Education That You Can Take to the Bank

It’s not surprising that a group of third-graders in Los Angeles, given a little lesson on banks, were more interested in bank robbers than bankers. When pressed, they said banks were important because they hold money, and “if we did not have any money we would be poor.�

They don’t know much more by the time they hit college and are greeted by myriad banks eager to give them not just checking accounts but credit cards. And all too many take the cards, because, as they tell their parents, “They’re free!�

Obviously, they get almost no education in money management before college and little more thereafter. How many grown-ups truly understand credit cards--grace periods, finance charges, their right to dispute billings? No wonder credit card spending is up, along with credit card debt, credit card delinquencies and personal bankruptcies. “Older people come in (to banks) with not a clue to balancing a checkbook,� says Nancy Hermanson, personal service representative at First National Bank in Valley City, N.D.

One would think that schools could provide some personal finance along with personal hygiene and phys. ed., math and civics. Math texts cover dollars and cents, and sometimes even “consumer math.� But they emphasize arithmetic formulas (assessing interest), not principles--calculation rather than application.

Into this information gap comes the private sector--a good thing, if schools remember to inspect the hand that feeds them. Some of the resultant “consumer education� is blatantly commercial--nutrition posters featuring a particular brand, guides to dental health featuring particular toothpastes.

Some offerings are more objective. Consumers Union gives schools discounted (in some cases, free) magazines with study guides: Consumer Reports and Zillions, its children’s magazine. Zillions does emphasize purchase--product quality, price comparisons--with brief forays into questions of allowances and saving, but it’s a valid emphasis. The market for 4- to 12-year-olds now represents $75 billion a year in discretionary spending, $8 billion of it spent by kids themselves. That’s why the magazine, founded in 1980 as Penny Power, changed its name to Zillions last year.

But the care and handling of money is generally left to those in associated fields: banking, credit, investment, insurance, trade. So far, only bankers have taken up the challenge.

Much of what’s put out isn’t for kids at all, given the remedial needs of the whole population. But the children’s material is usually tailored to children. Citibank’s “Dollars & Sense� program increases in sophistication from fifth-grade level through college. Accompanied by glossaries of terms, wall posters and letters to parents, Citibank’s materials pose questions of budget and saving (snacks, bikes, boom boxes, for the youngest), loans and credit, even financial adversity (Dad loses his job; grandfather gets sick).

These are purely topics for discussion with “no right or wrong� answers, says Kathy Frick, a teacher at Dunstan Jr. High in Jefferson County, Colo., and a 1991 Colorado Distinguished Teacher. The idea is involvement. As Frick says, it’s better “to send them home with two problems that they think and talk about than with 40 problems that have no meaning.�

Programs are available for younger children. The American Bankers Assn.’s Personal Economics Program provides local bankers with booklets, brochures and videos--even a comic book called “Meet the Bank� for primary grades.

Much depends on the banker involved. Nancy Hermanson visits schools with such materials and also brings classes back to the bank for a tour, an ATM and check-writing demonstration and some basic information, such as: “You can’t write checks if you don’t have any money.�

The Los Angeles third-graders above got ABA materials without Hermanson, and they still got the basic idea that banks mean safety for money. Some absorbed real economic principles: “If banks are low on money,� said Andrew Bagg, now a fourth-grader, “they’ll take some of yours and pay you back, giving you your money and some more besides, because they got to use yours.� Some parroted back the whole ABA pitch that “banks help us, our families and our town to be happy, safe and well.�

It’s the potential pitch that people fear. “They were scared we were going to sell them on First National Bank,� Hermanson says.

But the bank, she says, only wants to make people more knowledgeable--an advantage all around--and “show them that we care.� Citibank, which puts only its logo on the materials, states similar aims, wanting, says Richard Srednicki, general manager of its Visa and MasterCard division, to be “looked at as a responsible corporate citizen.�

Whatever edge that gives them, it seems like a fair exchange.