State promotes financial literacy in schools

Money talks and so do kids. So, financial experts agree that it’s time to talk to kids about money.

As more research arises indicating a growing need for financial education, more schools are adopting financial literacy standards. In an October 2020 study published in the Economics of Education Review, researchers found that when schools require financial education students achieve more positive financial outcomes — such as higher credit scores.

Today, Colorado leaders are advocating for financial education to better prepare students for the future. Colorado House District 52 Representative Cathy Kipp has been a longtime advocate for student financial literacy. 

In June 2021, Kipp led a team of bipartisan legislators in successfully enacting House Bill 21-1200, which outlines current financial literacy standards for high school students. Implemented by the Colorado State Board of Education, the standards include: budgeting and paying for higher education; applying for federal and state student loans; managing student loan debt; navigating homeownership; and credit management.

“The whole idea is to make sure the information is relevant to students,” Kipp said. “We want to empower them as they are figuring out what comes after high school. What steps can they take that are financially viable and reasonable for them? How do they meet the goals they want?”

Similar standards were first introduced in 2008 under House Bill 08-1168, but the bill was broad at the time. Kipp said the standards are much more pertinent now and, to ensure applicability, there is a partial review every two years. The first review will occur before the end of the year. While Kipp acknowledged that not every district can require financial literacy credits to graduate — due to cost restraints and teacher retention — she did add that interested schools can access the Department of Education’s online financial literacy resource bank to alleviate the workload.

Visit www.cde.state.co.us/cofinancialliteracy to learn more about the financial literacy resource bank.

Close to home

Roaring Fork High School (RFHS) English teacher, Denise Wright, happens to be passionate about financial literacy. Since 2015, she has taught the school’s elective and believes this information is some of the most important knowledge a student can learn in their academic career.

“Every single student that leaves my classroom will at some point have to budget, pay taxes, maybe get a loan and figure out how to pay for things,” Wright told The Sopris Sun. “This is something every single student is going to need to do.”

Wright said that prior to enrolling in the course, many of her students had a vague understanding of personal finances, noting that stock market and retirement plans were abstract concepts for them. She found that personalizing the material with her own experiences, and tailoring the coursework toward her students’ interests engages them and makes the material more approachable.

Throughout the semester, students complete projects such as building a business plan, calculating the cost of a preferred college and playing a mock stock exchange game in a fun classroom environment.

Emphasizing the long-term value, Wright said she often receives phone calls from former students asking about taxes or homeownership.

A former student, Jorge Sandoval, said that before starting his two businesses (Aspen Christmas Lighting and Punchbowl Power Washing), he spoke with Wright about a business plan and how to start a limited liability company.

“I also talked to her about purchasing homes,” Sandoval added. “I ask her for any help I need or information that I’m not sure about. She’s helped me throughout my whole life and I’m grateful for the connection.”

Sandoval added that even though it has been four years since he took the course, it is still relevant.

“It has honestly helped set me up for the future,” he said. “I understand how I can use the market — like that my S&P [Standard and Poor’s] 500 and my Roth IRA [Individual Retirement Account] can be in the same portfolio which is something I never knew. Now I can keep my savings there for the future.” 

Bianca De La Torre, who took Wright’s elective last year and owns a few stocks herself, said, “Financial literacy gets you into the real world,” and that the skills can help students beyond the classroom. She added that not every student wants to attend college, and financial literacy can help them navigate other ways to be successful.

“Life revolves around money, and knowing how to make budget charts or open a business is important,” De La Torre stated.

Regardless of one’s future career path, it is agreed that financial literacy for our youth is imperative. Wright is currently advocating to make the RFHS elective a requirement to graduate. She said it will help our youth and our community.

“Financial literacy is the great equalizer,” she said. “It is the cornerstone for everything else they are going to do in life…No matter where they are on the financial spectrum, they have to learn how to manage it effectively so they can have financial security and success, however they define that.”