteracy could sound like an individuals action and has individual
consequences, financial ignorance can have societal consequences. It is not a single player
game; individual's knowledge or the lack thereof can cause detrimental, domino consequences in
the local, national, global economies. Educated spenders are more prone to have less debt
because they ration their income and spend wisely, separating need from want and promptly
paying dues (Gerstein). Such leads to less economic strife. While spending is inevitable, there are
better quality goods and wants that can be purchased - with less debt. Because higher consumer
consumption leads to a better economy, individual debt decreasing can give the consumers
leeway to spend more, instead of paying off their debt. However, the opposite is true as well. If
debt is prevalent and people are not spending money on the wants as much, then the economy
is more likely to experience early recession ("Performance in Financial Literacy").
The economy is not the only component in which financial knowledge can be applied to.
Financial education can help make decisions about laws regarding money, whether it be for
voting for a new law or voting for a president candidate. It is important for citizens to be
educated and know what they are voting for, as they would want a candidate who represents their
views financially as well as politically (Fuller). Well informed voters can also induce other voters
to get knowledgeable as well, as conversations are prevalent around election times on the
different proposed reforms. If two people in a group are fervently conversing about the economic
plans of a potential candidate, it will increase interest and will motivate the others to become

Park 3
knowledgeable. Also, individual financial illiteracy can negatively impact society as a whole if
bad management of resources leads to bankruptcy. One person going bankrupt or not having
disposable income due to illiteracy will potentially negatively impact his/her family members,
the bank, employees and employers, and more, affecting others around them and acting as a
financial burden, endangering the financial stability of others ( Folger). Going bankrupt and not
having disposable income are similar in that the person does not have money to spend,
benefitting the economy, without putting a financial stress on himself.
Schools teach students skills that students will find useful later on in life. Or do they? The
banal comment and question in classrooms is when are we ever going to use this in real life,
but financial literacy is an actual skill that is vital to life in the working world. In the Howard
County Public School System, financial literacy is taught in several classes. A common class that
most will learn about financial literacy earlier on in high school, specifically sophomore year, is
American Government. Whether it be American Government AP, GT, Honors, or Regular,
students learn about basic economics and different components of financial literacy. However,
these financial lessons have potential to be much more effective, in different forms. The current
curriculum in the Howard County Public School System, there are optional classes that students
can choose to take. Typically, the sophomore class takes American Government, and grasp a
basic sense of financial literacy. However, this lesson is not as emphasized, as some students do
not really have interest in the topic and often ask why a government class is teaching financial
literacy (HCPSS.org).
This problem could be solved with designating more time for these lessons, and helping
students realize the importance and benefit of being financially literate. Because this class is
taught after the AP test and closer to summer, lots of students have a loose and unmotivated

Park 4
attitude towards this subject, as they half hearted study and work in class. This leads to a lack of
interest and knowledge, which is the opposite of the purpose (Hcpss - after AP test). As stated
above, this unit is taught to sophomores. This is the wrong audience because a majority of
sophomores are 15 or 16, an age most workplaces deem is too young to work. Majority 79% of
the students said that they would not attend a financial literacy course, and do not have a full
concept of financial literacy nor do they have interest, simply because they have not or do not
deal with money in their lives.
Student results of financial literacy is at an all time low, and this this a national trend.
American students, specifically high school students, have an all time low financial literacy at a
time when the economy needs it the most - thus calls for the change in the school curricula. 52%
of 2015 graduates in Maryland received financial instruction, and 89% of them, after receiving
financial instruction, stated that they were better prepared to make informed decisions. While this
seems promising, the downward trend is present, as there has been a constant 1% annual
decrease since 2012 (Gilli). Long term life impacts of literacy include capability in paying taxes
promptly, possible job openings in accounting or tax management, financial security and benefits
from savings accounts and investments and more (Mandell). Students who are already interested
in this topic or those who want to learn more can join other clubs/ extra classes can help increase
interest and knowledge in finance, and these opportunities are free and open to all students.
Some schools, like Reservoir, have outstanding business clubs. Reservoir DECA has won states
13 years in a row. DECA & FBLA & Millionaires Club allowed students to practice doing
business in the business world and creates a safe, fun and competitive atmosphere in which
students can be educated (DECA.org). Outside of school, HCPSS holds info nights for financial
literacy and for saving for college. These lessons help students and their parents learn about the

Park 5
opportunities. Different business classes are offered in Howard County curricula as modules, but
most of students do not take these classes as much as they should, with only 10% of students
having been to a financial literacy course and only 50% wanting to go to a financial literacy
course about saving for college.
The solution to financial illiteracy and uniterest is to teach differently or over different
periods of time, making the lesson plan more specific and tailored to each demand of the student.
These sessions are called financial literacy sessions, which are more tightly engineered classes
where the students will be grouped together so that they feel the lesson is actually applicable to
them and not a formality of the high school curriculum. These sessions will be held once a month
or once every two months, and could take place similar to an extended- extended break, during
the school day. How is it different from the current one? Financial literacy is more tightly
grouped together. For example, group A could be students with a source of income, who pay
taxes and have to know how to save. Group B could be a group of students who do not have a
job, that could possibly do chores or save allowance money (Collins). How does it increase
interest? It will let students see where they are and see where they could be financially, instilling
interest and motivation for education (Knight et. al).
Many students have envisioned and have set high fiscal goals for themselves as seen on
Twitter and instagram of countless Me in 10 years posts with lavish displays of wealth, but
many do not have a plan of how to get there. Certain benefits of financial advice sessions include
an overall sense of comfort and satisfaction of having a plan of how to deal with the gargantuan
financial burden of debt and other obligations. Having knowledge and a basic sense of
responsibility allows for careful thought and management, as to get a glimpse of what is coming
in the future (Bruin). It is important to teach students regularly over a period of time because

Park 6
studies show repetition over time helps establish long-term memory. The process of conversion
from short term to long term memory is improved by constant reminders and constant lessons, to
learn, relearn, review, and reinforce the knowledge until it is hardwired into long term memory
(Preston). Also, having regularly planned lesson periods allows for more time, more lessons, and
because these lessons are shorter than class periods, allows for a short time of effective,
concentrated learning. Implementing this system for all students, from freshmen to seniors over
the entire four years, will help people learn all aspect of financial literacy thoroughly. People
mature from time to time and come across an opportunities in their life in which they will
become more aware and more prone to want to learn how to deal with certain things. A common
example would be a 17 year old using a debit card with no income to an 18 year old, with a
credit card and an income (Harnisch). The additional condition will induce the student to learn
about management of a credit card, to help oneself better manage the newly acquired resources.
There are also other ways of increasing interest can be sometimes deemed
unconventional, but effective. Seeing fiscal success in others can encourage investment and
involvement from others (Blanco Interview). Social media is flooded with opulence, as
celebrities flaunt champagne valued at over ten thousand dollars and drive cars that cost as much
as mansions. Such display of lavishness incites and excites students want for financial success,
because it is deemed cool and because wealth is glorified. These students do not have a plan to
be filthy rich, and this step of financial management can help them get there. A component of
the want for extreme opulence is stirred by social media. On social media there are positive
results and displays of monetary success and people seeing success will get people interested in
the money they can make, hench the glorification of consumption (Kasser). Similar effects are
obtained by the news, as research shows that news of a bull market and a good economy

Park 7
encourages spending and investing, potentially increasing income and financial status (Mr.
Blanco interview). Movies about financial success, such as The Wolf on Wall St. and The Stock
Market increase awareness and interest in investments because again, it reveals investments to a
broad audience and desensitizes people to the risks and rewards of the stock market to encourage
involvement and instill interest. The sometimes inaccurate portrayal of the stock market and its
risks can attract participants with its aggrandized benefits.
The further incorporation of financial literacy into school systems of America will not
only increase general knowledge of students in managing financial resources, but will also instill
interest, and will positively impact the economy. It will not be easy, for it would have to be
incorporated into the existing, established school system, but once sections of students and
groups for financial advice sessions have been established, passion for learning and interest in
ones part in the greater whole, the national and global economy, will motivate students to go
beyond what is taught in school and branch off into their own interests. The integration of such
applicable, realistic tasks will give students a skill they will use outside of school, in hopes of
them transferring their interest and passion to others.

Park 8

Works Cited
"About - DECA Inc." DECA Inc. DECA, n.d. Web. 01 Mar. 2016. <DECA.org>.
"About FBLA." :: FBLA-PBL. FBLA, n.d. Web. 01 Mar. 2016. <FBLA.org>.
"Are Your People Financially Literate?" Harvard Business Review. N.p., 01 Oct. 2009. Web. 01
Mar. 2016. <https://hbr.org/2009/10/are-your-people-financially-literate>.
Collins, J. Michael Financial Advice: A Substitute for Financial Literacy? (2012). Financial
Services Review, Vol. 21, No. 4, 307-322. <http://www.ssc.wisc.edu/~jmcollin/FSR_12>.
Fuller, Jaime. "People Hate Politics. So Why Is Nobody Talking about Campaign Finance
Reform?" Washington Post. The Washington Post, n.d. Web. 01 Mar. 2016.
<https://www.washingtonpost.com/news/the-fix/wp/2014/08/27/people-hate-the-state-ofpolitics-today-so-why-is-nobody-talking-about-campaign-finance-reform/>.
Gerstein, Jackie. "How Do We Learn? How Should We Learn?" User Generated Education.
N.p., 07 Mar. 2015. Web. 1 Mar. 2016.
<https://usergeneratededucation.wordpress.com/2015/03/08/how-do-we-learn-how-shouldwe-learn/>.
Gilli, Lynne M. Maryland State Department of Education Implementation of Personal Financial
Literacy Education 4th Annual Update (n.d.): n. pag. Maryland Public Schools. Fall 2015.
Web. 1 Mar. 2016.
<http://www.marylandpublicschools.org/fle/docs/FinancialLiteracyEducationUpdate2015
.pdf>.
Harnisch, Thomas L. "Boosting Financial Literacy in America: A Role for State Colleges and
Universities." Perspectives (2010): 7-9. Aascu.org. American Association of State Colleges

Park 9
and Universities, Fall 2010. Web. 2 Mar. 2016.
<http://www.aascu.org/policy/publications/perspectives/financialliteracy.pdf>.
"Highlights." Maryland State Department of Education. N.p., n.d. Web. 01 Mar. 2016. <>.
"Howard County Public School System." Howard County Public School System Financial
Literacy Education Comments. Howard County Public School System Financial Literacy
Education, n.d. Web. 01 Mar. 2016.
<http://www.marylandpublicschools.org/fle/docs/FinancialLiteracyEducationUpdate2015.p
df>.
Kasser, Tim. The high price of materialism. MIT press, 2003.
Knight, Joe, and Karen Berman. "Are Your People Financially Literate?"Harvard Business
Review. Harvard Business Review, 01 Oct. 2009. Web. 10 Jan. 2016.
<https://hbr.org/2009/10/are-your-people-financially-literate>.
Mandell, Lewis. "Financial Literacy in the U.S. and Efforts Toward Credit Education."
The Impact of Public Policy on Consumer Credit (2002): 149-69. <"Financial Literacy in
the U.S. and Efforts Toward Credit Education." The>.
"Performance in Financial Literacy, by Students' Spending Behaviour, Before and After
Accounting for Socio-economic Status." 6 (2014): 28-46.Keepeek. Web. 23 Nov. 2015.
<http://www.aascu.org/policy/publications/perspectives/financialliteracy.pdf>.
Preston, Allison. "How Does Short-term Memory Work in Relation to Long-term Memory? Are
Short-term Daily Memories Somehow Transferred to Long-term Storage While We
Sleep?" Scientific American. Scientific American, n.d. Web. 1 Mar. 2016.
<http://www.scientificamerican.com/article/experts-short-term-memory-to-long-term/>.

Park 10
Smith, Lisa. "The Basics Of Financial Responsibility | Investopedia." Investopedia. N.p., 30
Sept. 2008. Web. 01 Mar. 2016. <http://www.investopedia.com/articles/pf/09/financialresponsibility.asp>.
"Taxes in United States. Income Tax, Federal Income Tax, Sales Tax, Property Tax, Estate Tax,
Gift Tax, Tobacco Tax, Alcohol Tax, Hotel Tax." Taxes in United States. Income Tax,
Federal Income Tax, Sales Tax, Property Tax, Estate Tax, Gift Tax, Tobacco Tax, Alcohol
Tax, Hotel Tax. Immihelp, n.d. Web. 01 Mar. 2016.
<http://www.immihelp.com/newcomer/united-states-taxes.html>.
"Top 10 Ways to Prepare for Retirement." Top 10 Ways To Prepare For Retirement. N.p., n.d.
Web. 01 Mar. 2016. <https://www.dol.gov/ebsa/publications/10_ways_to_prepare.html>.

Park 11