Students in a finance course at Waipahu High School are spending their lunch break a few days each week setting up accounts and taking deposits at an on-campus HawaiiUSA Federal Credit Union office. Customers are other teens and school staffers.

Through the banking operation, a school-business partnership in place two dozen years now, “students get to practice what they learn as well promote savings to their peers,” said Brent Murakami, who teaches the elective. Among the students ready to offer advice on the merits of personal savings and financial literacy are Adam Lake and Christine Alonzo, both seniors.

Both say the school’s business electives are prepping them for matters they’re sure to face after graduation.

“Having these classes helps us understand the importance of money,” Lake said. “I didn’t know how much it was to go to college. Now, knowing that and being able to budget my money … that’s going to allow me and other students here to understand how to afford to go to college without being in debt.”

Alonzo, who also holds down a weekend job as a credit union concierge at an off-campus office, added that the school’s “business pathway” has helped her “pick the right colleges” based, in part, on affordability. “It’s important to know how much college costs. Because we’ll need to pay it off (if loans are in the picture), we can figure out ourselves how to do that.”

No written policy in Hawaii

Lessons in money management are useful, especially in a state where high school grads face daunting cost-of-living issues, not to mention the nationwide rising price tag for a college education.

Hawaii’s public school system has no written policy regarding financial literacy. Rather, the decision to fold it into instruction rests with individual schools. “This is in line with an emphasis on student voice as part of individual school design,” said Monica Mann, director of the Instructional Support Branch under the state Office of Curriculum and Instructional Design.

“Schools are encouraged to make curricular decisions that best meet the needs of their school communities,” Mann said. Because the state Department of Education “wants to continue to provide maximum flexibility and choice, there currently are no plans to change this practice.”

Still, financial literacy advocates make a case that Hawaii and other states with similar practices should include requiring personal finance proficiency as a graduation requirement.

The “National Report Card” on state efforts to improve financial literacy in high schools, prepared by Champlain College’s Center for Financial Literacy, contends that regardless of when a young person’s formal education ends, they will be thrust into situations where they need to know how to manage daily living expenses. So, high school seems the most logical place to deliver personal finance education.

Hawaii among ‘F’’ states

In the latest report card, issued in late 2017, Hawaii was among 10 states that received an “F,” flunking for offering “few requirements or none at all for personal finance education in high school.”

Five states got an “A” for their efforts. And Utah — the sole state tagged as worthy of an “A+” — was commended for requiring that all high school students take a half-year course exclusively dedicated to personal finance topics, as well as an end-of-course assessment exam created and administered by the state.

Further, in Utah — where general financial literacy is a funded mandate — educators teaching the course must obtain a specific endorsement in general financial literacy that includes coursework on financial planning; credit and investing; and consumer, personal and family economics. The state also provides educators with resources and professional development opportunities.

High schoolers and finance by Honolulu Star-Advertiser on Scribd

Financial literacy in Waipahu

As one of Hawaii’s schools offering financial literacy education, Waipahu High requires sophomores to take a course called “guidance,” through which they take stock of prep needed for higher education or workforce entry. Some concepts, such as personal budgeting basics, are included.

Through that course, “all of our students get a taste” of how to manage their resources, Murakami said.

In addition to the finance course, the school offers an elective in accounting. Students in that course take part in a VITA (Volunteer Income Tax Assistance) program, through which they help low- to moderate- income households prepare state and federal tax returns at Leeward Community College, said JoAnn Facuri, a technology coordinator and former finance teacher at Waipahu.

“We want to give students opportunities. We want to give them real-world experiences,” Facuri said.

Murakami added, “They live in a world in which materialistic things are very important to teenagers, and they all want the best and latest thing. When we start talking about wages and income, and what it really amounts to after taxes, they are pretty shocked.”

Some class activities quickly reveal realities tied to basic needs, such as transportation. Laughing as she recalled an in-class budgeting game, Facuri said: “One kid started out saying, ‘OK, I’m going to get a BMW.’ By the end of the game, that “want” deflated, with the student saying: “‘I can’t afford it. I’m going to take the bus.’”

At Pearl City High School, Daphne Okunaga teaches Introduction to College Math, which includes projects tied to financial literacy. One based on personal banking strategy has proved popular — even with students who might be susceptible to senioritis during the second half of their 12th-grade year.

Aiming to “mimic life on a very small scale,” students handle faux credit-debit accounts. For example, for income, Okunaga cuts “paychecks” for teens who show up for class promptly and turn in homework. The project wraps up with an auction at which students use their account balance to purchase items such as poke bowls, T-shirts, chips and candy.

“Some kids have said that the auction was eye-opening,” Okunaga said. “Things that they wanted, they couldn’t get because other students had more money and easily out-bid them.” The takeaway is that diligence and responsible spending can pay off.

“It was pretty powerful that they could see that,” she said.

Lessons for Pearl City pupils

Pearl City High also takes financial literacy on the road. On a field trip to a car dealership, students get the lowdown on options for new and used vehicles as well as lease options.

“They walk through credit scores and financing options,” Okunaga said. “And they also learn about interest” calculation — as in: “How much are you spending by the time you’ve made your last payment on your $25,000 car?”

Okunaga maintains that teens in Hawaii’s public K-12 system could also benefit from drafting a tenable high school exit plan.

“I would like to see every student have a plan so that the day they get their diploma, or even if they don’t … the day after their last day of school they have a plan. ‘I’m going to go to this community college and here’s how I’m going to pay for it; or I’m going to go to this university, and here’s how I’m going to pay for it; or I have this job lined up already.’”

In some cases, she said, “I feel like it’s too ‘up in the air’ when they leave.”

Over the past five years, the University of Hawaii at Manoa has ramped up its financial literacy effort. Between 7,000 and 9,000 students are now reached every year through workshops, coaching opportunities and social media messages, said Stacy Miyashiro, who serves as coordinator for a peer educator program.

Among the mandatory elements in new-student orientation is a session on spending-saving-investing basics. “We talk to all the freshmen about budgeting, and about setting goals,” Miyashiro said. Based on student response, advice that stands out as a top “aha moment” is the “three ‘Rs’ — refuse, reduce and replace,” which applies to students at risk of blowing their budgets.

They are advised to take aim at something they buy on a regular basis. Get coffee five times a week? How much can be saved in a week, a month or a year by refusing to buy it? How much saved by reducing coffee shop visits to three times a week? Or what happens if the per-cup buy is replaced by buying a coffee machine?

Miyashiro trains UH students to serve as peer educators. They’re tasked with conducting outreach work at the Manoa campus as well as in some public high schools, through a pilot program. There tends to be more buy-in among students, she said, when the advocates are in the same age group.

“If somebody older does it, it’s like: ‘My mom’s nagging me again.’ They tune out.” With peer educators, “It’s more of a conversation (as in) ‘Hey, you know what I did?’” That approach, Miyashiro said, “makes them more willing to try” to stick to a budget or map out thoughtful financial goals.

How to get a credit card?

Among the most frequent questions Miyashiro’s office fields from students: “How do I get a credit card?” Her standard response is that “credit can be a really good thing, if you manage it well.” To underscore the point, she screens a cautionary tale video featuring a character who, thanks to credit-card borrowing, “lives like a professional while in college,” and then lives like a cash-strapped student after college, while pursuing a career.

“We want them to understand you may not be able to buy that car or that house … if you start messing up on your credit now,” she said.

Miyashiro agrees with the National Report Card’s assertion that personal finance competence should be in the lineup of high school graduation requirements.

While her UH peer educators and others can provide a valuable assist to Hawaii’s public schools, she said, a required course (one semester, at least) dedicated to sizing up money-centered life skills could go a long way to sparing students post-graduation trial-and-error troubles.

“They need to go through this in a safe environment,” Miyashiro said. In a high school simulation exercise, teens “can make mistakes and recover … so that when real-life happens, they’re already ahead of the game.”