By Tony Wittkowski | Business Reporter | The Herald-Palladium
ST. JOSEPH — Standing before his classroom on a Wednesday afternoon in early February, Ted Hendricks writes a story problem on the white board.
It’s only the third time this personal finance class has met this semester, but his students are about to learn one of life’s hardest lessons: How to save money.
Hendricks’ personal finance class, which he’s been teaching for more than 20 years, seems to always draw interest from students each year.
“I go through everything I did wrong or everything I learned from and try to open up my life so they don’t make the same mistakes I did,” Hendricks said afterward. “It gives them a better insight. I tell them, ‘Your parents don’t tell you things sometimes. I’m an open book.’”
College graduates these days are considered the most tech-savvy of all time. However, many have trouble balancing their own checkbook.
A new study conducted by George Washington University confirmed millennials have a low level of financial literacy, which could hurt the economy.
The study broke down the financial characteristics of more than 5,500 people born between the early 1980s and the mid-1990s. Of the group of millennials surveyed, only 8 percent answered five out of five questions correctly and 24 percent answered three correctly. With this dilemma in mind, more schools are looking to add financial courses to their curriculums.
When Hendricks came to St. Joseph High School, he inherited a year-long records keeping class.
“The students were bored and I was bored,” Hendricks said. “I had personal finance when I was in college, so I convinced the school to turn it into the class we have today for only one semester.”
Hendricks tweaks the curriculum for his finance class every year because the material is ever-changing.
He hasn’t used the book that comes with the course for a few years because there are better resources out there. Fifth Third Bank provides the class with a financial literacy course that was created by Dave Ramsey – the guru of personal money management.
Hendricks said he uses Ramsey’s material supplementary with his curriculum.
“The kids know there are some Ramsey things I enjoy and some Ramsey things I discuss that I’m a little different on,” Hendricks said.“He doesn’t like to use escrow, but sometimes you don’t have a choice.”
Dollars and cents
At Bridgman High School, students are offered business math, accounting, business management, economics and college economics.
Among those financial classes, Principal Chris Machiniak said, the one that seems to teach more about real-life experiences is business math, which incorporates Ramsey’s many teachings.
The year-long class has become a popular choice among Bridgman students the last couple of years, as it doubles as a senior math class.
“They talk about mortgages, business wages and budgets,” Machiniak said. “They go through loans and talk about some of the things Dave Ramsey does. One of the credit unions got us set up with that curriculum.”
Berrien Springs High School is in the process of evaluating its curriculum, and Principal Ryan Pesce said they are looking into adding more financial classes.
Pesce said the school added a personal finance class in 2011, about the time the state required schools to provide math classes for seniors. The high school’s accounting class was cancelled, but Pesce said the district is trying to bring it back.
“We had an accounting class, but I don’t think there was enough interest. Everything is decided on what course will gain the most interest,” he said. “This is an important subject when you look at kids who have financial debt from student loans. The financial ramifications of making mistakes early are huge.”
Machiniak said he believes students should learn the basics of the financial world in middle school, especially when it comes to checking and savings accounts. As far as the stock market and investing funds, Machiniak said it’s best to wait until the later years in high school to ensure students can comprehend everything.
“Some of these kids are dealing with car loans by their senior year,” he said. “They have to understand what is going into these things by that point because they have college coming up.”
Difficulties teaching finance
The concept of time is an important thing to remember in Hendricks’ class.
He preaches to his students nearly every day that time can be the biggest factor on an investment’s return. When Hendricks goes over a story problem with students during their first week in class, many make a mistake by not adding an extra year into the equation. The story problem proves it can never be too early to begin saving.
“It’s too above them right now. It’s not on their radar as one of the biggest issues,” Hendricks said. “Right now they’re thinking, ‘What’s for lunch today? What did someone just Snapchat me? What am I doing this weekend?’”
Some students don’t take Hendricks’ class because they are not interested while others simply have too many commitments and a loaded class schedule.
“A lot of our kids don’t have the time in their schedule to do it,” he said. “I used to have seven sections at one point, but now I’ve got two. They either don’t have the time or they don’t know the benefits.”
Lakeshore High School Principal Brad Brunner said the personal finance class uses the Ramsey curriculum, and it has become a popular choice among students.
However, Brunner believes the trick to being more fiscally responsible comes from other math classes as well.
While reading a report from the Wall Street Journal, Brunner discovered the people most responsible with their finances continue to take regular classes in high school and college – regardless of their major. The simple building blocks of algebra and calculus go a long way, Brunner says.
What remains to be the biggest challenge is getting students to understand the value of a dollar.
“There is a theory called ‘The Future Self,’ where the student makes decisions that are better off for them down the road,” Brunner said. “That part of their brains at 18 is nonexistent. Getting them to understand they will make decisions now that will affect the rest of their lives is the main hurdle.”
There’s still time
Among the other findings in the GWU survey, 30 percent of millennials have overdrawn their checking accounts, and 42 percent used “alternative financial services” such as pawn shops, auto title loans and payday loans.
As of today, four out of five millennials have major debt.
Millennials’ heavy debt burdens are causing them to compromise their future security. Some 17 percent of those with a retirement account took loans against it in the past year, while 14 percent took out a hardship withdrawal.
Schools are already teaching the newest set of students known as Generation Z or Boomlets, for those born after 2001.
Mackenzie Holden and Dylan Lawrence are both St. Joseph seniors who took Hendricks’ class last semester.
Holden said she expected the class to go over the basics on the stock market, but was surprised to learn about things like building one’s equity and buying a car.
“I thought it was going to be a lot of how to write checks and open a bank account, but it was a lot more real-world situations,” she said. “We did a lot of mock interviews and even had a unit on how expensive weddings are. Ever since I got a job my sophomore year, my dad has been hounding me about putting money away.”
Lawrence was recommended the class by his father, as both his older siblings took the class and have benefited greatly.
Both students said they feel more comfortable with student loans looming and are prepared to buy a car or rent that first apartment.
That comfort was established through a more hands-on lesson with Hendricks.
“They helped me buy a car. They knew exactly what dealer I went to, they knew what kind of interest I paid,” Hendricks said. “It was a great opportunity to address a person’s credit score. From there we learned what the credit score affects and how to maintain it.”
Lawrence added: “Before taking the class I probably would have wanted my first car to be a really nice one. Now I’ve learned that it’s probably not the best idea to do that. I mean, we even learned what we should buy for our kids’ first car.”
At one point, Hendricks had students create a life page. It had them examine what they needed as an adult and where they wanted to be at a certain point in life.
Hendricks said the state is moving in the right direction as they are considering a mandated financial literacy course. The course hasn’t been put in place, but Hendricks remains hopeful when the state revamps graduation requirements.
“There wouldn’t be a high school curriculum for Dave Ramsey if there wasn’t a problem out there,” Hendricks said. “When I tell the parents there is going to be a Ramsey curriculum involved in my class, it hits home right away. People are backwards on debt and they know it.”
(Author’s Note: This article was originally published on Feb. 7, 2016)