Should schools teach kids personal finance?

SUMMERTIME and the living is easy, except I can’t stop my mind from jumping to next month when the college bills begin rolling in again.

With two sons heading back to university, my wife wanted to teach them fiscal responsibility. “I’m thinking of transferring $5,000 each (from their college savings accounts) into their checking accounts so they can pay their housing bills when they come due and buy books,” she said.

I laughed nervously. “You think they will be responsible and not blow it on other stuff?”
“Yes, they’ve been real good and they’re smart.”

No offense, but isn’t the 18-29-year- old generation fiscally challenged? They are the ones who don’t know the difference between compound interest and compound adjectives.

“You’re right,” I answered, after regaining my breath. “It would teach them how to handle their own finances.” It’s time for them to punch in the numbers on the electronic transfers and see the costs get deducted from their bank accounts. Plus, they would have to justify asking for more money.

Sensing my blood pressure was up, I put finances out of my mind and picked up the latest copy of Newsweek. I was transfixed by the article “School Credit” that discusses financial literacy in young people. In the bill President Obama says will bring back integrity to Wall Street (yeah, right!) there is a section warning the elderly and those with language barriers to watch out for dangerous mortgages. Newsweek’s Angela Wu adds: What about young people? Of those unemployed between the ages of 18 and 29, more than 25 percent are late on mortgage payments. Another study found this age group has “soaring credit-card debt” and bankruptcy rates.

Some conclude the Millenials never learned practical financial lessons. They were too busy solving complicated equations in calculus to be bothered with personal finance. Since 2007, the year the big recession hit, the number of states requiring high- schoolers take a financial literacy course to graduate doubled to 13, Newsweek reported. The Missouri education code includes the language: (each student must complete a) “new requirement for a half-unit course (one semester) in Personal Finance …”

California doesn’t require any such course. At best, the state education code suggests the topic be covered in economics or other classes.

Heidi Gallegos, board member with Rowland Unified, said she’d like to see such an elective for 11th graders. “Think about how that could change this state,” she said.
Parents who hope their children will buy a home someday should be worried. Most don’t understand the difference between interest rates and APR, points and fees. But before tackling mortgages, they should know how to handle credit. For example, do you roll over a balance or pay it off? Do they know that paying only the minimum payment often means they’ll never reach zero balance?

Either young people don’t know about finances or don’t want to know. And judging by the number of subprime meltdowns, few cared to know what they were signing, either.
I knew a young person who was finishing her college education debt- free. But she wanted to reward herself, so she bought a new car using her credit card. That quickly led to other credit purchases. When it came time to get married and her fiance learned of her debt ratio, he was gone faster than you could say “don’t leave home without it.” Her essay detailing her financial troubles and heartbreak should be required reading for every young person.

Kids should learn about personal finance. Fifty-one percent of those parents surveyed in June by Merrill Lynch said the most important life-lesson they want to pass on to their kids is “financial know-how,” second only to keeping family ties.

Joanne Steinmeier, veteran Arcadia Unified School District board member, raised her son to be responsible with credit. She says those lessons were first learned by her from her father. “I remember him bringing me to the savings and loan with my piggy bank full of coins … that was my first deposit into my savings account.”

She implores parents to teach their kids checkbook balancing and responsible purchasing: “Yes, kids have to understand this. But if it is taught at home, it is so much more valuable.”

Steve Scauzillo is opinion page editor.

Desalination or conservation?

When you talk water with folks it boils down to a choice between Thomas Edison and Al Gore. You want whiz-bang machinery or do-gooder conservation?

I’m speaking of ocean desalination plants – the big machine solution to dwindling water supplies. But these can be seen as anti-conservation with slogans like: “If you build it, you can let the faucet run while shaving.”

That attitude reminds me of my brother-in-law who like myself is taking a “statin” to lower bad cholesterol levels in his blood. In so many words, he said it was a license to eat bacon cheeseburgers.

But with desalination and cholesterol-reducing drugs, there is always payback. People on Lipitor can still get fat from eating fatty foods. Counties building desal plants will pass the costs along as higher water rates.

What’s a semi-arid region like Southern California to do?

If you absorb serious news (newspapers, news magazines, NPR) you may have noticed a plethora of stories about new desalination plants. On Sunday, the New York Times reported that Australia’s five largest cities will spend $13.2 billion on plants that suck in sea water and spit out fresh water. Of course, it takes a tremendous amount of energy to squeeze the salt out of water. In Australia, that energy comes from non-environmentally friendly fuels like coal.

On NPR this week, I learned how London is low on water so it has built itself a desalination plant. Apparently the Thames has salty water. In fact, Spain has built several desal plants, including some used by agriculture.
The next logical question is, why isn’t the U.S. looking to the ocean to augment its water supply?

I put that one to the best water expert I know, Adan Ortega, the director of Water Conservation Partners, Inc. out of Santa Ana. Ortega has worked on water issues his whole life with agencies such as the Metropolitan Water District, the largest water wholesaler in the world.

He told the CEO of a Spanish desal company their model would not fly in the U.S. because U.S. ratepayers are not accustomed to paying European prices, not for water and also not for gasoline.

Water is still cheap in this country. Attempts to raise rates are met with hostility, as happened in Sierra Madre this week.

Metropolitan is contemplating whether to heavily subsidize a massive desal plant planned for Carlsbad, near San Diego, whose price tag has gone from $270 million to $530 million. I don’t want my water dollars paying for a private company to make money on water.

Ortega says desalination is not cost-effective, not when there are so many cheaper alternatives. One of those we should pursue is water recycling. Sewage water is already treated partially before being sent down the San Gabriel River. It makes sense to finish the job and use it for

groundwater recharge as well as median and parks landscaping.

As to desalination, Ortega says: “What good does it do us to pour more water into the system when we are wasting half our water?”

A state water report says we could save 3 million acre-feet of water a year by simply watering our lawns less. And not so they go brown, just not watering the sidewalks and driveways.

I’ve noticed that more people in my town of Temple City are taking out front lawns and replacing them with decomposed granite, pebbles, garlic plants and other drought-tolerant species. The concept, known as xeriscape (see for a list of plants) is suddenly becoming sexy.

Ortega, who himself replaced his front lawn with low-water use plants, said the idea is “romantic” and has made the covers of stylish home and garden magazines.

The trick is aligning with Southern California seasons: planting in the fall and seeing vegetative flourishes in the winter and spring. We have to shed our East Coast bias.

Xeriscape done right is prettier and much cheaper than giant machines sucking water out of the Pacific Ocean.

Being seen as the dumb American

THE coast of Mazatlan was beautiful. The jagged rock formations were impressive. But after 90 minutes of bobbing on the Pacific Ocean in a small skiff, listening to the Mexican tour guide’s corny jokes (“Doesn’t that rock look like Scooby-Doo?”), I turned to him and asked: “When do we get to the beach?”

He was flummoxed. “I try my best,” he murmured under his breath.

Later, as the morning approached afternoon, we reached shore, which turned out to be a stone’s throw from the dock. I huddled with some fellow tourists who also wondered why we didn’t just go from Point A to Point B. Why the Disneyland Jungle Cruise ride? “Does everyone think Americans need to be entertained?” I asked no one in particular.

Oh my God. The answer is “yes.” Americans are seen as dumbed down.

It starts with our news. Especially broadcast news, which is a bubbly concoction of car chases, celebrity whereabouts and crime – infotainment. “Did you hear the news? Paris Hilton was arrested at the World Cup,” said my brother on the way home from the port. On Tuesday, I couldn’t escape the nonsense about Hollywood party girl Lindsay Lohan being jailed for (theoretically) 90 days. We are like spoiled children in need of a permanent distraction. At least, that’s how we’re perceived.

On board the cruise ship, the Disneyfication continued with parades of costumed pirates and jousting knights in green and red felt jumpsuits. And this was an international cruise
line and not one of those party ships.

I felt embarrassed to think I’m seen as less than serious.

When I got back from vacation, I called Jim Willis, the now departing chairman of Communication Studies at Azusa Pacific University, where I’ve taught some media classes, for his thoughts.

He had the same experience when he was chair of the journalism department at the University of Memphis and was hosting German TV journalists. They told him most of what passed as “news” in our country would not fly in theirs. They took their news straight, without tongues in cheek.

I’ve heard the stereotypes of Americans overseas as pigs – demanding, insolent, pampered. But dumb? Too dumb to hear about nature without comparing each rock to the cast of Cartoon Network?

American media is a mix of news and entertainment – Hollywood meets Eyewitless News – and its all the same to the average foreigner. In Southern California, the emphasis on infotainment is heavier than elsewhere in the U.S.

“This idea we have as news as entertainment is not universal around the world,” said Willis.

Willis is leaving to head up the journalism department at Ball State University in Muncie, Ind. He’s worked in Oklahoma and Ohio as a print journalist. Recently, he took to blogging and his first assignment was the 20th anniversary of the collapse of the Berlin Wall.

Will the Internet save journalism?.

Willis says blogging is more of a sideline to news reporting and leans toward commentary and opinion. We have some dedicated bloggers in Pasadena and Altadena who are producing more serious stuff than TV news, so perhaps there’s hope.

He says the cable networks are moving toward advocacy journalism. This kind of emotional “yelling” as opposed to reporting is crowding out hard news and investigative journalism just as entertainment news did in the `80s and `90s.

“We (as American consumers of news) are interested in what people think about what is going on as much as what is going on,” Willis said.

Advocacy journalism and infotainment tell us what to think. That picture of Americans needing a crutch has permeated across the globe.

In Mexico, I enjoyed the sight of a pod of dolphins. I watched the pelicans rule the rocks and the sea lions dive beneath our glass-bottom boat. Those sights came without a laugh track. And they left the biggest impression.