378: Forcing Schools to Teach Financial Literacy

Buck: Welcome back to the show, everyone, today. My guest on Wealth from your podcast is you Only as Banal. She is a Brooklyn-born ball of energy with an intimate knowledge of financial education, culture and politics in America. She’s known on the Internet as Ms.. Be Helpful, and she’s a millennial financial educator who started her career as a teacher and now serves as the director of educational outreach at NexGen Personal Finance. She’s currently on a political roller coaster ride across the country, trying to convince lawmakers to make personal finance a high school graduation requirement. You now welcome to Wealth from your podcast.

Yanely: So excited to join you. I love that intro. I definitely am on a political roller coaster ride. Yeah, those are facts.

Buck: Yeah. Interesting. Well, good. Well, so, you know, you’re on a mission, right? You’re on a mission. And your mission is to promote financial education in schools. Where. So where does this all come from? What’s inspiring this?

Yanely: Yeah, no, it’s a great question. It comes from, like, honestly making a lot of mistakes myself. You know, I’m first generation daughter of immigrants. My came to New York City from the Dominican Republic. No English, no money, no network, you know, no education. They didn’t actually go beyond the third grade in school. And so with the life that, you know, they kind of have lived, like they didn’t really have those lessons to kind of pass down to their children. And so a lot of that was me learning through the school of hard knocks and making a lot of mistakes with credit cards when I was in college and shortly after college. And so once I kind of realized like, okay, I’m teaching and I’m in a system that hasn’t changed in decades, you know, from when I was in these seats to now being in the front of the classroom, nothing is different.

And that kind of scared me. And I realized, like, even though I thrived academically and I did everything, I was quote-unquote supposed to do, you know, I still made a bunch of mistakes. And specifically in my financial life because I didn’t have a lot of guidance or education. So I kind of knew that I wanted to make it a personal passion of mine, but also kind of pivot my career to do financial education work when I didn’t really know how to do that. So I’m just glad I found out there were tons of organizations out there actually trying to get this done and not just offering resources to schools, but actually trying to figure out the legislative front, like how do we actually get the laws to require this class to be a mandatory part of high school graduation requirements?

Buck: So tell me a little bit about the mission and what you’re trying to promote. Exactly. I know, you know, it’s financial education, but maybe a little bit more specific than what you have in mind.

Yanely: Yeah. So it can vary a little bit. So when people say like financial education in schools, that could be very general and it is just a general statement to say we want to do, we should teach financial literacy in schools. When I started my career as a teacher, I started to really learn the ins and outs of like how teaching and actually, you know, public school education works. So there’s layers to kind of how things get done. And the very first layer is this standards. There are a list of standards, right? And it’ll say like, you know, compare and contrasting interest rates on loans. Like that’s a standard. You have to make sure that you teach that at some point in some way. But it doesn’t say when you teach it how long you teach it, how you teach it, what curriculum you use to teach it. It just sort of names this big general thing like this topic that has to get taught.

Buck: You’re talking about the bills, You’re talking about the bills that you’re trying to get through, right?

Yanely: Well, just generally right now, first, kind of like the infrastructure, like the framework of how education works, because the thing and the reason why I start here is because when you introduce a bill, you have to be really specific in that bill language about what exactly you’re creating. Because what happens is a lot of folks will say, Oh, there’s already financial literacy in the standards, there’s already financial literacy standards. Okay? But as we know, like when you’re a teacher, you know that like a standard doesn’t really mean anything if it’s just a floating standard, it’s got to be actually taught within a course, a class. So the classes that are actually taught those have lessons and objectives that are aligned to the standards. So it’s like if it’s like compare and contrast interest rates on loans, then the actual objective for a lesson would be like today we’re going to compare and contrast, you know, student loan interest rates or car loan interest rates or home mortgage rate, you know, loans.

And so in that specific lesson, the students are doing something that’s very specific, that is aligning to a standard that has to be addressed. But if it if there’s no lesson and there’s no class that’s going to have those standards in that class being taught during that time that the students take the course, then the standards are sort of useless. They’re just floating out there and they’re not actually being taught. So when we do, we think about the financial education work being done. Now there actually are a lot of states around the country that already have financial literacy standards in place at the state level. So their state has, you know, a list of standards that need to be taught. But there’s no class. There’s no course where those standards are actually being taught. So it’s just this like wish lists like, oh yeah, he has this list of all these standards that we want to be teaching. But if there’s no actual course that every student goes through where the standards are going to be taught through lessons and objectives, then chances are it’s just not going to happen.

Buck: So standards are not the same as requirements. Is is bottom line rate like. So you there’s almost sort of a suggestion that curriculum should include this kind of thing, but no specification and no sort of lowest common denominator that you have to have in order to graduate. That’s the idea.

Yanely: And bingo, it doesn’t mean it’s required. And so we organization where I work at now and UPS its stands for Next Gen Personal Finance, which is a nonprofit organization that said you know what a lot of reasons why schools don’t teach this stuff is because they don’t have it in their budget. They don’t have enough money to like, get the curriculum and to be able to kind of put this together. So by creating free curriculum, offering it online for free, it kind of eliminates that barrier. So any school with any budget or lack of budget can still get this done. And through kind of looking and researching all the different states and all the different legislative initiatives that have happened over the past few years, we’ve kind of compiled data to show like, this is the best practices, this is what works.

And so there’s like five things that need to be included in a bill in order for it to really be effective. And the first thing is it’s got to have a specific language around the time. So it’s got to say 18 weeks minimum of instruction, which is like a semester long class, has to be a semester dedicated to personal finance. So it can’t just be like, Oh, well, there’s some standards that they get taught in like a, a business class or like some marketing class that teaches like budgeting for two weeks that can’t be deducted, that doesn’t count. It’s got to be like a full semester of dedicated personal finance, standalone instruction. The second thing is it’s got to be really clear when it’s happening, because I think the tricky thing is for teachers and I mean, I used to be a teacher, so I remember being told one day to the next that like this has got to be implemented.

You need time. Like you need time to plan, you need time to kind of put out, you know, lessons and activities and do your research and prepare your materials for your instruction. So we can’t just throw it on teachers and say, Oh, starting this fall, you got to start doing this. So with a two or three year transition plan, teachers have plenty of time to prep and the school administrators have time to train teachers who themselves maybe don’t feel like they’re fully confident with personal finance topics yet. So gives time for training. Another piece is really just understanding how local control plays a role in this, because a lot of states, they really value the local control, meaning that while the state can say like what has to be taught, schools get to decide how it gets taught, so what curriculum they’re going to choose to address this, what specific courses they’re going to offer, whether it’s like a money management, whether it’s a personal finance, or whether it’s, you know, financial literacy. Like the schools kind of get to decide how it looks and feels within their school building, even though it might be, you know, coming from the state, the guidance, the specifics are really left, you know, to be something that’s made up. The decisions that get to be made at that local level.

Buck: You had mentioned, I think, that there are offline here that there was some data that that the financial education at this level actually works. You want to talk a little bit about that?

Yanely: Definitely. So I’ll tell you, this is super important because you know, when you start talking to lawmakers, they have so many people coming to them, you know, emailing them, calling them, tweeting at them. Right. Like this issue really matters. This is my issue. This is what you have to champion. This needs to change. This is what we want to see. And the most important thing for them is to decide what are they going to prioritize. They can’t pass every single bill they can’t make everything a law. So they have limited, you know, time and priorities. And so they want to look at what’s data back to what is really, you know, data-driven. So what we’ve done is compiled all of the evidence that shows that financial education actually improves behavioral outcomes because the number one criticism around financial literacy education is that while you can memorize all these, you know, facts and stats, if it doesn’t change your behavior, what you’re doing with your money and it’s not actually, you know, action-based, then it’s not going to work that can be effective. And so what we’ve done is put together all of these resources, different, you know, studies and from sight, from all different universities, from all kinds of different places to show, okay, this is the impact that it has on behavior. So the first thing is credit behaviors. When you look at like a ten-year longitudinal study, the specific one I’m referring to is from Utah, because that was the first state that actually required of personal finance, the master class at the high school level. So what they did was they taught the course. Ten years later, they compared let’s look at the students who had the course and the students that didn’t have the course. And the number one biggest difference is credit behaviors. They had better credit scores when they borrowed money to pay for college. The students who had the class were much smarter about the way they borrowed money.

They borrowed at lower interest rates, and they maxed out their federal loans before even considering private lending or borrowing from private sources. So that kind of decision making know how. Like if you aren’t taught explicitly that there’s a difference and that this is how to go about doing it, chances are you just you don’t know when you don’t end up figuring it out until you make a couple of mistakes. A couple of other things, too, is just like the likelihood and the frequency of participating in payday lending, which, you know, is kind of one of the worst ways, probably the worst way to borrow money in this country. And a lot of states don’t have any kind of real strict regulations around payday lending. So you can see in certain states that people are borrowing with 600% interest on these payday loans.

And so when you notice is when students learn about, you know, interest and how it accrues and the way that healthy borrowing looks, they’re able to kind of steer clear of some of those payday lending practices, especially, you know, the predatory ones that kind of hyper saturate certain neighborhoods where there aren’t really many banks available. Right. And then also retirement savings. It’s a big difference when you look at school-based research that shows that students who get their first job in high school, which a lot of students tend to work because they want to get a car and they want to, you know, go out. And so so once they’re 16, 17 years old, they actually know that they can open a custodial Roth IRA when they get their first paycheck. Once they have earned income, they actually see a big difference in the number of students that begin investing through custody retirement accounts, as opposed to the students who don’t even know that that’s an option to them and they don’t take advantage.

Buck: You know, I’m I’m always curious about like financial education is an interesting topic because like like anything else, there is a lot of different belief systems in terms of exactly what, you know, financial education should look like. And when I think about sort of institutionalized financial education, the only concern I have a little bit in terms of public education is who the special interests are potentially are in there. You know, and, you know, we in particular, we you know, this audience tends to be alternative asset group and a little bit suspicious of Wall Street and all that. I don’t know if you’ve thought about this, but I’m curious what you’re you know, what your thoughts are on those issues.

Yanely: Yeah, I mean, I’ll tell you the truth, I’m extremely suspicious. And in general, whenever I hear financial education is being Tom like, who cares? Because you’re right. You’re right. And I will say the the work that we’re doing at the nonprofit is really just trying to promote unbiased financial education, which I think the number one thing like if you are teaching financial literacy in a school set in a public school setting one public schools are supposed to be the great equalizer, which means we all come in regardless of our backgrounds.

00:12:24:24 – 00:12:44:08

Yanely:

We’re all getting an equal footing in terms of a chance to be able to take opportunities that are available to all of us. So in order to teach in a way that kind of prepares all students to have equal access to these opportunities and to usage of tools available to us, we have to be doing it in an unbiased way, meaning we can’t be promoting or dissuading students from certain things. We just have to be exposing. It just has to really be purely exposure. Hey, this is what’s available. Here’s what’s out there now. Do the critical thinking work it takes to decide whether this makes sense for you, given your family’s situation, your situation, your goals, the very specific things around your, you know, plan for your life and your financial situation.

So, you know, the A.P. curriculum is actually what’s really hard to maintain that kind of unbiased approach. But there’s so much curriculum out there. So even when I do work in terms of like working with lawmakers to say, hey, we here’s why we want to make a case for financial education, technically I’m there representing an and Mission 2030 Fund, which is an affiliated organization that does a lot of advocacy to, you know, get actual legislation in place.

And when I talk to them in that way, the first thing they wonder is, well, okay, well, who you know, where are you coming from? Where are you pushing a specific curriculum and what does that mean? So we say, yeah, we have a curriculum and it’s free, but it is completely unbiased. We’re not pushing or dissuading. We have certain optional units. We have cryptocurrency basics in the curriculum. We’re not promoting crypto. We’re also not dissuading students from using crypto. We’re actually just exposing them to what is it, how does it work? Why are certain people, proponents of it, why would other people be against it? Let’s learn about it and then you can make your own decision.

So I think that’s a key with all aspects of the personal finance topics being taught like credit. There’s certain curriculum that says teach students to avoid credit at all costs, teach students never to borrow money. You know, that’s not unbiased. So from our perspective as an organization, we try really hard not only to create unbiased resources and curriculum that’s always free so anybody can use it to teach you, but also to get teachers that understand the level of understanding, to get teachers on the same page as us, that your job as an educator is not to convince students of your purpose of your perspectives, of your views.

When it comes to your personal finances, it’s to expose them and give them the tools to be able to make the decision about whether it makes sense for them or not. But, you know, we’re not here to kind of tell them never open a credit card or don’t ever take out loans for college, that that is not education. Right. That’s evangelism. And our goal is really exposure..

Buck: Well, there are certainly certain things that you can teach that I think would be really useful that don’t necessarily that are generally agnostic like accounting, for example. I think accounting is, you know, accounting 1 to 1. I think, you know, most adults, even professionals and physicians and, you know, highly educated individuals do not have basic accounting skills and, you know, and things like that are potentially really would be potentially really useful for kids to kind of learn and look at the perspective of life through that lens. One curious thing, it’s funny, like and I again, these are I mean, these are kind of maybe putting the cart before the horse, so to speak, because you’re just starting in the infancy. But have you thought about like, you know, who would teach these things too? Because sometimes, you know, the best people to teach a class are people who are financially successful, right? It certainly also it’s certainly also probably more inspiring to kids than to hear it from, you know, their teacher who they know is broken. I mean, and that’s a sad truth, by the way. I don’t think.

Yanely:

No, you’re absolutely right. And I say that because I used to be a teacher, in other words.

Buck:

Right, right, right. But have you given any thought to that? I mean, because like, part of what I’m thinking is I bet you there’s a lot of people out there who would love to go in and, you know, to teach and you know how to be role models in that regard as volunteers. But is that something you guys thought about at all?

Yanely: Yeah. So what I’ll tell you is a lot of the research shows that volunteer-based models don’t tend to have the effectiveness of other models where there’s actually a dedicated adult that has the consistency of being able to teach just with students. But we definitely think about the, you know, the teachers who are teaching this. So, you know, I mentioned a little earlier, but because education is so highly localized in our country and in the United States, specifically, it’s not something where the federal government can say, okay, this is going to be under math or this is going to be social studies or this is going to be on every corner, but every state sort of makes the decision about where it’s tucked under which department and who teaches it at the state level. So it actually looks different in every state. And we’ve gone from eight states to have a full semester requirement to 19 states from in just the past 3 to 4 years, we’ve more than tripled. So when you think about, okay, how can you go from 5 to 8 states to now having 19 states, it’s showing the success stories from the states that have done this and saying, okay, look, this is what Utah did, this is what’s happening in these states. Like this is what’s working. And so like sharing that and the number one thing that we use to kind of promote this and share with lawmakers how to make it effective is teacher professional development training. So regardless of which department or which teachers your state chooses to to use to get this done, those teachers need access to high quality professional development because the reality is if they grew up doing things a certain way, 100% guaranteed, the students that they’re teaching today are not doing things that way because of mobile banking, because of online banking, because of trading platforms, because of cryptocurrency, because of all kinds of things that today exist and are like the go to option for this generation, which is like mobile first and Internet natives versus the teachers who are teaching them that may not have had that experience growing up. So we try to really make sure that no matter what teachers are teaching or whether you’re in the math, whether you’re under social studies, whatever licensure or certification that you have, that you have guaranteed access to high-quality professional development training that’s going to help you be caught up on 21st relevant 21st century relevant trends that your students are going to actually be able to relate to.

So, for example, we create current events videos every week like Venmo versus Cash Up, you know, which one’s better for consumer protections and which one kind of save is more safe for your cash to kind of be sitting in that account. Like, why? What are the pros and cons of each? Because the reality is, while most teachers aren’t using Cash App and Venmo, all of their students are.

So it’s really important that the teachers, whether they do it or not, that they learn how to teach it and present it to their students in a way that’s engaging, that’s relevant, because chances are, if they don’t include it, they’re going to it’s going to go right over their students had this course is just going to be another, you know, class on the schedule that students are rolling their eyes when they see it rather than being like, oh my goodness, this is exactly what I need to be able to apply it right away with my money.

Buck: Right, Right. Interesting. So, you know, we talked a little bit again, offline about generally this conversation that we’re having probably is more likely to perk the ears up of parents, not necessarily the students or millennials who are may not be listening to the show. But so what what what would you like? I mean, in an ideal world, what would you like parents to do to to help the cause? And how can they help the cause?

Yanely: Yeah. So you know what? So I took a couple of years and I just started actually, like, writing a book and thinking about what was the message that I wanted to leave in my book. And I think the biggest thing that I ended up deciding was at the very end of the book to make it a call to action that you use your voice as an advocate, right? Especially as a parent, you’re constantly from the day your child is born, your advocating for your child. And so how do you extend that further into advocating for what they need beyond them being 18? You know, because once they turn 18, they can sign on the dotted line with or without your presence, to take on loans, to take on debt, to do all kinds of things financially.

So how do we prepare them to make the smartest choices from that point forth? We have to make sure that they’re getting the education that equips them with the just basic knowledge, basic tools, basic, you know, understanding of what is available to them. And so, you know, for me, that means parents are tweeting at their local representatives and senators at the state level saying, you know, there’s this bill that is happening that’s kind of proposed in our state that talks about financial literacy being a required course. I would love to see this happen. You know, tagging the senators, tagging the the folks who, you know, that are sitting on the Committee of Education, both on the House side and, you know, both sides of the chamber and on the House of Representatives and the Senate side. So you have to make sure that you’re kind of like doing a little bit of that digging to see who are the committee members on the House and on the Senate side who focus on education, because those are the folks that will have to vote yes to push this bill forward.

So first job of a parent is find out is there a bill right now? If not, is there something in the works? Are people talking about this? Let me send some data to say that as a parent of a kid who’s either going to be in high school or who is in high school, this is an issue that I care about and I would like to see this happening in our schools, because once there is a champion in terms of a lawmaker who is serious about getting this bill passed, then they’re going to be able to kind of, you know, reach out to their constituency and see who wants to testify in support of this thing. If you’re a parent, if you have kids, they can go and testify in support. That is the most powerful testimony that you can provide, is to have a teenager come in and say, I need this class. I’m confused about what to do with my paycheck. I don’t know how to invest in the stock market. Kids are telling me to do this. And then another doctor told me not to do this. And I don’t know who to trust or what’s true or what’s not. And so a class like this can be really, really influential. And I think it has to come from them, their parents, from the teachers, from the community, because at the end of the day, advocates and lawmakers are only really going to do what the constituents want to see getting done. And that means that parents and students have to advocate for that to speak up and say this is this matters and this is what we want to see in our schools.

Buck: What tell us a little bit more about your organization and how people can, you know, get involved or look up some of the resources that are involved?

Yanely: Yeah. So the first thing I would say is just the bill tracker. So if you Google NGPF., which stands for Next-Gen Personal Finance, if you look up the bill tracker, you’ll be able to see all the financial education bills that have been proposed in the current session on most, you know, most recent so previous session. And that is just a quick way to see what’s going on in your state right now. So we’re recording this in May of 2023. There’s 93 bills that have been introduced in 32 states. 78 of these bills are still active in 29 states, and six bills have been signed into law in five states. So there is a lot of momentum. This is a national movement, like there’s stuff happening. And so you can clearly see on the map, you can click on your state and just see like, is there a current bill? Is it still active or did it die on the floor or die some point in the process of trying to become a law, you can see which representatives or which senators are co-sponsoring or authoring the bills are promoting the bills, and then you can read the language to see is it off? Is it like just to offer a class to every kid or is it to require that every kid takes the class? Those are different. Having elective classes some students can hop into. That’s a great first start. But the reality is if every single kid doesn’t get it, then only the lucky few who sign up for that elective are going to be able to get access to all this information.

And we know every single kid needs it. Regardless of whether they go to college or not, they’re going to get a paycheck. So they’re going to need to know what to do with it. And so it’s really important, I think, that folks just know that they have a quick, clear place to find out if there’s a bill in their state where it is in the process and who they can contact to kind of figure out how to get involved and looped in into supporting this bill. And it could just be as quick as posting on Facebook or Twitter to just say, hey, did you know, you know, this bill is active in our state, like, let’s get a petition going, Let’s write to our local representatives and just let them know that we really care about this issue and we want them to vote yes at the next vote so that we can keep pushing this forth.

Buck: Well, you, Nellie, you’re doing good work there and we wish you all the best of luck. And hopefully you get some people here involved and on the on the bandwagon here and start bugging the senators and Congress and all that. So thanks so much for being on Wealth Formula podcast.

Yanely: Thank you. This is so exciting. If anybody is really interested in connecting, feel free to head on over to DPF Talk. My information is on our website and I’ve been part of the full team since 2018, so I’m one of the key members there doing all this work. But also I do post on social media as might be helpful, like you mentioned earlier and, and my book is out as of mid 2023 called Mind Your Money. And the thing about the book too is I tried to talk a lot about this advocacy work, but also by telling my story too, because I think it’s really important for people who don’t see themselves reflected in like your traditional typical mainstream financial content to know like this and this can apply to your story even if it’s not like something that you feel like has been a natural call to action for you. It can still be something that really moves you and that can transform your life. You know, in my case, I really didn’t get into money at all until way later after multiple degrees and I and none of my degrees had anything to do with money. But once I figured it out and realized how impactful it was, it really became a core part of my career and my life. So I wanted to kind of share more personal stories as well, to let people know that there’s a connection there.

Buck: That’s great. Yanely Espinall, thank you very much for being on Wealth from your podcast. And we’ll be right back.