Last year, I asked in high schools should require money management classes. My point of view is that such classes should be optional and/or lessons in personal finance can be incorporated into other classes throughout middle school and high school. Not everyone agrees with me, however, considering the state of financial distress many in this country face.

A commenter wrote in to describe his experience with a specific money management curriculum called Real Money, Real World, part of the Your Money NOW program sponsored by the Ohio Treasurer of State.

Schools can devote as little as 90 minutes or as much as a grading period to the program.

It works like this: Students get jobs and salaries based on their current GPA (the higher your GPA, the better paying job you get). Several booths are set-up with different signs relating life events. Students go to each to add children, housing, entertainment, cars, etc into their budget. At the end, they have to have a balanced budget.

I helped out at one of these events at my local high school and it was great to see these kids doing the math and complaining how much kids cost or how they can’t buy the clothes they want because their job doesn’t allow it.

The program sounds like a good start. I particularly like this resource: a description of the savings you could experience [pdf] by maintaining a credit score of 680 rather than 580.

When I was applying for colleges for my undergraduate degree, a scholarship agent came to our house. I think he was referred to us by a friend of mine, and even then I wondered whether this was the time of arrangement where someone gets a referral bonus. The scholarship agent entered our house with a several fairly large binders, supposedly containing information about thousands of scholarships, and I could be a match for many of these. The agent asked about my interests and activities and turned to the appropriate pages in the binders.

I may be somewhat fuzzy with this memory; my parents were handling the financial considerations of my college experience. I believe this consultation cost somewhere around $200, and I don’t think there was anything gained from the meeting. The scholarship agent couldn’t complain, though. By showing up with his binders and meeting with my parents for a couple of hours, he was a few hundred dollars richer.

This was a year or two before “The Web” would become accessible to those with Mosaic and an internet account. This was several more years before a wealth of information about scholarships could be found online. The dissemination of scholarship information was apparently accomplished through traveling agents, moving from referral to referral. Besides a scholarship from the local university where my mother worked, most of my education was funded by loans, either taken by me or by my parents.

Here are three tips from SmartMoney for scoring more financial aid.

Plan ahead. College-planning specialists have grown to more than 1,200 in number since the National Institute of Certified College Planners was founded, in 2002. They offer ways to boost aid eligibility (deferring income, for example) and take advantage of tax benefits. NICCP.com has a list of specialists; check with the Certified Financial Planner Board of Standards to ensure they’re also certified financial planners.

Was the agent who came to our door a “Certified College Planning Specialist?” At the time, I wasn’t paying attention to the details, so I don’t know. I’d be willing to bet that such a designation didn’t exist at that time. The CCPS is a type of financial adviser that focuses on planning for college. If you already have a financial adviser, would it be worthwhile to hire a specialist?

Dig for scholarships. By last count there was over $3 billion in private aid available, with $100 million going unused annually. David Rye, author of The Complete Idiot’s Guide to Financial Aid for College, says people don’t realize it’s there. Employers and churches can be sources of scholarships, and you can search on sites like Petersons.com.

My memory, which often resembles swiss cheese, is hinting at a scholarship a friend from college received. I seem to remember that she received funds every year from the Daughters of the American Revolution even though she had no genealogical ties to the organization.

Follow up. If the school’s aid offer is insufficient, The National Association of Student Financial Aid Administrators recommends writing a letter, especially if there are recent changes in the family finances. If the need is real, says NASFAA’s Justin Draeger, they won’t “turn their backs on you.” Be sure to provide evidence, such as tax returns, to support your claims.

It can’t hurt to ask for more, especially if you can prove a financial need. It also doesn’t hurt to have schools compete over you. If there are two schools on equal footing, and one offers more financial aid, don’t hesitate to let the other school know. Perhaps they can match the offer.

If I have children, I’ll be going through this process again, only I plan to be more involved. Costs for college and private school are advancing much faster than anything else other than health care, and competition for scholarships can only get tougher.

Image credit: talaba
Score More Financial Aid [SmartMoney]

A week ago, U.S. Senator Patty Murray introduced legislation proposing an investment of $250 million to support personal finance education in public schools and colleges. Education is the key to improving the financial stability of future generations, and parents have the strongest side of responsibility. While the general media doesn’t encourage fiscal responsibility through excessive commercialism, this message may not be balanced by education at home or in school. The problem is that many parents don’t have the ability to pass on solid knowledge because they didn’t receive good habits from their own parents. The cycle has to be broken somehow, and public education is a good start.

The public school curriculum is already packed with essential education in science, math, humanities, languages, and arts. Adding a separate personal finance requirement to the curriculum would require cutbacks in other areas of education, and I cannot support that. Alternatively, schools can incorporate money management into other classes or offer elective courses.

This legislation would provide needed funds for teaching financial literacy in whatever manner appropriate and necessary.

Of the $250 million in grant funding, $125 million will go to support classes in local colleges that students, working adults, and seniors can access to learn crucial financial basics. Another $125 million will go toward K-12 schools to teach financial literacy, help teachers incorporate financial lessons in other subjects, set new financial literacy standards, and develop innovative afterschool programs.

A public school that receives a grant under this program would be required to implement teacher training programs to embed financial literacy and personal finance education into core academic subjects, administer financial literacy assessments on at least an annual basis, and implement financial literacy activities within core academic subjects.

The bill was introduced and referred to the Committee on Health, Education, Labor, and Pensions, chaired by Senator Ted Kennedy.

Senator Murray Acts to Improve Financial Literacy Programs in America’s Schools and Colleges
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The Catholic Diocese of Brooklyn is concerned that the recent rash of foreclosures, if it continues, will degenerate the neighborhood into its recent crime-ridden past. To combat this possible future, the church has now begun offering “Housing Crisis” workshops alongside its Sunday school religious lessons.

Are pastors and Sunday school teachers extolling the values of living within your means, buying only what you can afford, and negotiating with creditors to manage your mortgage payments? No, the church is bringing in housing experts, unaffiliated I would assume, to speak to the congregation.

This program seems to be a good idea on the surface. I don’t think the religious setting would cause too much conflict. I think secular schools and other community institutions would benefit—and it would benefit their communities as well—by offering adult education courses following this example.

A Sunday school lesson in mortgages [Marketplace]

Existence of music education in one’s curriculum is related to higher incomes and more education later in life, according to a new study by Harris Interactive.

Three-quarters (75%) of American adults were involved in some type of music program while in school. Half (51%) were involved in chorus while 42 percent had some type of formal instrumental lessons. Just over one-third (35%) were in a school instrumental ensemble, such as an orchestra or band while 14 percent were part of an informal group, such as a garage band and 12 percent had formal vocal lessons.

Music education is associated with those who go on to higher education. In looking at what groups may have participated more in music, education shows the largest differences. Two-thirds (65%) of those with a high school education or less participated in music compared to four in five (81%) with some college education and 86 percent of those with a college education. The largest group to participate in music, however, are those with a post graduate education as almost nine in ten (88%) of this group participated while in school.

Music education is also associated with higher incomes. Three-quarters of people (74%) with household incomes of $34,999 or less and 72 percent of those with incomes of $35,000-$49,999 participated in music, compared to 83 percent of those with incomes of $150,000 or more.

The findings are interesting, but it’s important to note that the survey doesn’t prove a cause-and-effect relationship, just correlations between music education and higher education and between music education and higher income.

Music education was obviously a big part of my life, as my original career choice was to become a music teacher. Its funding often sits second chair to “core” subjects however, and I’m disappointed when untapped talent or interest can’t be explored because schools have no money for instruments.

Those with More Education and Higher Household Incomes are More Likely to Have Had Music Education [HarrisInteractive]

Earlier this year, I shared my opinion that personal finance classes should not be required in high school thanks to an overloaded general curriculum and dubious results. My opinion is that basic money management is better taught—if in school at all—in the earlier years.

The Citi Foundation sponsors a financial education program, offering a curriculum appropriate for kindergarten through eighth grade as well as adults. High school students might be able to relate to the lessons for adults. The curriculum includes lesson plans, handouts, and tips for teachers. The program is quite comprehensive.

Here are the suggested lessons for third through fifth grade:

“What Matters Most?” How many times in a single day do you use the words needs and wants? Do you know the difference in the two words? Do you have the same wants and needs as your best friend? You just might be surprised. Continue with this activity to learn more about wants and needs.

“Is It Really Worth It?” What makes you buy things? Do your friends encourage you to buy things that you really do not need? Continue with this activity to become a “Smart Shopper”.

“Where Does My Money Go?” Have you ever wanted to do something or buy something – but you didn’t have the money you needed? What happened to your money? Continue with this activity to learn how to manage your money.

“Which is Better – Piggy bank or Savings Account?” Do you have any pennies or nickels in your pocket? Take a coin out and look at it. Have you ever wished that the nickel you are holding would become a quarter or even a dollar? Continue with this activity to learn how you can save money and make it grow.

The included lessons plans are conceived well and can easily be related to state and federal educational standards. The adult/high school lessons are mildly interesting and would be appropriate for a short elective but not a replacement for any other required course. Citi offers lesson plans aligned with the National Standards for Financial Education (from the Jump$tart Coalition for Financial Literacy) and the National Council for Economic Education, covering banking services, money management and credit. The full list of lessons is extensive.

For an example lesson plan, take a look at this lesson on prime and subprime lending, whose timing is appropriate.

I tend to be skeptical when it comes to corporations increasing their involvement in public education, whether explicit like Coca-Cola’s junk food exclusivity deals or subtle like Citi’s promotion of the financial curriculum.

Is there a conflict of interest? These lesson plans are developed by the non-profit foundation arm of a financial company. If these lessons are properly indoctrinated into the minds of today’s youth, the eventual outcome includes more assets under banks’ and brokers’ management. The success of the financial services industry depends on the public knowledge of these services. Citi has a vested interest in spreading the word about good money management habits, which include the use of banks like CitiBank. On the other hand, the industry is well poised to provide some of the best information about the skills necessary for the financial survival of future generations.

If you don’t like corporate involvement, there is another choice for curriculum information. The National Endowment for Financial Education is “the only private, nonprofit, national foundation wholly dedicated to improving the financial well-being of all Americans,” and their High School Financial Planning Program. From what I can tell from GuideStar, this organization has no corporate contributors.

Among the high-powered analysts and hedge-fund superstars, obtaining an MBA is losing its attraction. Even degrees from the most prestigious schools like Harvard and Wharton are viewed as a waste of time and money if the student could be earning hundreds of thousands of dollars a year as a stock analyst or millions as a hedge fund manager.

At funds that manage $1 billion to $3 billion, people with just a few years of finance experience will make $337,000 this year, Mr. Zoia says, and those with five to nine years of experience will average $830,000, up 6 percent from last year. These estimates include analysts and researchers but not portfolio traders, who can make much more because they sometimes share in profits.

This seems obvious. If you’re making six or seven figures a year, taking time off of your job for a two-year full-time program is a bad move financially. If that program is expensive, the loss is even greater. In fact, such a move would be seen by future employers as poor financial decision. I can understand why the MBA would be overlooked for a job in which financial analysis is a component. In many cases it shows a poor grasp of cost-benefit analysis.

Not everyone is making six figures when they decide to enroll in a business school graduate program. Also, for someone switching careers or considering entrepreneurship, the MBA can be a gateway. While the article contains some good points for those in high-performance finance careers, there are millions of other perspectives out there.

Just like all college degrees, MBAs are more common. This commoditization causes devaluation. Having a masters degree in business once set someone apart from the crowd, but now it is the crowd. If your goal is to set yourself apart from other people, say, in competition for a career, there are other ways to stand out. According to the article, having a superior stock trading record is a surefire way to rake in big bucks.

Before deciding to undertake any graduate or postgraduate degree—particularly if it involves leaving salary on the table—figure out what your goals are. If your goal is to finish life with the most money, more school (particularly business school) may not be the best option. If lifelong education is part of your personal mission, go for it. If you want a degree only for its potential boost in income, you may have to look at the latest data to determine if your chosen industry perceives the degree as the asset you are hoping it is.

College classes have already begun around the country, and it’s not too late to start listening to Ben Stein. He has some great advice for those matriculating. His son is just starting college, so I would imagine Ben has been giving this topic a lot of thought lately.

Make friends with your teachers. While seeing your teachers socially was unacceptable in high school, as adults, the teacher-student relationship takes another form. I had no problem with attending barbecues hosted by my professors, going out for meals, or just relating on a more personal level. We discussed sports and books, music and logic.

Ben goes on to address ways to become friends, but they all pertain to situations in class. While I was in college, a lot of the real relating took place outside of the classroom, but that may be more a result of the type of degree I was pursuing.

Do your assignments neatly, correctly, and timely. Ben Stein mentions that college is about learning to budget your time. Looking back, I wish I had done this better. My time commitments pushed me in a number of different directions and I was always finding it difficult to fir everything I wanted to do inside of the day. I still have this problem now.

I find it hard to believe that people have to be reminded to spell correctly. I’ve encountered horrible spelling from my classmates as a graduate student, and I just don’t understand what the excuse is. Grammar is one thing; there are times when the correct grammatical rules to apply are confusing. Poor spelling is inexcusable. I am sure I’ve made spelling errors in the past, but I would be embarrassed if I spelled as poorly as some of my classmates.

Be well-rounded. I applaud Ben for writing this. Many times, people are encouraged to pick one topic and become an expert without much thought to the larger world around them. Ben Stein wants people to study history, geography, Shakespeare, poetry, literature, biology, physics, and mathematics. Of course, I would add visual and performing arts to his list. All of this teaches more about human understanding than would any business psychology or human resources class.

You probably won’t call upon these subjects in your daily life when you enter the workforce, but they’re vitally important in teaching you how to think. And learning how to think is, above all, the main challenge you face in school. It’s true that you have to know certain basic facts, but you should also know how to approach a problem, break it down, solve it, and write about it. That’s why it’s important to take English composition, and take it seriously.

Join a fraternity or a sorority. Social groups can be positive or negative, so be choosy about which groups you hang out with. My fraternity, which was new on campus when I joined as a freshman, was more of an honor society or service group during the first few years. We didn’t have a house so there are no movies that quite exemplify our dynamic, but we became decent friends as we did as much as we could to follow the fraternity’s national “purpose.”

As Ben notes, the good thing about a group of friends is the support they can provide when it is most needed. Chances are there will be some time during your time in college when you need that support.

Neatness counts. Image is always important.

If you wear sloppy clothes, be clean inside them and have your thoughts especially well-ordered to offset your appearance. You’ll need to work twice as hard so your teachers know you’re smarter on the inside than on the outside.

Don’t smoke or drink to excess. Anything in excess is bad. Aim for moderation and limit any unhealthful habits.

Play a sport. Is marching band a sport? I guess it depends on the marching band.

Have a roommate you like. Personally, I preferred having no roommate and spending most of my time in the dorms with my girlfriend. I never had to worry about disturbing anyone. I did live in a special interest dorm, where everyone on the floor was interested in the same thing. For my floor, that was music. In return for living in the nicest dorms on campus, for which we had to apply separately from the standard housing application, we had service responsibilities to the community. I enjoyed this type of environment.

Try to have a significant other. I am a strong supporter of this idea, but I would suggest not staying with the same significant other for your entire college experience unless you are sure you are going to get married. College is a great time to learn about yourself and determine you compatibilities.

Develop good work habits.

College is where you learn to allocate your time, get your assignments done, and develop a good rapport with your fellow workers (students) and your bosses (teachers), and make them all your friends.

Ben notes that in all likelihood, you’ll spend the rest of your life working. This is the reality, so it is best to make the most of it. I didn’t work as hard as I should have while I was running around leading various organizations. I put my priorities elsewhere when I should have worked for more balance between classwork, practicing (I majored in music education), activities, and socialization.

As a leader among my peers in high school in college, this hasn’t translated as well to the working world as I would like. While I’m happy with my experiences, and changing anything about my personal history would change my identity, there was possibly a little room for improvement when it came to getting the right things done at the right time.

Chances are you won’t get everything exactly right. Ben Stein’s tips will get you started in the right direction.