The Need

American students lag far behind their international peers in financial and technology education. Even more unsettling, black college students represent just 12% of the workforce. According to the Joint Center for Political and Economic Studies think tank, black STEM students are under-represented in higher education at a far lower rate than their white and Asian-American counterparts.

The World of Money Institute fills a critical need for youth financial, technology and business education. The lack of education in these disciplines may lead to poor health, emotional anxiety, decreased quality of life, generational financial product victimization and lower college and career attainment levels. The cost of unwise financial decision-making and planning often is shifted to the community, state and nation through higher prices for financial products, and greater use of public ‘safety net’ programs.

Now more than ever, World of Money is needed to give our youth basic financial planning tools to maximize their longer-term financial well-being and to balance consumer and investor behaviors. Recent survey data shows that 38% of teens say that they are unsure or unprepared to manage their own banking and personal finances [Capital One, As High School Graduates Open their Gifts, Parents Have Key Opportunity to Talk Money Management, June 14, 2011, http://phx.corporate-ir.net/phoenix.zhtml?c=70667&p=irol-newsArticle&ID=1573673&highlight].

President Obama’s Advisory Council on Financial Capability issued a report on February 19, 2013, offering 15 recommendations designed to assist the American people in better understanding financial matters and making informed financial decisions. The Council’s first major recommendation was a focus on youth. Namely, the importance of integrating important aspects of personal finance into the teaching of math and English language arts Common Core State Standards for K-12 education. Unfortunately, as public schools are increasingly cash-strapped, especially in lower-income areas, the funding is not readily available to add this valued and essential curriculum into the regular school day. Further, in addition to feeling over-burdened, many teachers report that they are intimated by any requirement for them to teach personal finance courses in which they have no training or personal expertise. World of Money is specifically acknowledged in this report as an answer to this educational dilemma.

Further, while schools might be the ideal place to deliver financial and technology instruction, the fact is that it does not occur in schools where the majority of black students attend. More than half (57%) of parents with kids in high school and college gave schools below-average or failing grades in teaching kids responsible spending, with more than one-third (35%) giving a straight out ‘F’ [American Express, No Triple ‘AAA’ Rating for Schools that Fail to Teach “Safe Spend,” August 10, 2011, http://about.americanexpress.com/news/pr/2011/safespend.aspx]. World of Money exists to fill this gap in the education of America’s black youth. Having basic financial planning tools encourages youth to become family team players, maximizes their longer-term financial well-being and teaches them to balance consumer and investor behaviors.

Notably and encouragingly, teens themselves have indicated a strong interest in becoming more financially educated. In fact, high percentages of teens indicate they are particularly interested in learning more about basic personal finance topics such as budgeting (80%), saving (75%), checking accounts (68%), and investing (67%) [Capital One, Capital One’s Annual Back-to-School Shopping Survey Finds Current Economic Environment, School Budget Cuts Will Impact Back-to-School Spending This Year, July 31, 2012, http://phx.corporate.ir.net/phoenix.zhtml?c=70667&p=irolnewsArticle&ID=1720340&highlight] In addition, 86% indicate they would rather learn about money management in a class before making mistakes in the real world [Charles Schwab, 2011 Teens & Money Survey, April 2011, http://www.schwabmoneywise.com/public/moneywise/calculators_tools/families_money_surveys/teens_money_survey?cmsid=P-4579457&lvl1=calculators_tools&lvl2=families_money_surveys].

Finally, youth urgently need to attend our Institute as researchers have documented a “snowball effect” in which early efforts in financial education exponentially increase the likelihood that students will pursue more financial education as time goes on, including informal learning through books, magazines and seminars [University of Arizona and National Endowment for Financial Education, New Evidence Shows Positive ‘Snowball Effect’ of Financial Education – Cumulative Education Leads to More Financial Knowledge, September 6, 2011,http://www.nefe.org/PressRoom/News/APLUSWave20/tabid/1041/Default.aspx].