1
What Young Adults Need to
Know About Money
Celia R. Hayhoe, Ph.D., CFP®
Melissa W. Chase, M.S.
Virginia Polytechnic Institute and State
University
Barbara O’Neill, Ph.D., CFP®
Rutgers Cooperative Extension
Objectives
• Provide financial
education materials to
teens and young adults
– Use various media
• Newspapers
• Internet
• FYE textbooks specific to
universities
– Reach hard-to-reach
audiences
– Enhance young adults’
financial literacy
2
Current Research
Continued need for personal finance and consumer
education
•
•
•
Educators are concerned about students’ lack of financial knowledge
(Warwick & Mansfield, 2000)
In 2002, standards existed in 31 states, however, only 14 states
mandated standards before high school graduation (National Council on
Economic Education, 2002)
Students want to make adult financial decisions but may lack
appropriate financial decision-making skills
– Jump$tart Coalition (2003)
• Tested high school seniors’ financial knowledge (administer test
approximately every two years)
– Continued increase in test failure rates
– In 1997, 44.2% failed test
– In 2000, 59.1% failed test
– In 2003, 69.1% failed
3
Current Research
Continued need for personal finance and
consumer education
– Alan Greenspan (2003); Braunstein and Welch (2002)
• Acknowledge complexity of marketplace (and advanced pace of
technology)
• Continued need for young adults’ basic understanding of personal
financial concepts
– Increased knowledge alone is not enough to change financial
behaviors
– Educators should be able to understand what motivates the
individual and provide education at appropriate time
– Financial education could be delivered in ways to reach
specific audiences (such as age, financial situations, etc.)
4
Current Research
Continued need for personal finance and
consumer education
– Hogarth, Beverly, & Hilgert (2003)
• Also acknowledge complexity of marketplace and need for a
variety of media to reach specific audiences
• Study confirmed other studies
– households do not necessarily follow recommended financial
practices
• Families learn most from others’ experiences
• Recommend educators provide educational opportunities
– encourage increased knowledge and motivation
– hands-on opportunities to apply this knowledge
• Educators should use a variety of media and audienceappropriate content
– Television
– Radio
– Magazines
– Newspapers
5
Current Research
• First year experience may include
many first decisions (Speer, 1998)
–
–
–
–
First
First
First
First
credit card
car
time living away from home
job
6
Alternative Approach
• Newspaper inserts
– “What Young Adults Need to Know About
Money”
• Joint collaboration between Virginia Cooperative
Extension and Rutgers Cooperative Extension
• Inserts appeared in Virginia and New Jersey
newspapers
• Try to reach hard-to-reach audiences
7
Project Topics
• Wheeling and Dealing: What to
Know Before Purchasing a Car
–
–
–
–
Basic terminology
Comparison shopping
Financing
Insurance
8
Topics
• Does Money Really Grow
on Trees?
– Time Value of Money
• How money works for you
– Savings
– Investments
• How money works against
you
– Loans
– Credit
9
Topics
• Credit Tips and Traps
– Basic credit terminology
– Using credit wisely
– Consequences of overuse of
credit
10
Topics
• Crime Scene
Investigation: Has
Someone Stolen Your
Identity?
– Identity theft
– How to protect personal
information
– What to do if you
become a victim
11
Topics
• Reality Check: Lending
Rip-Offs
– Predatory lending
• Types
• How to identify predatory
lending practices
• Alternatives to high cost loans
and credit
12
Project Web Site
• Real-Life Scenario
– Theme woven throughout the web site
– Questions added to enhance critical
thinking
– Additional activities
– Additional resources
– Supplemental topics
• URL
– http://www.ext.vt.edu/niemoney
– Downloadable .pdf file available
13
Incorporate Concepts into
FYE Courses
• Use individual topics from the newspaper insert
for class discussions and activities
• Use insert’s topics throughout entire course
• Coordinate special seminars and workshops
with residence hall education
• Supplement other FYE textbooks
• Use available media to reach more students
– Use project’s Web site
– Incorporate topics into textbooks
14
Incorporate Concepts into
FYE Courses
• Invite special speakers affiliated with
resource management
– Cooperative Extension
• Specialists
• Agents
– Campus faculty
• Family and Consumer Sciences/Resource
Management
– Community and Business
• Family financial planners
• Financial institutions
15
Example Activity
–
For Credit Tips and Tricks

Search the newspaper credit-related
topics


Federal Reserve actions
Credit card use
Collect credit card applications



Compare APRs, features, fees
Rank offers from best to worst and explain why
16
More Project Information
• Results of data collected for this
project
– Results
– Examples of questions missed
– Additional comments
• What should be emphasized from
the inserts in FYE courses
17
To Order
• Order generic versions of the insert using the
order form or contact Dr. Celia Hayhoe,
[email protected] and refer to publication 354-080
• Order CD-ROM with PDF and Quark Publishing
Files for $30 (includes shipping) from Dr. Hayhoe
at
101 Wallace Hall (0410)
Blacksburg, VA 24061-0410
For More Information call 540-231-3497
18
Additional Resources
• Have/Have Not curriculum
– Funding from National Endowment for
Financial Education
– Focuses on appropriate financial decisionmaking skills for young adults
– Components
• Video (can be used as introduction for discussion)
• Powerpoint presentation with script and handouts
• Brochure with additional resources
– Could be used to supplement project topics
– How to order (available from Dr. Celia Hayhoe)
• http://www.ahrm.vt.edu/Extension/hayhoe.htm
• Program is free-there is a small charge for shipping
19
Additional Resources
• Web sites
– Virginia Cooperative Extension
• http://www.ext.vt.edu
• http://www.ext.vt.edu/niemoney
– Practical Money Skills for Life
• http://www.practicalmoneyskills.com
– Jump$tart Coalition
• http://www.jumpstartcoalition.org
– Consumer Jungle
• http://www.consumerjungle.org
– American Bankers Association
• http://www.aba.com
20
Additional Resources
• Books
– I Can Do It!
• By Marian B. Latzko
• (ISBN 0-9651826-0-6)
– Dollars and Sense for College Students or
How to Not Run Out of Money
• by Midterms by Ellen Braitman
• (ISBN 0-375-75206-4)
– Please Send Money: A Financial Guide for
Survival for Young Adults on Their Own
• by Dara Duguay
• (ISBN 1570717214 )
21
Summary
• Enhance financial literacy of young
adults
– Various media
• First Year Experience courses
• Newspapers
• Technology
• Other audiences have said they
enjoyed the materials
22
References
Braunstein, S. & Welch, C. (2002, November). Financial literacy: An overview of practice,
research, and policy. Federal Reserve Bulletin. Retrieved from
http://www.federalreserve.gov/pubs/bulletin/2002/1102lead.pdf.
Greenspan, A. (2003). Remarks by Chairman Alan Greenspan at the 33rd Annual Legislative
Conference of the Congressional Black Caucus,Washington, D.C., September 6, 2003.
Retrieved from
http://www.federalreserve.gov/boarddocs/speeches/2003/2003092/default.htm.
Hogarth, J.M., Beverly, S.G., and Hilgert, M. (2003). Patterns of financial behaviors: Implications
for community and policy makers. 2003 Federal Reserve System Community Affairs
Research Conference.
Jump$tart Coalition. (2002). From bad to worse: Financial literacy drops further among 12
graders. Press release from the Jump$tart Coalition for Personal Financial Literacy, April
23. Retrieved October 1, 2003, from http://www.jumpstart.org/upload/news.cfm?
recordid=9.
National Council on Economic Education. (2003). Survey of the states: Economic and personal
finance education in our nation’s schools in 2002. Retrieved from
http://www.jumpstartcoalition.com/upload/NCEE2003.pdf.
Speer, T. (1998). College come-ons. American Demographics 20(3), 40-45.
Warwick, J. & Mansfield, P. (2000). Credit card consumers: College students’ knowledge and
attitude. Journal of Consumer Marketing 17(7),617-626.
23
Contact Information
•
•
•
Dr. Celia Hayhoe
Dept. of Apparel, Housing, and Resource Management
Virginia Polytechnic Institute and State University
Blacksburg, VA 24061-0410
Phone: (540) 231-3497
Email: [email protected]
Melissa Chase
Dept. of Apparel, Housing, and Resource Management
Virginia Polytechnic Institute and State University
Blacksburg, VA 24061-0410
Email: [email protected]
Dr. Barbara O’Neill
Rutgers Cooperative Extension
Rutgers University
Newton, NJ 07860
Phone: (973) 948-3040
Email: [email protected]
24