The best place to learn solid financial behavior is at home. Although a kid’s environment at school and among peers is important in his or her development, the biggest influence on a growing child’s set of values is the behavior of the parents. Parents are role models, so in a perfect world, they are best suited to solve young adults’ lack of preparedness for handing the world from a financial perspective.
Parents, on the other hand, are often ill-equipped for this responsibility, so public school teachers are left to pick up the slack for parents who can’t or won’t be the role models necessary. The lessons aren’t difficult, but financial behavior is so embedded in life at home, poor models there can easily undo any lessons taught in a school environment. Although New Jersey updates its public school curriculum standards a few years ago to require 2.5 credits in financial, economic, business, and entrepreneurial literacy, the typical class is not going to be effective for establishing solid financial behavior.
Programs that teach financial literacy need to get creative. If there’s ever a chance for the banking industry to get involved with its future customers at an early age, this is it. Capital One sees the benefit in teaching young children how to use its products and is sponsoring the “Finance Park” program, coordinated by the non-profit organization Junior Achievement.
Finance Park is a mobile program for middle school students. After a few preparatory lessons in the classroom, the students visit one of these mobile stations and a Capital One bank branch. Students are assigned a family situation (single, married, with or without children, etc.) and a job, and are faced with simulations requiring financial decisions that have consequences. Due to a lack of preparedness in real life, most people learn how to manage their money “on the job.” But even in real life, the consequences of poor financial decision-making can be somewhat removed from the decisions themselves. The distance between cause (overspending, for example) and effect (not being able to afford a house due to high debt levels, for example) are so separated that learning on the job isn’t always effective as quickly as it would need to be.
Simulations can bring the cause and effect relationship into focus.
Capital One’s presence is significant in this program. The official name of the initiative is the “Capital One Junior Achievement Finance Park” with the necessary trademark symbols. Corporate involvement doesn’t stop with Capital One. There are more co-branded programs which one might expect to see corporations training young consumers to be life-long customers, in New Jersey alone:
Elementary school grades
- Our Nation® Sponsored by United Technologies
- JA More than Money™ (After-school Program) Sponsored by HSBC
Middle school grades
- JA Global Marketplace™ Sponsored by MasterCard Worldwide
- JA Economics for Success™ Sponsored by the Allstate Foundation
- JA America Works Sponsored by Pitney Bowes & The Literacy and Education Fund
High school grades
- JA TITAN (Internet based) Sponsored by Oracle
- JA Economics™ Sponsored by the MetLife Foundation
- JA Exploring Economics™ Sponsored by the MetLife Foundation
- JA Banks in Action™ Sponsored by the Citi Foundation
- JA Business Ethics™ Sponsored by Deloitte
- JA Careers with a Purpose™ Sponsored by HCA & John Templeton Foundation
Junior Achievement programs in other states have different partnerships.
Shareholders are often impressed with corporate involvement in positive social initiatives and happy when companies are beneficiaries of tax incentives for charitable spending. I am concerned about the effect of branding in education lessons for eighth-graders. Corporations should not be involved with the education of children, but these corporations have money to devote to programs like Finance Park. If it weren’t for corporate sponsorship, programs like these would likely not exist.
Corporations have been involved with public education since the 1920s, but the trend has increased in recent years. As the United States falls behind other countries in education, citizens look to blame this country’s public school system. We look to corporations that create charter schools as an alternative, with the idea that schools with a better funding source, corporate profits rather than taxpayer money, will help solve the educational crisis. Results show that charter schools have mixed results when compared with public schools.
The lessons in personal finance are important, so it’s a good thing that kids are getting the exposure to real-life simulations. Can it be done without corporate involvement and indelible branding at an impressionable age?
Photo: daveparker
Junior Achievement Finance Park, Stanford CREDO study
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While a consumer’s ability to use debit card spending as a way to build credit, I can understand why the reporting agencies don’t normally consider debit card activity to be relevant to a credit score. With a debit card, you can pay only what you have in the bank, or in the case of a prepaid debit card, only what you have on deposit. Debit cards do not provide a consumer with the opportunity to be tested with credit, and there is no monthly bill to pay. The type of behavior required to use a debit card successfully does not equate with the behavior required when borrowing money.
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