The problem
Across a number of contexts, a consensus is emerging that students and young adults need to develop a much better understanding of how money works. How bad is the situation? A 2008 study by the Jump$tart Coalition speculated that nearly three-fourths of young Americans are “ill equipped to make critical financial decisions.” This knowledge deficit isn’t merely academic; it has real-life consequences. For example, a 2009 study by Sallie Mae found that undergraduates are running up higher levels of credit card debt than ever before. The New Yorker reported that, in a study of subprime borrowers in the Northeast, there was a twenty percent foreclosure rate of people who scored in the bottom quartile on a very basic test of calculation skills. Ignorance is expensive.

One hopeful sign is an increased emphasis on financial literacy education. That’s true nationally, as seen in the 2010 designation of April as Financial Literacy Month and in other federal efforts to promote financial literacy. It’s also true at state and local levels—for example, in Texas’ adoption of new financial literacy standards for social studies education.

Teachers say they need more preparation
Since educators and political leaders increasingly see financial literacy education as a way to address this knowledge deficit and its negative consequences, a logical next question is: what elements need to be in place for a program to be successful? Annamaria Lusardi, an economics professor at Dartmouth College and a nationally known expert on financial literacy, makes a strong case for one answer: “Teachers are pivotal to the success of financial education.”

And yet teachers themselves state that they are unprepared. A 2009 article in the Journal of Financial Counseling and Planning reported that fewer than 20% of teachers and prospective teachers felt very competent to teach the basic personal finance concepts regularly found in educational standards. As Lusardi points out, “to adequately prepare our students, we first must prepare our teachers.”

Training trainers as a solution
In this context, TG has launched a series of Train-the-Trainer sessions, delivered in person and by webinar, as part of the new TG Financial Literacy Program. There are several advantages to this approach.

One is simply that it expands the number of people the modules can reach. There is a built-in limit to how many sessions an organization’s in-house trainers can personally deliver. Offering sessions to boost the knowledge and comfort level of trainers will obviously boost the number of students engaged in this training.

Another advantage is that the practice can lift the quality of experience for teachers and students. When potential trainers have completed a Train-the-Trainer session, they’re likely to be more focused on the students and the content than on their own sense of being unprepared.

Sharon Cabeen, TG’s Director of Financial Literacy Operations, stated that one of her principal goals is to “work collaboratively with organizations whose mission and values also support the teaching of good money management to our high school and college students."

Offering Train-the-Trainer sessions represents a key means of meeting this goal. Referring to the importance of this effort, Cabeen noted, “Of course, it's critical to reach students, to get their attention focused on their choices and how money fits into their lives, to teach them the skills they'll need.” She believes the best connections occur when life makes the lesson directly relevant to the student — making financial literacy education even more important at a young age. For this reason, she has “become more impassioned about hitting financial literacy at every level, including educating and empowering the adults in students' lives. Through Train-the-Trainer activities, TG can provide organizations and administrators, parents and teachers of high school students, and other adults, with the tools and knowledge to help young adults when the teachable moments occur. Better yet, we'll help these groups and individuals develop some passion for teaching financial literacy skills — and that passion to teach can be contagious.”

Given the depth of the financial literacy deficit, training trainers represents one more tool to boost students’ understanding of basic financial realities.

Ben Loya is a regional account executive with TG serving schools in MASFAA. You can reach Ben at (800) 252-9743, ext. 6718, or by e-mail at ben.loya@tgslc.org. Additional information about TG can be found online at www.tgslc.org.