PenChecks Blog

A Little Education Goes a Long Way

In my previous blog, I suggested that the Benefits Consulting and Financial Services Industry could benefit everyone by working with the schools to teach kids basic financial and money management skills. My thought was that we could reverse a troubling attitude I see in today’s younger generation.

When it comes to saving for retirement, “Why bother? The government will take it, ruin it, or spend it all” seems to be the prevailing mindset of many. Considering how the government has made saving for retirement so complex, I can understand this point of view. Nevertheless, I believe we can change this attitude through education, and that we can do it starting at a very young age.

If this sounds like some sort of pie-in-the-sky notion, I can tell you from personal experience that it has already been done, and with great success!

Welcome to Galloping Grove
When my children (now grown) were in elementary school in La Mesa, California, their school district offered a remarkable program that taught basic life and financial skills. Once a week, students in grades one through six would take a trip to “Galloping Grove,” a play town consisting of a bank, grocery store, library and technology store.

At each store, the students received an assignment based on their grade level. For example, in the grocery store first-grade students would learn very basic skills such as how to buy and pay for food items. At the bank, they would learn what a bank is and what it does. As the students got older, they would learn fundamental financial skills, such as how to write a check and balance a checkbook.

And it wasn’t just pretend. Parent volunteers built actual storefronts that looked like a bank, a technology store, and so forth. The grocery store had real shelves stocked with real canned goods. The kids would put items in their baskets, check out, and pay with play money. In the process, they learned basic math and reasoning skills that apply to the real world.

Age-Appropriate Financial Lessons
As students moved up in grade level, the sophistication of the lessons advanced with them. Junior high students began learning more complex financial concepts, such as how stocks, bonds and mutual funds work. High school students learned why it’s important to invest for retirement, how compound interest works, and what happens if you consistently invest money over 20 or 30 years.

I was so impressed with the impact the program had on my children that I volunteered to teach money management and wealth creation to a 10th-grade civics class at the local high school. We covered a variety of financial concepts – everything from how to reconcile a bank statement to how Wall Street works. And we wrapped up the class by learning about compound interest and how to build wealth by investing with discipline over long periods of time.

To this day I still get the occasional letter from former students, thanking me for the class and reporting how much they have already saved.

Advocates for Education
Unfortunately, the school district eliminated the Galloping Grove program (over the loud objections of many parents), and to my knowledge nothing has ever replaced it.

So I would like to offer a challenge to the retirement industry. Let’s be proactive about educating our clients, present and future, by developing a curriculum to be offered in the grammar, middle and high schools. I’m not suggesting we attempt to turn every kid into a stockbroker or financial whiz. But I believe it’s critical that we teach the basic money management skills that schools are currently not providing.

I would love to see a hands-on experience like Galloping Grove. But with today’s technology we could easily create online curriculums that could supplement or take the place of live classrooms. At the least, we need to begin advocating for some type of education, starting at a very young age. That way, 10 years from now we might be talking to people about how to improve their investment choices rather than struggling to get them to understand the importance of saving.

Peter E. Preovolos
President and CEO
PenChecks Trust

4 Responses to “A Little Education Goes a Long Way”

March 16, 2016 at 5:58 pm, Steve Greenbaum said:

Peter,

Kudos! I agree completely.

Steve

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March 16, 2016 at 11:18 pm, Sheldon Smith said:

Peter – I know we have discussed this and that you have heard me speak about doing this several times. No need to reinvent the materials. Please see:
http://www.actuarialfoundation.org/programs/youth/buildingyourfuture.shtml. This is a great idea and needs to be accomplished.

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March 17, 2016 at 1:16 pm, Pat Burris said:

I totally agree! Junior Achievement has a number of programs already established that teach personal finance, budgeting, money management etc. Perhaps the place to start is to get more schools / organizations involved with JA.

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March 21, 2016 at 9:05 pm, How Much Do You Really Earn? - PenChecks Trust said:

[…] can read more about my ideas on this subject in our two most recent blogs, It’s Time to Teach and A Little Education Goes a Long Way. The key is we need to start educating students about the importance of saving for retirement, and […]

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