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YAKIMA -- Eduardo Mejia was clueless about money. He never heard of interest rates and finance charges. He didn't know how to budget his income, yet alone invest it. Credit cards, too, were a mystery.
Luckily, the 17-year-old has taken a personal finance class at Davis High School the past two years. Through the class, he's able to work at his school's student-run credit union, learning about loans, deposits and other money matters. When he graduates next year, he knows he'll be ready for whatever comes his way.
"I didn't know about credit, debit, any of that," Mejia said. "Now I feel prepared to save for college."
Mejia's level of financial know-how isn't typical for someone his age. According to a recent study by the JumpStart Coalition -- a nonprofit group that promotes the need for financial education -- Washington's high school seniors have a lot to learn.
Across the state, 300 students were given a 31-question, multiple-choice quiz that tested their knowledge on everything from income and money management to savings and spending. They answered only 48 percent of the questions correctly -- down from 52 percent in 2006.
Pam Whalley, a member of the JumpStart board and president of the Washington Council on Economic Education, isn't surprised by the results. In fact, she expects them to get worse.
"I don't see how it can get better if we don't give our kids the skills they need to survive in the real world," said Whalley, who also teaches at Western Washington University in Bellingham. "Teachers need the opportunity to be able to integrate it in their curriculums."
It's a complex world
The world has become much more financially complex in the last decade, Whalley said. Not only must young people know about stocks, bonds and checking and saving accounts, they now have to research the pros and cons of different medical and retirement plans.
"In an ideal world, parents would educate their children about personal finance, but the problem is most of us are ill-prepared to do so," she said. "If parents don't feel qualified, then it needs to be taught in schools."
Whalley believes personal finance should be part of the required K-12 curriculums. It can begin by teaching children the value of saving. As they get older, they could gradually learn more tools in their core reading, writing and math classes, she said.
The hands-on applications would excite and interest students, Whalley said, helping them make informed decisions on everything from taking out a loan to applying for a credit card.
Stacy Augustine, a member of the JumpStart board and vice president of the Washington Credit Union League in Federal Way, couldn't agree more. When students are taught percentages, they could learn about interest rates, she said. When they're taught about compound interest, they could learn how much time they'd need to pay for a car.
"I'm really sympathetic with how much students have to learn and how much teachers have to teach," Augustine said. Students "can be taught in context with things that have to be taught."
On the surface, this approach seems simple, said Kristin Johnson, an alternative social studies teacher at West Valley High School. But putting it into practice is something else entirely.
To teach new curriculum often means something else would have to give, she said. Either the required lessons wouldn't be taught, or, because of budget constraints, an existing class would have to be dropped to make way for a new one on finance.
"As a teacher, you'd have to choose not to teach district-mandated education," she said, citing the Washington Assessment of Student Learning as one example. "Any class we teach kids has to help them meet standards."
Davis opens credit union
With school districts pinched for money, area businesses are lending a helping hand. One example is the student-run credit union at Davis.
The Yakima Valley Credit Union created the branch in 2004, after managers were approached by a Davis teacher. Through the offering, students learn the ins and outs of accounting. They also spend time behind the teller desk to process deposits and loan applications. The credit union serves students and staff during the school's lunch hours.
Since its inception, the branch has opened 500 accounts and processed $250,000 in staff loans, said manager Lydia Hester. The class is now filled to capacity with 15 students.
When she began teaching, Hester said she was astonished by how little her students knew. This forced her to start with the basics, showing them how to write a check, balance a checkbook and budget money.
After a while, her students are taught more complex concepts, such as what to look for in a credit report and how to shop wisely, she said.
"There is so much pressure on them to learn other things," said Hester about why so many students are financially illiterate. "They just don't have time."
Debra Hickman, vice president of marketing for the Yakima Valley Credit Union, said the reality of the problem is scary. If schools aren't educating children on money matters, and if parents lack the knowledge themselves, she worries about the choices children will make as adults.
The lack of training could help explain why the nation is experiencing a mortgage crisis, she said.
"There needs to be a class on real-life situations," she said. "Managing money will be something they do their whole lives."
A stressful situation
Aubri Gonzalez is all too aware of what lies ahead. She, too, is taking part in the student-run credit union at Davis this year, for which she is grateful.
Now 18, she said there's been a lot on her plate the past couple of years -- including the ACTs, SATs, WASL exams and senior projects. Her peers experience the same demands, and many of them have part-time jobs, she said.
The thought of taking on another burden becomes overwhelming, she said.
"They're probably focusing more on the WASL than all of this," she said. "It's so stressful. We basically don't care about this. We have so much other stuff."
This mindset is why Whalley is more determined than ever to change the educational system. She believes teachers will become enthused about integrating the material into their curriculum once they have an opportunity to view it.
That's why organizations such as hers -- the Washington Council on Economic Education -- provides free financial training and handouts for teachers. The participants share the information with other Washington educators, who, in turn, share it with their own students.
Johnson, who teaches at West Valley High School, recently took part in such a training. Through it, she learned there are huge differences with how high schools approach the topic. While personal finance isn't a part of the curriculum at her school, she learned other schools teach the subject through elective offerings. Still more require students to complete such classes to graduate, she said.
Because of her training, she said she was given the go-ahead to create a new class next year -- and she hopes students will see the need to take it.
"It will be an elective," she said. "Give it a flashy title, and I think kids will choose it."
Besides teacher training, other positive steps are being made to improve financial education -- including the creation of the Washington Financial Literacy Work Group this year. Its purpose is to write a report detailing what financial literacy and educational programs are needed.
This work is important, but Johnson and Whalley believe changing legislation is key to any substantive change.
"District budgets are stretched very tightly right now," Whalley said. "Districts are struggling. This can't be another unfunded mandate. This has to be something with support."
* Erin Snelgrove can be reached at 577-7684 or esnelgrove@yakimaherald.com.
