What this country needs is a good money lesson

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May 28, 2013, 7:02 a.m. EDT

Commentary: Financial literacy must be a national priority

By Muriel Siebert

NEW YORK (MarketWatch) — Americans are in dire need of financial competency.

People have to be taught about money. We need to make the U.S. financially literate coast to coast.

I speak from experience. My father died broke after a long bout with cancer. He was a dentist and had a degree in engineering from Case Western Reserve in Cleveland Ohio. Our family moved out of our house into a one-bedroom apartment; I dropped out of college, although Western Reserve — where I was attending at the time — allowed me to continue with my courses. Though I did not obtain a college degree, I’ve received 20 honorary doctorates over the years.

I always knew numbers. I’d get A’s without studying. Numbers talk to me. But when I went to Wall Street, women weren’t paid anywhere near what men were. So I decided to start my own business. For that, I needed a seat on the New York Stock Exchange.

Back then, all 1,365 members of the exchange were men. But in 1967 I purchased the first seat ever sold to a woman. In 1975, I opened Muriel Siebert & Co., which became one of the nation’s first discount brokerages.

After I opened my new office, every young woman fresh from college who wanted a job on Wall Street walked in. So did every widow with money. Soon it became apparent to me that none of them had any real knowledge of finance.

In 1977, I received an unexpected call from Albany: then-Governor Hugh Carey asked me to serve as banking superintendent for the State of New York. Though the offer was untimely for me, New York City is the nation’s financial capital. I put my brokerage firm in a blind trust and took the job.

Over the next five years I got an even broader look at how many people lack the most basic financial information. A parade of panicked teenagers would stream into our consumer services office, their credit maxed out, on the brink of bankruptcy, confused and scared, hoping for help.

One young man with a part-time job brought in his paycheck and complained some of his money had been “stolen.” No one had taught him about taxes. These kids didn’t understand that by charging last night’s dinner on a credit card and paying the minimum balance, they would be paying for that meal for years. I was horrified that these youngsters were financially finished before they started.

When I was growing up in Cleveland, children were taught how to save. We got saving stamps from a vending machine, put them in a passbook and took them to a bank. That kind of discipline doesn’t exist these days — at home or in schools.

In the late 1990s I met with then-chancellor of New York City’s Board of Education, Rudy Crew, and worked out a program to teach high school students the fundamentals of personal finance.

It took a while, but the course — Siebert’s Personal Finance Program: Taking Control of Your Financial Future — went into New York City public high schools for seniors in 2004 and was expanded to middle schools in 2010. The program teaches teenagers the mechanics of debit cards, credit cards, prepaid cards and loans in core sections: Money & Income; Budgeting & Planning; Banks & Banking; Credit & Bankruptcy; Saving & Investing, and Protecting Your Assets/Insurance.

The program is being taught in New York City schools with follow-up testing. At Benjamin Cardozo, a large, highly ranked public high school in Queens, senior class has scored an average of 94 for the last eight years. Teachers there tell me the kids are more interested in personal finance and money more than anything else they study. They want to know about interest rates; how not to get into debt with credit cards, what makes a high- and low credit score. How can they pay for college?

Besides New York, my program is taught in schools in nine other states including North Carolina, Florida and New Jersey. The Muriel F. Siebert Foundation finances the Siebert financial literacy program for the schools.

Moreover, three states, including New Jersey, require at least a one semester course devoted to personal finance. Nineteen other states, including New York, incorporate personal finance instruction into other areas, such as economics.

Financial literacy can be mandated at a local board of education level. The State of New Jersey mandates financial literacy as a requirement for high school graduation.

I will keep pushing for personal finance education to be a graduation requirement in every state. Financial literacy can change lives — and change the nation.

Muriel Siebert is the founder and chairwoman of Muriel Siebert & Co.




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