This column will conclude our series, during Financial Literacy for Youth Month, on what high school students can, and, in my opinion, should have to learn in a required personal finance class. Of course, there is no reason why middle school students cannot be introduced to many of these lessons on a more basic level, which is why I have been invited into many more middle schools than ever before.
So here comes the ACTION ITEM. If you are in a school district that does not have a personal finance class as a requirement for graduation, send this series to the high school administration and the school board members. Until they act on this important issue, share this series with your high school age children and grandchildren, and encourage them, or should I say, require them, to take a personal finance class as an elective, if one is offered. If one is not even offered — REALLY!
Let’s return to the NEFE Financial Planning Program module on Financial Services.
$ CHECKING. Here students learn the ins and outs of a checking account. Some of them learn that, yes, they still exist and will for at least a while in the future. They learn that it is an important vehicle for direct payroll deposits, for tracking spending, and for, at times, having an important record of payment. In addition, they learn the basics of depositing, writing and endorsing checks, and using a check register. They also learn about guarding against check fraud, the importance of not writing a check without the funds on deposit, the pros and cons of having over limit protection, and the need to balance the account on a monthly basis.
Students learn about truly free checking, as well as accounts with a minimum balance, the requirement of having at least one direct deposit made to the account, or those with a maximum number of checks per month. In addition, they learn about all of the possible associated fees, like monthly maintenance, stop payment, transfer, insufficient funds and check return fees. Finally, they learn about electronic funds transfers, e-checks with a computer or smartphone, online banking options, other payment options (like certified checks, cashier’s checks and
wire transfers), and bank clearing procedures.
$ DEBIT CARDS. Here students learn about using a debit card as a debit or credit card, the ability to get cash back with a purchase, the range of possible fees that can be incurred, the pros and cons of having over-limit protection, purchase refund options, and the importance of always knowing the balance in the account that your debit card is tied into. Students also learn about the ins and outs of gift cards, prepaid credit cards, and reloadable cards, as well as their advantages and disadvantages. They also learn about the advantages and disadvantages of traditional banks, credit unions, internet banks, and alternative, often predatory, financial services, like check cashing establishments, payday loans, and pawnshops.
$ AUTOMATED FINANCIAL SERVICES. In today’s world, they learn all about online and mobile banking, paying by phone, email and text account status alerts, the numerous apps that they can utilize , and avoiding fraud in the new world of ever advancing technology.
Let’s turn, now, to the last Module, which is insurance.
$ INSURANCE. This is the opportunity for students to learn the basics about insurance, including that it is a way to share the risks of the variety of losses that they may suffer as they go through life. They learn about the need to have an insurable interest in order to insure a specific loss, and that it comes with the need to pay a premium, and possibly a deductible, which, if higher, may lower the premium. The insurance module also covers the different kinds of insurance, including, liability, property, homeowners, renter’s, disability, unemployment, health, workman’s comp, and life insurance. They also learn the need to read any policy very carefully and in detail, in order to understand what is covered and what is not covered, when notices or formal claims must be filed, and how to make any claim. In that regard they learn about claims adjusters, replacement vs. actual cash value, and appraisals. In addition, they learn about having appraisals and photos of your property for property insurance, and the dangers of insurance fraud.
Students also learn how to compare apples to apples when shopping for insurance, and the advantages of bundling, as well as the need to be aware of any available discounts, like various
safe driving and safety equipment discounts. In addition, they learn the need to re-quote their insurance policies periodically.
$ HEALTH AND AUTO INSURANCE. Because these are such important topics for young people, a lot of time and discussion is spent on them. When it comes to health insurance, they learn about employer provided plans, deductibles, co-pays, co-insurance, out-of-pocket expenses and maximums, and the advisability of staying healthy in mind and body, including things like avoiding smoking. When it comes to automobile insurance they look at some of the many factors that can affect your premiums, like your age, your prior driving record, how much you drive, where you park, what kind of car you drive and more. In addition, they learn what to do in the event of an accident.
In each of the modules that we have covered in this series, there are many more topics addressed and discussed. As I have said, who would not want their high school student to have the opportunity to learn these things by taking a personal finance course? In addition, what school board or administration would not want their high school students to learn these things?
Going forward, I will suggest to the teachers that I do high school CARE financial literacy presentations for, that they consider attaching this series to the Top Ten Lessons that I use, and send the package home to have their parents read it, and then start some family conversations about finances.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo.