Extra Credit Union teachers support financial literacy bill
Governor Gretchen Whitmer signed House Bill 5190 on June 16 updating Michigan’s high school curriculum to include a financial literacy course for the first time in state history.
“I remember having a conversation with my own daughter and she was grumbling about algebra 2,” said Whitmer after her annual Macomb County address in Shelby Twp. last Thursday. “She said ‘Why do I need to know about quadratics? I need to know how to pay my taxes and my bills.’ That always stuck with me because it is really true.”
Adding financial literacy to Michigan high school curriculum is meant to help young people prepare for life in the workplace, plan a family, buy a house and make a personal budget.
“We know a lot of young people leave high school and never have the chance to really understand some of those fundamental aspects of being an adult and growing wealth,” said Whitmer. “So I think financial literacy is really important and I am so glad that we could get this done.”
Ashley Fordyce, Schools and Community Relations Coordinator for Extra Credit Union, applauds the bill and says she and her colleagues at the credit union, which was started by two Center Line teachers in 1954, are ready to assist instructors who will be teaching personal finance courses but may not have experience with the subject.
“I’m ecstatic about the governor signing the bill to be honest,” said Fordyce. “I anticipate there will probably be an uptick in requests, either to come in as a presenter or be a resource for curriculum. We have always had a mission of teaching youth to be financially responsible, so we are definitely in support of this financial literacy bill.”
The Extra Credit Union offers several free financial education programs and presentations for children of all ages. They coordinate with area schools and have been providing financial knowledge to students for several years. Many of the programs, some which are virtual, teach basic money management; everything from reading a grocery receipt to learning how to establish and maintain credit.
“We try to teach money habits that will make kids successful,” said Fordyce.
It is very common, Fordyce said, for teenagers to underestimate the cost of things. They don’t know what groceries run or how much it costs to have a cell phone because their parents are often paying for those things. Understanding the cost of things is the first step in helping young people develop a personal monthly budget.
“They might know the cost of a car payment, but forget that they are also going to need to buy car insurance,” said Fordyce. “The actual cost of things is always a big shocker to kids.
“Kids think they don’t have enough money to worry about personal finances right now, but it doesn’t matter if you have $100 or $10, you have to make choices about how you are going to handle that money. Sometimes, having more money makes the decisions harder.”
Children also tend to have a lot of confusion when it comes to credit cards. Many are not sure of the difference between a credit and debit card or how to establish credit or the meaning of a credit score.
“A lot of our programs are about learning to make choices,” said Fordyce. “We take students through life scenarios where they have to allocate funds to a certain budget and make choices about which kind of account to use. We show that you may choose to keep spending small amounts on something, but that might be preventing you from saving money to purchase one more expensive thing.”
Although family finances are likely discussed more openly than they were a generation ago, Fordyce said there is still a lot of basic personal finance knowledge that kids are lacking. Finance can be a sensitive topic, even among family members.
“Just having a savings account where you can earn interest is something that kids don’t know about if someone has not actually explained it to them,” said Fordyce. “Kids go to school, then they are out on their own and they’re just supposed to know these things even though no one has ever really explained any of it to them.”
Fordyce notes some schools, including Warren Fitzgerald and Warren Mott, already offer personal finance courses to high school students. Some schools offer such classes as part of the math curriculum while others have it in their curriculum as an elective. It is not yet clear how the new financial literacy bill might impact how those classes are presented, but regardless of how it is integrated, Fordyce knows it is needed.
“The average age of people filing bankruptcy is getting younger and younger,” said Fordyce. “We see at the credit union all of the time people coming in very young and already pretty deep in debt due to a lack of financial education. A lot of people learn by making mistakes in the financial world which is not always bad, but it can be significant. It is better to be proactive.”