Virtual Finance 101
For our Children of the Recession piece airing tonight on the CBS Evening News with Katie Couric, I interviewed Shanetta Francis, a recent graduate of Trenton High School in New Jersey who could not wait to get her hands on plastic.
"Because I heard so much about credit cards and how they raise your limit and you can get black cards and gold cards or platinum cards and I was like I cannot wait until I turn 18,"she told me.
That was before she entered a virtual world of earning and spending, part of an innovative video game used at her school to teach kids Finance 101.
Shanetta and her classmates had to figure out how to cope with unexpected costs like repairing a broken cell phone while at the same time sticking to a budget and saving for college.
Shanetta now tears up every credit card solicitation she receives.
"After I took this program, I'm like no, I've got to wait," the future college freshman said. "I am not trying to get into debt at such a young age in my life, I'll wait."
That's music to the ears of Tom Davidson, one of the co-founders of EverFi the company which created the unique software and licenses it to schools and nonprofit organizations throughout the country.
"We teach driver's ed, we teach algebra, we require a lot of things of our young adults when they come out of schools," Davidson told me after we watched the kids use the EverFi program at Trenton High School. "It's amazing to me that we don't require this."
I, for one, would have loved to take a personal finance class before graduating high school. As someone who got in and out of credit card debt not once but twice, I think if I really knew a bit more about debt, how it can rapidly accumulate and how difficult it is to draw down, I'd be better off today.
Davidson says states are beginning to recognize the importance of teaching our kids about money. "When we started this company, only four states required financial literacy of any kind," he said. "We think it will be over 30 by the end of this year and eventually all 50 states will have it, so it's definitely moving in that direction."
There's another huge positive to this education, says Davidson, and that is that the financial literacy can trickle up to the parents.
"People have had a neutron bomb dropped in their household, an economic bomb that has landed on their kitchen tables and it's an amazing opportunity to let the kids be teachers," said the former state lawmaker in Maine who spearheaded a movement to link schools and libraries in his state to the internet.
It also helps having teachers like Trenton High School Vice-Principal Jermaine Kamau at our nation's schools. Kamau saw the EverFi program and immediately knew he needed to find a way to bring it to his students.
"People don't have the means to survive because of some poor financial decisions that they made, so this should be an awakening for all of us that everyone should be financially literate," Kamau said.
As for Shanetta, she never realized how "drastic" credit card debt could be.
"It shocked me how something can seem so good and so rewarding but have such hard consequences too" she said.
She's got a financial step ahead of her college classmates even before she gets to campus.