The 1987 stock market crash made my high school consumer education teacher depressed. She talked about losing money, dollars she had counted on for retirement, like millions of Americans had on Black Monday.
That’s about all I remember of the otherwise uneventful class. Meaningful lessons on credit cards, credit ratings and loan amortizations came from family, college courses and financial missteps. Any credit card looked good at 18, even if it came with an astronomical interest rate.
Consumer ed hasn’t changed much over the years. Teachers tell me many of the brightest students do not understand basic principles of finance. As teens increasingly turn to college loans and credit cards straight out of high school, and some carry the burden of handling finances for their families, it’s time for that to change.
“It’s a pretty dire need,” Benjamin Walker, a math teacher at Golder College Prep, told me. “It’s absolutely necessary that kids know what a credit score is, that they understand debt.”
In 2012, Walker began teaching an after-school class on basic finance when his school partnered with Evanston-based Magnetar Capital’s youth investment academy.
Walker said initially he was skeptical of the project, thinking it could be more of a public-relations move than an effort to pass on life skills.
“But this is a class I wish I had taken in high school,” he said.
The course is a magnet for teens because it’s about money.
“Anytime I teach and it relates to money, the kids’ ears perk up,” said Lindblom math teacher Trent Anderson.
The teachers told me about students who go home and advise their parents to stop cashing their paychecks for $5 at currency exchanges when they can do it for free with no-fee checking and savings accounts.
Anderson believes these life skills are more important for students in poverty than any other group. “Kids don’t want to be poor,” he said. “They want to know about money. More than hope, you have to give them skills to succeed.”
Students in the academy get lessons on simple savings and compound interest as well as the stock market.
Each year a group of students from each school — this year there are 40 in the Chicago area from two in 2011 — spend a Saturday in a mock trading challenge, the closest some will come to an actual trading floor. This year’s event is March 1 at the Museum of Broadcast Communications.
Asked about her knowledge of stocks before the course, Golder Prep senior Lily Martinez said: “Wall Street and stocks. I knew the words.”
By the time she finished the challenge event last year, Martinez had made up her mind on her college major: business.
“My mom had always been asking me, ‘What do you want to study?’ ” Martinez said. “I never knew.”
Not knowing left her frustrated, Martinez said, especially since some classmates had been set on a field since they were young kids.
By the end of her junior year she had her answer and wrote about finding it for a college-entrance essay. She has been accepted by Penn State, Wisconsin and Michigan State.
“Taking this class has been the best investment thus far in my life,” she wrote. “It has made me more comfortable in trying things that I normally wouldn’t . . . the risk is greater when I let opportunities pass me by.”