Schools Bank On Teaching Kids How to Save

Programs sponsored by financial institutions and nonprofit groups provide teaching materials and introduce students to financial professionals. That benefits schools, but banks benefit, too, according to Barbara O'Neill, a personal finance professor at Rutgers University. They build loyalty in the next generation of customers.

"The cons are you are exposing kids to branding, even though it may not be overt," O'Neill said.

Stephen Brobeck, of the District-based Consumer Federation of America, said schools should vet the teaching materials produced by financial corporations to make sure they are high quality. His litmus test is to glance at the credit card lesson to see if it clearly advises youngsters to pay off the entire balance each month.

"If the materials are really good and the branding is limited, we won't object," Brobeck said. "If it's a good program, they ought to get some credit for it."

More advanced lessons discuss the nuts and bolts of finance: certificates of deposit, stocks and bonds. But for the youngest children, it's all about attitude.

One recent evening at Little Run Elementary School in Fairfax, Rachel Powell of George Mason University's Center for Economic Education talked in very simple terms about saving to about 50 students and parents.

"The secret about saving," Powell told them, "is you get to spend later."

She asked students to think of an item they could buy that day if they emptied their piggy banks and something they could buy if they saved. Hands shot up. A football jersey and nail polish were among the "buy nows." The dream purchases: a white Mustang, high-heeled shoes and "the biggest Bionicle in the world." (Bionicles are Lego action figures.)

"If we spend every penny on bubble gum, we're never going to get the white Mustang," Powell said. The same concept, she said, will apply to smart money management in 15 or 20 years, when they are shopping for cars and houses and considering retirement plans.

"We can't have everything we want," she said. "That's something 6-year-olds don't have any problem wrapping their brains around."

William Crosswait, 11, left the session thinking about the coins in his parking meter-shaped bank. He earns an allowance sorting laundry and doing other chores, but he realized he'd better stop buying Legos if he wants a new skateboard.

"I didn't know much about money when I came here," William said. "I think I'm definitely going to work on the savings."

This year at Malcolm X Elementary School in the District, students learned about bank accounts and the importance of good credit in the Banking on Our Future program. Volunteers, who can include bankers, accountants and graduate students, meet with students during four hour-long sessions.

Pamela Jones, a school counselor, said she knew the information was sinking in when she overheard students talking next to a vending machine filled with tempting snacks. "I heard children say, 'I'm not spending my money there -- I'm saving it,' " Jones recalled. "You knew they were getting it."

Marquita Friday, of the Maryland Education Department, said that today's students face an increasingly complex financial future in which they will have to choose among health insurance and retirement plans. Not to mention credit card offers, which will soon be bombarding them. She said the state is crafting lessons to replace or enhance those in middle school family and consumer science classes.

"Finances are more difficult to manage than they were 15 years ago, so we really want to make sure what we're doing is current and relevant," Friday said.

Next month, the Virginia Board of Education, in response to the 2005 financial literacy law, will start training teachers to present new money lessons -- woven into math, social science and other classes.

Tatevik Markaryan, 10, who arrives early at Sunrise Valley Elementary each Tuesday to work as an assistant bank manager, said she's learned some basics already. She used to take the cash she earned as a babysitter's helper to the mall. Now she'll spend some and save some.

"Sometimes I regret what I spend it on. I think, 'I spent $20 and all I got was hair things,' " Tatevik said. "Now I can come to the bank and just put it in instead."