CINCINNATI – The fight to raise a generation of money-wise children begins with $20 magnets clips, $5 tissue-paper flowers and $30 sparkle sticks – three-inch vials filled with colored water and sequins.
Those handmade items were some of the hot commodities being bought and sold with "school bucks" during a frenetic two-hour open market in a sprawling University of Cincinnati gym. About 700 third through fifth graders alternated roles as buyers, sellers and advertisers to learn some basics about supply and demand, marketing and, above all, the value of cash.
The fun is part of a serious effort to reverse the Tri-State's disturbing lack of financial smarts – having the knowledge to make good decisions from saying no to a pair of expensive basketball shoes to a ruinous mortgage unlike so many who lost their homes after the 2008 housing crash. That year, housing prices plunged, leaving many homebuyers owing more than their homes were worth, often with sky-high interest rates after introductory low rates expired.
Ohio, Kentucky and Indiana rank near the bottom of the United States in financial literacy, according to a 2013 study conducted by FINRA Investor Education Foundation , a not-for-profit organization authorized by Congress to protect America’s investors:
- Ohioans were the 4th worst in the nation in financial literacy and paying only the minimum payment on credit card bills.
- Kentuckians ranked third worst at having unpaid medical bills and tied for 4th worst at having rainy day savings.
- Hoosiers ranked second worst at rainy day savings.
"Consumers are called upon more to make their own way in an increasingly difficult environment," said Julie Heath, Economics Center director and a UC economics professor. "Day in and day out, people aren't saving enough for retirement, students are taking out way more loan debt than they should."
Thursday's Market Madness, organized by UC's Economics Center, was the culmination of the center's year-long Student Enterprise Program at 12 Cincinnati Public and 15 other Tri-State schools. Students earned fake money through good attendance, grades, behavior and other positive actions. Four times during the school year, the Economic Center brought a cart of goods to sell to the students, ranging from inexpensive stickers and pencils all the way to MP3 players and basketballs.
Some students learned the value of saying no to cheap items early to save for better stuff. Plus, they earned 10 percent interest on their savings.
It's all part of a much grander ambition of teaching tomorrow's consumers how to be financially savvy and to avoid the pitfalls like purchasing mortgages they can't afford or failing to save enough for retirement.
"Our mission is to make good decision makers out of students so that we don't have another 2008," said Margaret Valentine, chair of the Economics Center.
The program encourages students to look out for others, too, with an alternative to spend earned money on a real charity. Program partners convert donated school bucks into real dollars for charities of the children's choosing. "It's amazing," Valentine said. "In the poorest schools, they give the most."
Ohio requires school districts to offer high school students six weeks of financial training integrated into other subject matter. "Implementation is a local decision. We only collect that the student has met the requirement for graduation, not how or when during the student high school career," said John Charlton, an Ohio Department of Education spokesman.
That's not nearly enough, according to Heath. "It's laughable. It's the state not doing its duty by its students and by the broader population. These kids are going to grow up being ill-informed consumers."
Heath wants financial literacy integrated into subjects throughout the curriculum starting as early as preschool. "You can teach a 3-year-old that if you pick this one, you can't pick that one. And then you move ahead appropriately, introducing the coins, etc.," she said.
She added, "That's like asking when should you start teaching reading or math or science. You lay the foundation as early as you can."
Charlton said there is movement toward adding more financial training.
"We are aware of several groups that have been working with legislators to change the high school graduation requirement to include a course in financial literacy that is taught by a teacher certified to teach financial literacy," he said. "Many of these same groups have or are in the process of developing curriculum that could be used for these courses. Additionally, the Ohio Department of Education is in the process of developing model curriculum to support the standards."
The Economics Center is going to keep up its efforts regardless of what happens on the state level. Its Stock Market Game is played by fourth through eighth graders at schools throughout Greater Cincinnati, in which students invest $100,000 in fake money in real stocks during a 10-week statewide competition.
Students from Indian Hill and Cincinnati Country Day won the state competition and are traveling to New York where they will present their investment strategy to analysts at Legg Mason, Goldman Sachs and Lazard.
Back on the UC market, goods were trading hands fast and furious.
Marley Cunningham and Cesar Camacho, both fourth graders at Amity Elementary in Deer Park, were shilling their "sparkle sticks" for $30, using posters to lure customers back to their partners' selling table.
Jahkiren Oliver, a fourth grader at Pleasant Ridge Montessori, advertised for magnet clips – wooden clothes pins with a magnet glued on and colorful decorations like buttons or pipe cleaners. He had his eye on buying a stress ball and a minion – popsicle sticks painted to look like minions from the "Despicable Me" movie franchise.
"We're about sold out," said Jessica Vidourek, an Amity Fourth grader who was hocking the minions with a banner as long as she was tall, festooned with phrases like:
"Keep Calm and Love Minions… only $50 each!"