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Madoff and the need to boost financial literacy: Visa enhances classroom resource

National Post: Wealthy Boomer

February 6, 2009, by Jonathan Chevreau

Original Article

If the Madoff Ponzi scheme taught us anything -- see the massive coverage today on the front pages of any North American newspaper -- it's that when it comes to financial literacy, even the supposedly "elect" can sometimes be fooled. Perhaps especially the elect. You know the old saying; the easiest person to sell is a fellow salesperson. See also Ponzi North or here for some of the handful of Canadians who have been touched by Madoff [several deny it, despite the list of 13,000 affected worldwide, published this week.]

So it's good to see that Visa Inc. today announced it is launching a revised version of its classroom financial literacy resource, Choices & Decisions: Taking Charge of Your Financial Life. This was originally published in 1996 and clearly a lot has changed in the more than dozen years that have passed since then.

The goal is to help educators across the country teach students and young adults to set financial goals, develop budgets, and learn about credit and the basics of the banking system. The 15 lessons contain goals, lesson objectives, timelines, teacher notes, teaching instructions and evaluation suggestions. There are also supplemental activities, overheads, quizzes and student activity worksheets.

Given that the Madoff debacle is unlikely to be the only scam coming to light in the bear market, it's timely that one of Visa's enhancements is new information to help students protect themselves from financial fraud. This was developed by a panel of educators to meet curriculum requirements for high schools across the country. Teachers can order hard copies of the resource or download copies of Choices & Decisions here.

Available in both English and French, Visa has already received more than 700 requests from teachers for the updated resource, Visa says.

Half a million Canadian students have already been exposed to the original material. See also here and here for previous columns and blog entries I've written about the urgent need to improve financial literacy. Because, as Bernie Madoff has so painfully reminded us, failure to be financially literate can impact one's entire life.

One B.C. teacher's impressions of Choices & Decisions
After the initial version of this was posted, I chatted with teacher Martin Runge, president of the British Columbia Business Educators Association, and one of reviewers for Choices & Decisions. My first question was about Visa's motivation, given that its primary business is credit cards. I noted that the credit binge and egregrious levels of leverage was largely responsible for the horrendous economy we're all suffering from. First, Runge reassured me that the students who use this material are NOT given credit cards themselves. "They never say use a credit card to buy something. Never, ever. They talk about debt and the use of credit but there isn't much about credit cards." There's material on budgeting but "no promo in there. They suggest paying off credit cards each month, about the cost of debt and how compound interest works. Personally, I don't mind if they do use credit cards. I just want them to use them responsibly."

What grades is the material used in? Grades 10 to 12. The material is modular and can be used on a standalone basis to support existng courses, such as Math Essentials or Business. In B.C., there is a Planning 10 course which covers health, education, careers and has a financial component that fits well with Choices & Decisions. It's also used as an adjunct to business education and accounting courses.

Runge verified that there is no cost to teachers to access the material. Much of it is downloadable. He also noted that Van City and the B.C. Securities Commission also provide material on financial literacy. The new version of the Visa material does have a new module on fraud but the B.C.S.C. has more on that, Runge said.

We talked about the Madoff scandal. "What we're seeing now because of what' s happening globally is a monster influx of material on financial literacy."

Asked about the kids' reactions to the material, Runge said "some love it. It depends on the age group and which class I'm teaching. Planning 10 is mandatory so some kids eat up the financial thing. Others don't get involved. It's the whole spectrum from no interest to give more on buying a house."

Fool Watch, The Sequel
In January, we noted the growing disconnect between essays posted on the popular Motley Fool web site and the increasingly discerning comments from average readers. This week an article praising the bailouts drew more than 150 comments and this insightful rebuttal of just about everything in the article. Via the rebuttal you can click to the original piece.