Financial literacy is a sound investment

FACULTY and students at Foster High School in Tukwila are
trendsetters in a subject that is gaining interest and paying dividends.
In the midst of the current economic crisis, financial education is
like money in the bank.

Overdrawn puns aside, Washington Sen. Patty Murray picked Foster to
announce her legislation to promote financial literacy. The school is on
the leading edge of efforts to fill in the woeful and expensive
information gaps exposed by the housing bubble and credit crunch.

Consumer debt has swamped household budgets, Americans have little or
no savings and they are struggling to keep their heads above water with
mortgages they barely understood when they signed the paperwork.

Murray’s Financial and Economic Literacy Improvement Act of 2009 is
an ambitious effort to teach the next generation — and their elders —
how to better manage their finances. The legislation seeks to promote
age-appropriate courses and activities for two levels of students: K-12
and in two- and four-year colleges. States would apply for grants
totaling $250 million a year for five years.

The dollar amounts sound high at first glance, but the expense of
financial ignorance for individuals, communities and the nation makes
the investment a pittance by comparison.

Senate co-sponsors include Sen. Thad Cochran, R-Miss., who points to
the Mississippi Council on Economic Education as another model for
financial literacy. Available classes have names such as Financial
Fitness for Life, which provide the kind of foundation that can serve a
person for a lifetime. Other courses blend economics and mathematics.

Saving and investing are habits to be nurtured and promoted — even
the apparently radical notion of not making purchases until the money is
in hand. The other fundamental lesson is the money to be saved by being
a better-informed consumer of credit cards, health, life and auto
insurance, mortgages and student, car and consumer loans.

Financial literacy is a lot like defensive driving. Skeptical, aware
consumers can be taught, or they can be educated through the vastly more
expensive school of hard knocks.

Foster High School in Tukwila is leading by good example.

– The Seattle Times