The editors of Forbes have asked me to contribute to a blog on their website and, while I am willing, I admit to being a tad intimidated. Forbes is a big name and I’m just one generation removed from the other-side-of-the-tracks. Yet, I digress and, besides, you know this. Rather, I’d like to talk about some good news – the National Personal Finance Challenge.
On 20 May, I traveled to Kansas City for the first National Personal Finance Challenge, where teams of four students; from the participating states of Oklahoma, Maryland, Kentucky, Missouri, Kansas, Illinois, Delaware, Nebraska, Tennessee, Minnesota, Arkansas, and Mississippi; competed for the national championship. Each team had come up through state-regional and statewide competitions to be able to represent their state in the event. The competition was the creation of the Missouri Council on Economic Education, and it was held at the Kansas City Federal Reserve Bank, providing space, food, and refreshments; while travel and accommodations for the students were paid by Wells Fargo Advisors. It was a joy to spend the day with these young people. (A recap appeared in the Kansas City Star.)
The contest is simple. (Yet, most American could not answer the questions.) The students take individual multiple–choice exams for two rounds: Round 1: Spending and Credit and Round 2: Saving and Investing. The highest three team-member scores are summed as the team score for each round. For Round 3: Income and Money Management, the team submits answers as a team. Finally, the top two teams (Minnesota and Missouri) engaged in Round Four: Personal Finance Potpourri – Quiz Bowl, to determine the winner; Minnesota – twelve correct to Missouri’s seven. (See below for a sampling of the Quiz Bowl questions.)
Why do I write about this? I write about this, as this is an answer. In my opinion, we have precious few answers. I know the kids on the Missouri team, as they are from my son’s high school. I know their teacher and the love she has for her kids and the passion she employs teaching them the principles of personal finance, as required for graduation in Missouri schools. Moreover, my youngest son was on the second-team from the same high school. The competition really engaged him, like the other students, to learn as much as he could about personal finance. In fact, the leader of the Missouri team is a 2010 Presidential Scholar – with a perfect score on the ACT and SAT – and, while he plans to attend Princeton to study political economy and government, he will be able to manage his money. As a society, we have an obligation to help others do the same and too many of our country’s parents are not up to the task.
While I was watching the competition, the windows of the Fed provided a view to the north toward downtown Kansas City, the World War I Museum, and Union Station. I could not help but reflect on the fact that many of our ancestors moved to, or through, Kansas City with dreams of a new and prosperous life. While I was at the National Personal Finance Challenge, I spoke with many of the kids. They were the children of these ancestors, “salt of the earth” kids living one of their lives’ successes with dreams of a new and prosperous life. We need to remember, however, that adults devised the competition that gave them the chance to compete, to learn more about personal finance, and to celebrate their success with a trip to Kansas City. Adults and corporations stepped up to help them realize their dreams. Adults also set the example at home that made learning personal finance a natural act that can lead to financial success. Yet, adults can and must do more. Next time it is my turn to write, we’ll talk about an example; the Top Ten Teen Financial Tips; a program our MIZZOU undergraduates will present to fifty Missouri High Schools over the next school year.
So, what are your suggestions for the Top Ten Teen Financial Tips? Send us your ideas or add them to our blog at http://mufinancialtip.blogspot.com .
Sample Quiz Bowl Questions with Answers
1. Name one type of trade restriction that causes prices to consumer to increase on foreign imports. Tariff or Quota
2. According to the IRS, what is the maximum amount you are allowed to give up to any number of people, every year, without facing any gift taxes, and without the recipient owing any income tax on the gifts? $13,000 (in 2009 and 2010)
3. A written authorization from a stockholder that empowers someone to vote on the stockholder's behalf. A proxy
4. A 529 Savings Plan is designed to fund what specific expense? College education expenses