I.D.

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Period 3
PAA CP English; Mrs. Baker

Financial Literacy and the Reasons There Should Not be a Change

Over the years, people have been thwarted by the nooks and crannies of Finance and the
Financial world. School systems now believe that it is their responsibility to teach kids about
finance through mandated classes. There is much controversy between the Board, teachers, and
students on whether or not we should implement these classes into the High School requirements
to graduate. It is thought that these classes will prepare students for the “real world” by creating a
simulation of life inside of a classroom. This solution, however, would be ineffective in several
ways at achieving its purpose. There are no statistics of this actually working in any school
environment, it would be the most cost effective choice and will not equate to what it is worth, and
it can present false senses of reality and security for students. The Modesto City School System,
should not implement these new classes and requirements, for these reasons.

These courses, in the past, have proven to be very fruitless when it comes to producing
results. “She sights examples, such as the high school students who took a semester-long personal-
finance course and tested worse than those who didn’t. Or the graduate retirement-planning classes
who thought their literacy had increased, when their financial test scores had not” (Paragraph 9).
This snippet of the article, “Financial Education Leaving Americans Behind” by Greg Burns, is
referencing an 85-page work written by Lauren Willis. In her work, she sights and backs her claims
through data on how financial literacy shows no evidence of being successful and how its designed
to look as if it does work, but it is based on biased and voluntary data. We would essentially be
implementing new classes and new teachers with no benefits and more set-backs.

“…A required course,” as stated in the article “Finance Course Prompts Debate” by Gina
Davis, “would necessitate about 10 teachers each year and cost the system about $600,000
annually”. If we think about our already falling budgets in schools, we find that there is little money
to go around spending on large projects such as this. This can lead to budget cuts, loss in activities,
and even layoffs: supposing that we do not have the money or if the program does not pay for
itself. We also have to remember that many students would rather take other elective classes then
be inside a mandatory finance class, causing a disinterest in the class, and leading to students
simply wanting to pass, retaining next to no information.

One of the biggest problems of this education is the fact that it creates a hologram of
reality. Students begin to feel that the world they are entering is exactly the same as the classroom,
all neat and without outside influence. However, the world we live in is chalk full of unexpected

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outcomes, and an enclosed simulation can never be like the real thing. In quoting Greg Burns
once again, “… they may actually hurt, in part by making their graduates overconfident about their
limited skills”, we find that the students begin to presume that finance is as easy as the class makes
it out to be. As reality follows expectations, students begin to revert back and the education gained
is gone in no less than a couple of years.

Yet, while opposition to these courses is definite, there are other ways to educate people in
the ways of finance. In Richard Thaler’s Article “Financial Literacy, Beyond the Classroom” he
points out ideas which more inventive and effective, such as Just in time education or rules of
thumb (like “save 15 percent of your income”). This way, the education is retained, and students
would be more likely to carry it with them into adulthood. Even making the financial system more
user friendly would be a more direct approach to mending the swindling and knowledge gap.

Despite this pragmatic situation, there must always be a voice of reason inside any
community. It tells us to do further research and reveals matters that could harm the next
generation. Next comes the information that saves money, future education, and the students that
the school board tries to protect. Financial Education would be a waste in several aspects and it
would be wise to stay away from it.1

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