MI Lawmaker Credit Unions Young people need financial education / Public News Service

A bill before the Michigan Legislature would bring financial education in public schools across the state, requiring high school students to take a course in personal finance.

The legislation passed the Michigan State House with bipartisan support and is now before the state Senate.

Representative Diana Farrington, R-Utica, a sponsor of the bill, said student loan debt and credit card debt are high and many are not saving for retirement as they should. She hopes that financial education at school could help them make the best possible decisions.

“If you don’t learn it at home or if you don’t learn it yourself, it’s a topic that can be missed,” Farrington pointed out. “And financial education is so important in building a set of skills and good habits for our young adults in their daily lives.”

April is National Financial Literacy Monthand Farrington encouraged teens and young adults to talk to their families and local banks or credit unions and ask questions about financial matters, so they could learn the skills before they had to use them.

Beth Troost, executive director of the Michigan Credit Union Foundation, noted that credit unions have existing programs to complement a financial education curriculum in schools. She said that many credit unions exploit what they call students or school credit unions, where elementary through high school students learn to save and plan by making deposits into their school accounts. She added that Michigan Credit Unions “financial reality fairs“, an experiential activity where students simulate budgeting for a month.

“They make the decisions about their consumption of food, housing, and clothing and whatever else they need to do on a budget,” Troost explained. “And they end up balancing their budget at the end and talking to financial advisers. So that gives them a real slice of reality about what the independent financial life will be like.”

Troost added spending, saving and planning to borrowing and investing, it’s important for people to learn the concepts at a young age, so they can develop them at every stage of their life.

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Leslie M. Gill