MI Lawmaker, Credit Unions: Youth Need Financial Education
A bill before the Michigan Legislature would bring financial education into the state's public schools, by requiring high school students to take a course in personal finance.
The legislation passed the Michigan state House with bipartisan support, and is now before the state Senate.
Wisconsin introduced a similar bill last legislative session. It failed to pass.
Rep. Diana Farrington, R-Utica, a bill sponsor, said student-loan debt and credit-card debt are high, and many are not saving for retirement like they should. She hopes having financial education in school could help them make the best possible decisions.
"If you're not learning at home, or teaching it to yourself, it's a topic that can be missed," Farrington pointed out. "And financial education is so important in building a set of skills and good habits for our young adults in their everyday life."
April is National Financial Literacy Month, and Farrington encouraged teens and young adults to talk to their families and their local banks or credit unions and ask questions about financial matters, so they can learn the skills before they need to put them to use.
Beth Troost, executive director of the Michigan Credit Union Foundation, noted credit unions have existing programs to complement a financial education program in schools. She said many credit unions operate what they call student-run or in-school credit unions, where students from elementary school to high school learn to save and plan by making deposits into accounts at their school. She added Michigan credit unions hod "financial reality fairs," an experiential activity where students simulate budgeting for a month.
"They make the decisions on their consumption for food and housing and clothing and everything they need to do on a budget," Troost explained. "And they end up balancing their budget at the end and talking to financial counselors. So it gives them a real slice of reality about what independent financial life is going to be."
Troost added from spending, saving and planning to borrowing and investing, it is important for people to be familiar with the concepts at a young age, so they can build on them through each stage of their lives.