The following is an interview I conducted recently with Higher One's co-founder and chief operating officer, Miles Lasater, as well as the company's financial literacy and consumer advocacy manager, Mary Johnson, in regard to financial literacy.
Jason Moser: Do you believe that financial literacy should be taught in our public schools?
Miles Lasater: Yes, and the earlier the better. And there is evidence that it works. In a 2009 study by Michael Gutter at the University of Florida, college students who came from states that required a personal finance course in high school were much more likely to budget and save, and less likely to rack up credit card debt. Unfortunately, only  states currently require a course in order to graduate. There has been some positive movement, though, as 36 states now require personal finance standards to be implemented according to the Council for Economic Education.
Moser: What is the biggest hurdle facing the implementation of financial literacy classes in our public schools today?
Lasater: Time and resources stand out as the most common obstacles cited. With the focus on the basics and competency testing (i.e., No Child Left Behind and other mandates), teachers are hard-pressed with overcrowded curriculum. In addition, teachers may not have the appropriate training and/or confidence in their own money management skills to teach effectively.
Moser: Is there a model to which you can refer that strikes you as one we should strive to emulate?
Lasater: Ideally, financial literacy education should (1) begin in elementary school and be integrated into other parts of the curriculum (reading and math, in particular) and (2) be a required course for graduation. New Jersey is one state that comes to mind that recently developed comprehensive curriculum standards for K-12, a graduate requirement and also a mandate to assess the effectiveness of financial education.
On an international level, Canada has been doing some great work in collaboration with OECD [the Organisation for Economic Co-operation and Development] on developing a national strategy for financial literacy.
Moser: What is Higher One doing for the cause of financial literacy?
Mary Johnson: First, we have a dedicated financial literacy manager who:
- Operates a financial literacy blog exclusively for college students called One For Your Money.
- Provides articles, tips, and tools to help students manage their money more effectively.
- Promotes positive financial habits through online events and contests such as Financial Literacy Challenge of the Month and Money on My Mind.
- Offers financial literacy workshops on college and university campuses.
- Promotes thought leadership on the importance of financial literacy through presentations to national and regional higher education organizations, and written articles and guest blogs.
We also offer a competitive grant program, Financial Literacy Counts, to provide small grants to higher-education institutions to support their financial literacy efforts. Last year, we awarded $30,000 to eight institutions and this year raised that level of support to $50,000. 2012 grant recipients will be announced soon. In addition, we have a content partnership with EverFi, a leader in online financial literacy education, to offer financial intelligence to institutions interested in providing a more comprehensive financial literacy solution.
For student account holders, we offer transparent fees schedules and tips on how to use the account for free, mobile alerts and apps, money management videos, and account choices, including OneAccount Premier, which includes an interactive budgeting tool called Budjet.
Moser: Does social media have a place in teaching financial literacy?
Johnson: Absolutely! One of the biggest challenges in providing financial literacy education is getting students to pay attention. Using social media tools such as Twitter (@MoneyTalkMary), Facebook , video and blogs [is] a great way to engage students and keep them coming back for more. There is a multitude of financial literacy information on the Internet, for example, but much of it is text-based and presented in a way that is unappealing to students. Today's students are more likely to respond positively to fun and interactive content.
Moser: How did you learn about financial literacy? Who taught you about it? Or was it something you needed to pursue on your own?
Johnson: Much of what I learned early on about managing money came from my parents. It was not taught in my high school, but I did have some exposure through 4-H (Cooperative Extension programs are a great source for personal finance information and workshops). Later on, it was really something that I pursued on my own.
Lasater: For me, it was similar. Learning from adults around you is very powerful. I also enjoyed reading a number of personal finance books. I know -- a bit of a bookworm. Then learned more through hands-on experience and a bit in college.
Moser: Let's assume for now, financial literacy is something that will not be taught in schools for the foreseeable future. What is one thing parents can do to help their kids learn more about the essentials?
Lasater: The most important thing that parents can do is set a good example for their children by modeling responsible financial behaviors in their everyday lives. Children learn from what they see and observe, so providing opportunities for learning about money at home [is] important. Having casual conversations about money, explaining how much things cost and how they are paid for, and giving them chances to succeed and fail on their own (i.e., giving them an allowance, hav[ing] them save for a special toy) are ways to encourage children to think about money and make good decisions.