Running head: FINANCIAL LITERACY OR THE LACK THEREOF 1

Financial Literacy or the Lack Thereof

Hannah J. Thompson

Global Studies and World Languages Academy at Tallwood High School

 FINANCIAL LITERACY OR THE LACK THEREOF 2

Abstract

This paper was researched and written with the intent to find an answer about the state of
financial literacy in the first world, the effectiveness of financial education methods
implemented, and how these two factors contribute to retirement preparedness. The study
analyzed the levels of financial literacy in the first world, stratified by age groups, or cohorts,
specifically, Baby Boomers, Generation X, and the Millennial generation, then cross-examining
the related levels and methods of financial education most commonly received in each cohort,
referencing census and private institutional findings on the retirement preparedness of the Baby
Boomer cohort, the eldest and nearest to retirement to predict the effect of changes in retirement
management and financial literacy levels over time on the preparedness of subsequent cohorts.
The findings indicated that although more widespread formal, requisite financial education had
presented, the levels of financial literacy did not appear to have increased, and some data even
reflected negative effects on understanding. Based on these findings and the estimated large
number among the Baby Boomer cohort of fiscally unprepared individuals, should retirement
planning continue to be shifted to the hands of the individual, future generations would not fare
any better, if not worse in retirement, if more effective methods of education are not applied.
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Table of Contents

Abstract ... 2

Introduction ... 4

Limitations ... 5

Literature Review ... 6

Discussion ... 9

Conclusion ... 13

References ... 14

Appendix ... 15
 FINANCIAL LITERACY OR THE LACK THEREOF 4

INTRODUCTION

More than half of Americans are one emergency expense away from financial destitution,

more than three quarters of Americans live paycheck to paycheck, the weight of fiscal

responsibility and financial burden are heavier on the individual than ever, and across the board,

financial literacy is very, very low. For most of the 20th century, and into the 21st century,

personal finance education has been lackluster at best, with the most effective education coming

at the college level, in optional courses. For most of the 20th century, many of those Americans

with career jobs could trust in their employers to manage their pensions, their retirement, their

futures. Then, in the early 80’s, came the 401(k), an easy option to shrug the responsibility and

stress onto the shoulders of the employees, and shrug they did. With this burden of responsibility

and stress came the expectation of self-control and financial capability, as the success of a

defined-contribution retirement plan is based almost solely on the employee. Financial education

from this period until now, however, has yet to show effective results, as studies show that most

Americans feel unprepared to handle their retirement savings, and even among those who are far

from retirement age, no signs of greater confidence or proficiency in finances are observable.

Thus, in an increasingly technologically and scientifically advanced world, much of the

population of the most developed countries still face major problems with as basic concepts as

understanding interest on a credit card. This huge deficit in numeracy and financial literacy in the

world’s most influential countries leads to very low proportions of the population who are

sufficiently prepared for retirement or even prepared to begin saving for retirement, and can lead

to major economic consequences, globally, if more effective indoctrination methods are not

established.
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Limitations

Limited Resources. This report will not include the conduction of longitudinal studies

observing the effect of financial education from childhood to adulthood, particularly retirement

years, as the concept of financial education had not been present and prioritized to any degree.

This report is also limited in the scope of access to valuable data as a result of the privatization of

published scientific data and the lack of budget to afford access.

Scope of the Research. The data being evaluated will not address the pursuit of wealth beyond

subsistence and minimum savings for an emergency or retirement. The author will also not be

evaluating the reasons why the societal perception of responsibility is changing. The data will

also not address methods of indoctrination which are used on primary school students. This

report will not address less-developed or undeveloped countries, as they are predicted, on

average, to not practice savings or retiring, beyond subsistence.

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Literature Review

Retirement Savings and Financial Literacy

Around the world, in developed countries, there is a growing problem with the lack of

financial literacy and education, as it becomes a greater detriment to retirement preparedness and

risk-taking skills. Regardless of the development of the markets referenced, there is a clear trend

of low understanding of financial planning and savings, as well as a trend of shifting to greater

responsibility of the individual to finance education and retirement, rather than employer-

sponsored plans and financial aid. These trends, in conjunction, compound the need for financial

literacy to sustain oneself. In order to perpetuate more effective retirement planning, more

advanced financial education must be effected. By addressing the shift in responsibility, the

dearth of effective financial education, the influence of financial literacy on retirement

preparedness, and the results of existing financial education on financial literacy, the necessity of

more expansive training programs become obvious.

Shifting attitudes and systems of financial responsibility. According to Poterba,

Venti, and Wise (2008), the conjunction of various factors, including greater life expectancies

and shrinking birth rates has put greater stress on retirement security systems in many countries,

leading governments and employers to redesign and change their retirement plans. Commonly,

these changes result in greater responsibility on the shoulders of the individual, who must then

make many of their own financial decisions, including saving, withdrawals, investments, and

spending, and who must take personal accountability for any mistakes or insufficiencies.

Additionally, in a study conducted by Elliot, Grinstein-Weiss, and Nam (2013), it was

observed that pursuing higher education is viewed as a luxury, for which financial aid should be

limited and that the government has begun to roll back grants as a result. Because of this shift
 FINANCIAL LITERACY OR THE LACK THEREOF 7

towards greater individual responsibility, student loans are being relied on far more by college

attendees, such that “40% of all households headed by an individual younger than age 35 have

outstanding student loan debt.” With an average student loan debt resting around $25,000,

families are saddled with great amounts of debt in order to secure education which may not even

be completed, as evidenced by the third of respondents who took out student loans and did not

receive a degree.

Lack of financial literacy and its impact on retirement saving. Financial literacy,

defined as the ability to “process economic information and make informed decisions about

household finances,” is a skill that many do not recognize the significance --and dearth-- of in

their daily lives. In this report, they “conclude that financial literacy is very low around the

world, irrespective of the level of financial market development and the type of pension

provided.” (Lusardi & Mitchell 2011)

Lusardi and Mitchell observed in their 2011 report on financial literacy and retirement

planning that those who exhibit stronger financial literacy in evaluations are much more likely to

engage in retirement planning. In their 2007 report, Lusardi and Mitchell find that those

individuals who exhibit proactive planning behavior for their retirement are then more likely to

arrive at retirement with significantly greater savings, a conclusion also backed by the same

authors in their 2017 report on consumers’ understanding of finances and their own financial

capabilities. (Lusardi & Mitchell, 2017)

Results of current financial education programs on financial literacy. Many studies

on financial literacy suggest that not only is financial literacy lacking severely, but that the root

of the problem lies in insufficient financial education, which data struggles to support. One

study, conducted by Mandell and Klein (2009), provided evidence that even in situations where
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targeted, accredited financial education is given to some students and not given to others, there

seems to be little to no positive impact, and possibly a negative one, on the actual financial

literacy and educated financial practices after having taken the class. Some suggest that this

trend may have to do with the lack of motivation of the students, high school learners, versus

adult, self-motivated learners, but little evidence was provided to support this theory. Another

potential explanation considered was that the subjects were evaluated relatively early in their

lives, between ages 18 and 23, and therefore did not have enough time to implement the latent

knowledge they acquired from their classes, but this, too, is mostly unprovable.

In conclusion, the collection of data provided supports the conclusion that not only is the

economy shifting towards more independent, self-reliant attitudes and practices for retirement

planning and student loans, but the levels of financial literacy, which is definitely necessary for

managing finances more independently, are incredibly low. Previous attempts at improving

overall financial literacy via financial education by governments have proven unresponsive and

vague, with no clear indicators or large successful populations. Further study is necessary to

ascertain whether different educational methods would produce more positive results. It is clear

that more teaching of financial literacy is a necessity in order to ensure the effective subsistence

of coming generations for retirement, just a bit unclear how to increase financial education in an

effective way.
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Discussion

While the average cost of retirement in the United States is impossible to estimate,

experts insist that it is well within the realm of possibility on a person-to-person basis, if only the

consumer takes the initiative to get started saving. Despite the seemingly low bar for initiation

and evaluation, sixty-one percent of Americans have little to no understanding of how much

money they need to retire, a figure that poses a concern for the security of future generations

(Smith, 2019). Behind this lack of understanding of how much money they need, is the fact that

Americans and citizens of many other developed countries are all similarly challenged in their

lack of general financial literacy, their ability to understand, interpret, and make wise decisions

based on economic information and statistics. (Lusardi & Mitchell 2011)

As the little people of these countries face their own challenges with finances and

understanding, companies around the globe have, as a result of various stresses placed on their

social security systems, including longer life expectancies and lower birth rates, been shifting

away from the long-standing traditional system of defined benefit (DB) plans, toward a new,

more budgetarily forgiving system, the defined contribution (DC) plan, which is the

responsibility of the employee to dictate the management of. (Poterba, Venti, & Wise, 2007)

The combination of these two factors; the pre-existing lack of financial literacy among

the common people in any given developed country and the necessity of businesses to move

away from DB plans toward DC plans, has led to the growing problem of insufficient retirement

savings and preparedness in adults approaching or soon anticipating retirement. (Poterba, Rauh,

Venti, & Wise, 2007) Broken down, step by step, the systematic dysfunction goes as such;

adults entering the workforce begin their careers with little to no pre-existing education on

spending and savings. Those adults proceed into the workforce and begin to set the foundations
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of their lives, gaining debt and making their first decisions on their retirement savings, setting the

foundation of their future. As those adults pass their 30s and 40s, they may, as a result of their

lack of education, not sufficiently diversify or invest in their portfolio, or simply fail to initiate

their savings, not putting enough in, if at all. As these adults reach their 50s, they begin to see

the end of the road, but the retirement they have waiting for them is not enough to support them,

and, because of the time-sensitive nature of investments, they are left with very few options of

how to proceed, as they lack the time to gain momentum of interest.

Those very close to retirement now, in the 2020s, have a measure of security in the safety

net that American Social Security provides, but are also likely to be the last cohort to receive

significant support from this system, as a result of various demographic shifts that, together, are

anticipated to deplete the trust funds that make up the more plentiful bounty of Social Security

by 2035. (Cook, 2019) Despite the fact that Social Security is anticipated to contribute roughly

two fifths of projected family income for this cohort, they are also likely to be underprepared for

retirement, as two fifths of the baby boomers, the primary population of this massive cohort, are

predicted to meet less than 75% of their preretirement income, despite the most common

recommendation dictating saving in anticipation of 70-80% of preretirement income. (Butrica,

Iams, & Smith, 2003/2004)

Baby boomers, as a generation, fell well within the time frame of non-requisite financial

education in public institutions, and, as a result, were left wanting for guidance and experience

with finances and wealth once they entered the workforce. As a result of their doing so between

the 1960s and the 1980s, the boomer generation comprises one of the last cohorts to be provided

any significant number of DB retirement plans, and thus displays mixed data on preparedness

and the effect of financial illiteracy on preparedness. While boomers may not face the same
 FINANCIAL LITERACY OR THE LACK THEREOF 11

extent of consequences of financial illiteracy, they do serve as a profound example of the dangers

of illiteracy, as the evaluated boomers in Lusardi and Mitchell’s Financial Literacy and

Retirement Preparedness (2007), displayed serious faults in understanding and lack of

proficiency in topics that are essential to self-management, like compound interest and lottery

division.

Subsequent cohorts of retirees are predicted to face significantly harder times when

preparing for retirement, as they begin to receive fewer and fewer social support benefits.

Moving one cohort down from the baby boomers, those in Generation X are predicted to be the

last to receive effective support from Social Security programs, riding the coattails of the

boomers through retirement.

Further down, the next cohort, the Millennials, despite becoming the first cohort the

receive any degree of public required education on finances and economics, are likely to face the

most challenging entry to retirement yet, with half of the private sector of the economy not

receiving DB retirement plans. Furthermore, the Millennial cohort also possess far greater

student loan debt than their predecessors, began their integration into the workforce during the

incredibly challenging period in the economy after the Great Recession, and occupy a job market

in which benefits grow ever scarcer every day. Munnell and Hou’s Will Millennials be Ready for

Retirement? finds that “almost half of Millennial households ages 25-35 are burdened by student

debt and, among those households with debt, the outstanding loan balance amounts to more than

one-third of earnings.” In the same article,

The student loan debt faced by Millennials poses a significant problem for them and the

generations that follow them, with inflation of tuition and overall costs only increasing, while
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societal perceptions of higher education remain those of a commodity, a luxury to be bought, not

given, or received from the government.

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Conclusion

In order to fully understand the effect of different methods of financial education

practices, further longitudinal studies must be conducted, as relevant data on the long-term

effects of varying conventions on retirement preparedness for the impending most common

system of retirement plans, the defined benefit plan has yet to be collected in large quantities.

With what information is currently available, it can be concluded that no system outside of trial

and error, which proves hazardous and still provides mixed results, has yet to effectively increase

financial literacy among the population in any generation. Therefore, future cohorts can

anticipate facing not only more challenging circumstances and requirements for retirement but

being less prepared to handle the savings and management of their retirement plans, should

nothing change. It is most necessary to seek out different, more effective methods of raising

financial literacy across the population, not just among certain societal strata.
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References

Poterba, James, Steve Venti, and David Wise (2008), “The Changing Landscape of Pensions in
…… The United States.” In Overcoming the Saving Slump: How to Increase the Effectiveness
…… of Financial Education and Saving Programs. Ed. A Lusardi. Chicago: University of
…… Chicago Press: 17-46.

Elliott, W., Grinstein-Weiss, M., & Nam, I. (2013). Student Debt and Declining Retirement
…… Savings (CSD Working Paper 13–34).

Lusardi, Annamaria, and Olivia S. Mitchell. (2011) “Financial Literacy and Planning:
…… Implications for Retirement Wellbeing,” In Financial Literacy: Implications for
…… Retirement Security and the Financial Marketplace. Eds A Lusardi and O.S. Mitchell.
…… Oxford: Oxford University Press forthcoming.

LUSARDI, A., & MITCHELL, O. (2011). Financial literacy and retirement planning in the
…… United States. Journal of Pension Economics and Finance, 10(4), 509-525.

Lusardi, Annamaria, and Olivia S. Mitchell. (2007), “Baby Boomer Retirement Security: The
…… Role of Planning, Financial Literacy, and Housing Wealth,” Journal of Monetary
…… Economics 54, pp. 205-224.

Lusardi, A., & Mitchell, O. S. (2017). How Ordinary Consumers Make Complex Economic
…… Decisions: Financial Literacy and Retirement Readiness. Quarterly Journal of Finance,
…… 07(03), 1750008. doi: 10.1142/s2010139217500082

Mandell, L., & Klein, L. S. (2009). The impact of financial literacy education on subsequent
…… financial behavior. Journal of Financial Counseling and Planning, 20(1).
 FINANCIAL LITERACY OR THE LACK THEREOF 15

Appendix

Interview Transcript:

H: Starting interview with Mrs. Michele Vachris- Professor Michele Vachris, uh, at Virginia
Wesleyan University.
So, um, to start, our first question will be, Do you think your peers and acquaintances and others
you know who may be approaching retirement are prepared for retirement?

M: The people that I know seem to be. Of course, you know, I do work at a university, where
you get good retirement benefits and all of that. I know some people that have recently retired
and they seemed- it seemed to go smoothly. Um, so I would say from my select group, uh, yes.

H: In the grander scheme of people that are approaching retirement age and just entering
retirement, do you think that they are, generally, prepared?

M: Yeah, I would think that my circle of acquaintances and friends is probably abnormal, so my-
my reading, uh, of the news and other, um, economic studies leads me to believe that most
people are probably not as prepared as they should be.

H: And, uh, I’d ask the same, but, uh, of your students and those of the- your students’ age who,
perhaps, are not attending post-secondary, uh, institutions.

M: Yeah, I would guess that they’re even less prepared because, um, at least the folks that are
nearing retirement, they should still have social security, to, you know, sort of safety net, uh, we
don’t know what’s gonna happen with that, so, um, the younger folks, I- I would say maybe the-
my students will be more prepared, because they will have the more advanced notice that there
may not be that safety net, but, um, the folks in the middle, perhaps, maybe, the forty-year-olds,
the late thirties, they might be caught by surprise.

H: Okay, and how do you predict that retirement bottom lines for savings and just subsistence,
uh, will change between now and your students’ time?

M: Yeah, so you will need to set aside more, uh, for your retirement in the future than people
did- had to do in the past.

H: Okay, and, um, considering in the past few decades that public opinion has shifted away from
receiving assistance from the government and those around you and towards self-reliance and
personal responsibility for finances, whether that be retirement planning or, um, receiving money
for education, what do you think is the root of this shift?
 FINANCIAL LITERACY OR THE LACK THEREOF 16

M: Hmm, well there’s definitely been a shift, and that started, probably a couple of decades ago,
maybe even three decades ago, when companies and large institutions started moving away from
what’s called defined benefits plans to, um, more of a- a, like you said, the self, um, the self, uh,
financed, and, um, and those side- toward- type of things, so, maybe it was those large
institutions making that change for budgetary reasons, which then led the public to really realize,
“Oh, I have to start saving now!” So, it could have been that. So, it seems like most of those
large institutions that made that shift did so because they projected forward and realized, “We
just can’t afford these defined benefits plans anymore.”

H: Okay, um, and what do you think will be the biggest problem resulting from the rise in
retirement costs and the lack of increase in average pay, compared to inflation for career men
and women in the future?

M: Yeah, so this is a tough one, because, while a lot of people do focus on the stagnation of
wages- there’s a lot of different data that points to different, um, assessments of whether or not
wages have stagnated- but, economists tend to look at it more from a big-picture, so, instead of
just looking at wages, we look at total compensation, so you know the difference between that?

H: Um, including benefit plans, and PTO, uh, life insurance, or health insurance,

M: Yeah, yeah, so, while- if- while wages might be stagnating, overall compensation goes up,
because as healthcare costs are higher and higher, you still get your health insurance covered, so
that’s like getting a raise, but it doesn’t feel like a raise, *laughs* ya know, see what I’m saying?
Um, furthermore, just looking at pay or even total compensation over time doesn’t capture
people’s standard of living and their well-being, because what you have in your pay now can buy
so much more than it used to, even accounting for inflation. I mean, think about this phone here,
*gestures to phone being used to record* um, 10, 20 years ago, a phone- phones were very
expensive, and what did they do?

H: Barely anything. *laughs*

M: They enabled you to call somebody, ya know, you couldn’t even text. Now, for a fairly
reasonable price, you carry around a very powerful computer. So, and that’s just the tip of the
iceberg, that’s just one example, so, um, looking at these monetary streams over time grossly
understates people’s well-being. So, if that’s the case, then we might not need as much, uh, in
terms of pay and money to maintain a halfway-decent standard of living, in retirement.
But, anyway, that’s not what you were asking, um, the biggest problem, um,
*short interval of conversation about her dog, Larry, whom I’ve been scratching up to now*
Alright, so the biggest problem resulting from the rise in retirement costs- alright, so, if there’s a
rise in costs and a stagnating pay, yeah, that’s gonna squeeze people, again, that the focus is to
save early and save often, ya know, to live beneath your means at all times.
 FINANCIAL LITERACY OR THE LACK THEREOF 17

H: Alright, and, um, shifting the focus a little bit, do you think that we are approaching a peak in
the economy?

M: Well, if I really knew that, I’d be a lot richer than I am right now, so, uh, maybe you need to
interview, uh, someone in finance, like John Borum, *a shared family friend of ours who does, in
fact, work in finance* who lives up in New York. The forecasts that I have seen, though, indicate
that the economy, at least next year, should slow down a little bit. Um, it’s- so, I mean, when you
say ‘peak,- I mean there- the economy ebbs and flows, so, it peaks and then it- you know, a peak,
a trough, a peak, a trough, there’s the business cycle, so, um,

H: As my advisor *for my senior project* phrased it, he is concerned that we are approaching,
like- we are in a bubble, and we’re approaching the popping of the bubble.

M: Yeah, yeah, so, I mean, that’s what happened in the, um, 1990s with the- the tech bubble, that
happened, obviously, with the housing bubble, um, I- I’m not seeing a bubble, just yet, um, I
think we’ll- we’ll slow down a little bit. What worries me is not really a bubble. What worries
me is the uncertainty with the US trading policy. So, you know, we- we, um, enacted taxes on
imports to try to punish our- uh, I don’t kn- I don’t know why- to try to punish our trading
partners into some better deal.

H: Like the recent one hundred percent tax on french imports, if I remember?

M: French, Chinese, you name it. And so, of course, those countries are retaliating, and the last
time that happened was during the Great Depression, and that just made things a lot worse, so,
that, to me, is the uncertainty, and that’s- that’s probably a drag on our economy, so, probably
one of the reasons why we’re gonna- we might see a slow down- maybe not a recession, but not
growing as much as we have been this year.

H: Okay, um, so, I was prepared for more of a yes or no answer, *in reference to the pre-
assembled list of interview questions* but, we can see if there’s a way to, uh, shift these a little
bit, so, we’re not quite approaching a substantial peak, essentially, but, um- and you answered
you probably think it’ll probably be like, a mild slope, um, do you think that the drop will have a
significant effect on retirement costs and retirement savings?

M: Well, what might have an effect on retirement savings is what happens in the next
presidential election, because some of the presidential candidates seem to be, um, in favor of
policies that will change the way corporations are run, and anything that changes that will affect
stock prices, and anything that affects stock prices affects my retirement savings, because most
of- most people’s retirement savings are, um, in stock funds.
*Short interval of her husband arriving home and them discussing various things*
 FINANCIAL LITERACY OR THE LACK THEREOF 18

So that- anything that affects the stock market, of course, will affect people’s retirement savings,
so, yes.

H: Okay, um, and, do you think it will affect, uh, in the- for, likely the same reason, do you think
education costs will be, um, will be affected? As in, post-secondary institutions.

M: Oh, sure, so, ya know, most colleges have some sort of endowment fund, so that’s linked to
stocks, so again, anything that happens to the stock markets will affect those endowments, um…
So the education costs- so can you- can you refresh my memory on the..?

H: Um, so, the- the same possible influential factors, like you mentioned the presidential race, do
you think, uh, that is going to affect education costs, and if so, how?

M: Well, some of the candidates are promising free education, um, and so, that, oddly enough,
leads to higher education costs, because, I don’t know if you’ve had an economics class, but
when demand goes up, the price goes up, and so, when- when, um, you subsidize education, um,
it leads, down the road, to higher costs.

H: Okay, um, so, uh, alright-

*Short interjection of her husband about “And who’s paying those costs?”*
Um, and, at what point do you think the conflict between school debt and the necessity to pay it
and the need to save for retirement might come to, um, a climax?

M: Yeah, so that would be something that the younger folks would be dealing with, mostly
because they’re the ones that are having the, um, the- the school debt, so, at, yeah, I mentioned
earlier, save early, save often, and that’s a little hard to do if you’re facing a bunch of student
loans, so, I think that’s going to impact that generation’s ability to start saving early, uh, so
again, the answer is living beneath your means as much as you can.

H: Alright, and, um, shifting more towards financial literacy and education, um, do you think
your peers or acquaintances have been effectively educated about finances and savings?

M: Uh, through trial and error. I don’t know that there was any formal education about it, but,
uh, you learn- I think the best way, seems like the best way to learn about it- finances and
savings, is to go through some hard times and figure out how to manage your money. That’s-
that seems to be the way, um, some people are- oh, there you go, I just answered the second
question, *in reference to the same list of questions*

H: Yeah, um, so, on the same note, how do you think your students and those of their age who
are not in post-secondary institutions- have they been effectively educated about finances and
savings, as far as you’ve seen?
 FINANCIAL LITERACY OR THE LACK THEREOF 19

M: Um, they don’t seem to be. Um, despite the push for financial literacy and economic literacy,
even here, in, um, in Virginia, I think, um, the first cohort, of people that went through the high
school education of, you know, econ and finance was Joey Needham’s *a neighborhood kid that
we both know who graduated from college Summer 2018* year, so, we’ll see how they do, they
just graduated college, ya know, so, we have to kind of wait and see how they do, to see if it was
good or- if it helped or not. Uh, I do know, anecdotally, I teach freshman this semester and pretty
much, I mean, this is a small class, like 16 people, but pretty much none of them knew what life
insurance was so…

H: Concerning!

M: So, many of them, I’d say half of them, did go to school in Virginia, so…

H: Okay, um, and, so, um, how do you view the state of financial literacy today among all
people? So, across age groups?

M: Yeah, I think it’s pretty low, as both financial and economic literacy and all the surveys seem
to- seem to show that.

H: And, um, stratifying by different groups, um, specifically those in retirement, approaching,
and beginning their careers, uh, do you think there are significant differences among them in
terms of financial literacy?

M: I haven’t seen the data broken down that way, so I really couldn’t say.

H: Alright. Um, do you think that there is any effective means outside of personal experience and
‘trial and error,’ as you mentioned, to teach a significant portion of the population financial
literacy?

M: I do, I mean I’m an educator, so of course I believe, uh, we can educate people, but, uh, I
think it has to be more than just a- a semester class, you know? It needs to be kinda infused
throughout the curriculum, kinda like- like, um, writing is, or math, you know? Um, so, and- and
also, outside of the classroom, ya know, I think, when I was in school, I was in something called
Junior Achievement, where we had to like- you know it was like a club, where we ran a business
and we sold stuff and- so that was helpful, ya know, that kind of hands-on experience, instead of
just the book-learning.

H: Gotcha! Um, and, do you think that the current VBCPS, so, Virginia Beach City Public
Schools strategy of requisite financial management and economics class- classes, is effective?
 FINANCIAL LITERACY OR THE LACK THEREOF 20

M: Well I- you know, I remember when Brendan *her younger son who has graduated from
VBCPS and is still in college* took it, and actually, when Joey took the courses, I got- I got the
course outlines, ya know the- to see what they were teaching, and I mean, on paper it looks good,
I- I have no way of knowing how it’s, ya know, effective. Like I said, when, now that Joey’s
cohort has graduated, maybe they can do some kind of pre- and post-test or kinda track that-
track that group, but, um, that’s gonna be the- how we can answer that question.

H: Okay.

M: I mean, I guess it’s better than nothing.

H: Absolutely! And, have you encountered any students whose previous financial education was
particularly impressive?

M: Yeah, the ones who have, like worked a lot, and the ones who have even, sometimes, started
their own business, they’re the ones that really know.

H: Um, and, were there any trends about, like, where they came from? Like, location wise,
specifically?

M: I haven’t noticed that, no.

H: Just those who pursue, um-

M: Again, it’s that kind of experience, as opposed to just learning it for a test, ya know.

H: Um, and, have you witnessed an increase or decrease among your students through the years?

M: Hmm, well, it’s kinda hard to say because my students have changed over time. When I first
started teaching, I was teaching mostly older students, quote unquote ‘non-traditional’ students,
and of course, they know, because they’re- they’re working, um, and so, as- as I’ve, uh, gotten
more, into the traditional students, then, obviously, they have less experience, so, they would
have less, um, less financial literacy.

H: Okay. Um, and, do you have any of your own questions that you’d like to put in or concerns
that you wanna address, anything you wanna say for the record?

M: No, I couldn’t really think of anything, you’ve got a pretty all- all-inclusive list, here. I guess,
uh, well, maybe one other thing, maybe one part of the financial literacy problem is just that
overall, lack of knowledge and interest in current events, ya know, um, students today don’t read
newspapers, don’t, um, like- like the Wall Street Journal or even, um, the business section of the
 FINANCIAL LITERACY OR THE LACK THEREOF 21

Pilot, *The Virginian Pilot, the local newspaper for our area* ya know, um, so, maybe it’s also
part of the decline of our news literacy, um, so, maybe that’s something that could be addressed
in these classes as well?

H: Alright! So, like, overcoming the ‘soundbyte barrier,’ where all you wanna hear is the
headline, or, like, five seconds of audio, and actually looking into it and understanding it.

M: Yeah, ‘cause I give my students an assignment where they have to find a news article that has
something to do with, like, a market, like supply- it’s supply and demand, but I know- anyway,
you can pick any market, and I’ve noticed over the years, especially, the last couple years, they-
they had no idea, they would google, ‘supply and demand,’ and try to get something to come up,
as opposed to opening up a paper and just, kinda, browsing. So we’ve lost that- in our technology
age, we’ve lost the ability to just open up the paper or go to the library and see a bunch of books.
We’ve lost that ability; instead we think we just put in a keyword and it comes to us. So I think
maybe that is a little problematic.

H: Okay, um, anything else?

M: No, I don’t think so!

H: Alright, thank you for this interview!