Financial Literacy: Does it Belong in Ontario's Curriculum?

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Posted by J. Douglas Hoyes, CA, CPA, LIT, CIRP, CBV

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Does financial literacy belong in high schools? This question is surfacing more and more as Canadians dig themselves further into debt. Today's guest is Prakash Amarasooriya, a member of the Toronto Youth Cabinet who recently launched a petition urging the Ontario Ministry of Education to beef up their Grade 10 career studies course to include basic financial skills like budgeting. Within less than a month the petition was signed by nearly 900 supporters.

Is there a need for financial literacy?

Prakash thinks so.

Every day I would notice people coming into the bank and living in this kind of what I call a cycle of poverty. They would be living in their overdraft credit card advances and just paying off interest every month and just the bare minimum payments.

study by the Investor Education Fund states that 9/10 high school students have at least one financial product. This begs the question, with so many young students using more financial products, how can we expect this younger generation to succeed financially when we don't provide them with the tools to do so?

From 2009 to 2016 the number of students who believe financial literacy should be taught in the classroom increased from 57% to 69%.

There's a study done by the Investor Education Fund where one in four don’t feel that their schools are doing an adequate job in teaching financial literacy and one in four feel they don’t make great spending decisions.

If Ontario high school students feel unprepared to manage their money after graduation, we're not aiding their transition into adulthood. Once they break out into the real world their financial education primarily comes from people who are looking to make a profit on the consumer's investment.

What can be done?

The petition from the Toronto Youth Cabinet proposed changes to the Grade 10 careers course. The remodeled course would include:

  1. Budgeting, how to create one, as well as how to follow it.
  2. Mortgages, down payments, amortization periods. Even something as simple as explaining their definitions and purposes.
  3. The ins and outs of leasing, financing or buying a car.

Reforming the careers course was the optimal choice for the Toronto Youth Cabinet's proposal because it seemed like the path of least resistance. In order to start adding financial literacy into Ontario's curriculum it's a lot easier to add pieces into an existing course - one that was already being looked at by the Ministry of Education - as opposed to adding a full course on its own.

For more of our discussion with Prakash Amarasooriya and details of the proposal, listen to our podcast or read the full transcript below.

Resources Mentioned in the Show:

FULL TRANSCRIPT show 116 with Prakash Amarasooriya

financial-literacy-ontario-curriculum-transcript-image

Doug Hoyes: November is financial literacy month and every year at this time you hear lots of news reports about the low state of financial literacy for all age groups, you and old. Every year someone suggests that financial literacy needs to be taught early, in high schools so that we can learn good money management habits when we're young. In fact we talked about this exact topic last year on show number 62 with Dave Mitchell, a retired high school math teacher, who believes you can plant the seed of lifelong confidence if you teach students some basic math calculations in high school. Learning the power of compounding is an important skill.

But is high school the place to teach this? Is financial literacy a math issue or should it part of other courses? Or is high school too early to be teaching students about money? My guest today has some very definitive opinions on these and other questions, so let's get started. Who are you and what do you do?

Prakash Amarasooriya: Hi there, so my name's Prakash Amarasooriya, I'm the School Board lead for the Toronto Youth Cabinet.

Doug Hoyes: The Toronto Youth Cabinet, so tell me about that, what is that?

Prakash Amarasooriya: Sure, so Toronto Youth Cabinet is an official part of City Hall. They were constructed quite a few years ago in order to make sure the youth's voice was represented in the city and so, as a School Board's lead my job is to bring educational initiatives from the school Boards and connect it with City Hall.

Doug Hoyes: And how much do you get paid to be on this Toronto Youth Cabinet?

Prakash Amarasooriya: So, we do it purely on a voluntarily basis.

Doug Hoyes: Wow, okay. So, you're not selling any books or trying to promote anything other than what you think is actually right. So, you are as unbiased as anybody can be on this. So, tell me a bit about your background then?

Prakash Amarasooriya: Sure. So, I personally work for a bank. But prior to that I, in high school, my first experience with money was when my parents first lost their jobs simultaneously in the 2008 financial crisis. When that happened I think it was my first wakeup call that money's not guaranteed and that it's something I need to be conscious about and need to be prepared for the future.

When that happened I started, I obtained five part-time jobs in order to sustain myself. Once I started self teaching myself about financial literacy I noticed a lot of my peers don’t really have that knowledge. And so I started learning on my own but I started having conversations with people and I noticed that this is starting to become a drastic need.

Once I graduated from university I went into business and I went into banking specifically. And every day I would notice people coming into the bank and living this kind of what I call a cycle of poverty. They would be living in their overdraft credit card advances and just paying off interest every month and just the bare minimum payments. And so I noticed that this is something that if parents do they pass on to their children as well. And it continues. And education if done right can be a way to break the cycle.

Doug Hoyes: So are you of the view that then we are not very financial literate in general?

Prakash Amarasooriya: Not at all, I think there's been statistics done that Ontario is pretty bad when it comes to personal finance and debt. There's a study done by the Investor Education Fund where one in four don’t feel that their schools are doing an adequate job in teaching financial literacy and one in four feel they don’t make great spending decisions. And only one out of four people think that they're well prepared to manage their money even after graduating high school.

Doug Hoyes: So, even high school students realize that they aren’t very good at this.

Prakash Amarasooriya: Agreed, yeah.

Doug Hoyes: And is that an education thing then, is that what the root of the problem is? You've already said that well, parents pass this down to their children. So, I guess in a perfect world parents would teach all their kids everything they need to know about it. But in your own personal experience your parents who are, obviously smart people and hardworking, but they didn’t have the skills to teach you. That's why you believe the schools have to step in.

Prakash Amarasooriya: I think there's a lot of factors in this. I think parents don’t know everything and so for those families that are unfortunately not knowledgeable in this topic they unfortunately don’t pass on that knowledge to their children.

Doug Hoyes: I told my kids I did know everything.

Prakash Amarasooriya: Okay, I apologize.

Doug Hoyes: Just to be on - but everybody else, I understand what you're saying, yeah okay.

Prakash Amarasooriya: And there's also I think other aspects too. We I think are a product of a society as well and when sometimes other contributions are like consumerism. I think a lot of youth buy things without thinking about saving that money, which is an investment in themselves and they buy things they don’t really need at that moment like shoes and other necessities, sorry, things that they think are necessities but aren’t really. And so, part of the curriculum that we want to address is things like behavioural change and understanding what your needs are versus what your wants are.

Doug Hoyes: So, what is currently taught in high schools today, let's start with that and then we can talk about what you think should be taught. So, what is on the curriculum that today that relates in any way to financial literacy?

Prakash Amarasooriya: So, when we did our curriculum review we noticed that there's only four courses in the Ontario curriculum that address financial literacy. Two of those courses are not mandatory and the other two courses only go as far as talking about simple and compound interest as well as I believe annuities. And that's the only two topics that we found in the curriculum.

Doug Hoyes: So, these are math courses. So, now let's talk about what you think, or what the Toronto Youth Cabinet has proposed. You did not propose a sweeping change to the math curriculum, you proposed something different.

Prakash Amarasooriya: So, we proposed putting into the Grade 10 careers course. And the reason why we put that I think mandate I think for the proposal is because there's three reasons for this. One, you can't have a successful career if you're not able to manage your money. Now there are rare instances where that's possible but in general if you're able to sustain a financial [lifestyle]. In general if you're able to have a successful career, it's because you're able to manage your personal finances.

Second when it comes to the careers course itself it's been deemed relatively ineffective by many students and I think in economic terms it's a high opportunity cost and there's a lot of people who think they can be doing better things with their time and we agree. And third is a mandatory course, meaning that everyone would have a chance to learn this topic regardless of whatever their future aspirations are as well regardless of their socioeconomic status and background.

Doug Hoyes: And I mean I've got two sons, one of whom is Grade 11 so he's very familiar with the careers course and another one who's in first year of university, so, again not too far in the distant past. And I think what you said is exactly correct, I recall both of them telling me, well I don’t know if that was the most productive use of my time and those were not the exact words they said but that was my interpretation.

So, you're saying we've got this slot in the calendar anyways, and it's a slot that is not being fully utilized. The general opinion amongst the students is we're not getting a huge amount out of it. So, why not use some of the time for financial literacy education? So, what would you put in then to that course that is not now there?

Prakash Amarasooriya: So, I think a lot of people when they heard about the careers course had high expectations for it. We don’t want to take the grade aspects that are currently in it. They do talk about I think resume building as well as future job aspirations in the future.

Doug Hoyes: So, those are good things.

Prakash Amarasooriya: Those are good things.

Doug Hoyes: You're not opposed to that. So, you're not saying take the careers course, cancel it and replace it with a financial literacy course.

Prakash Amarasooriya: No.

Doug Hoyes: You're saying take what's there and build on that. So, okay figuring out what kind of jobs are out there, what the prerequisites for them are, how to do resumes, that sort of thing. And then once you start working and have money, okay how do you handle it as kind of a logical progression.

Prakash Amarasooriya: Exactly. I think ideally I would like it be a full course on its own but we chose this route because it's the path of least resistance. We know it's very difficult to actually add a course let alone even reform one. And so we wanted to find a way that wasn’t too difficult, it would be a win/win situation so we could hopefully make small gains and hopefully once people recognize there is financial literacy in the curriculum. And people have been okay, this is great, we want more of it, we can hopefully move forward from there.

Doug Hoyes: Now is it true that the careers course is a half course?

Prakash Amarasooriya: Yes, it's a half semester course.

Doug Hoyes: Half a semester so half a year and the other half would be a civics course, is that -

Prakash Amarasooriya: Yes.

Doug Hoyes: So, you're taking half a year, which already has some stuff in it, you would either speed or delete some of the stuff that's there. What would you actually add then to the course?

Prakash Amarasooriya: So, topics we would like to add is budgeting. I think a lot of people know what a budget is but many don’t use it. And this can help, especially youth. Once they've built these good habits early on I think they can I think understand the value of what it is.

Other topics in talking about preparing for the future are how to buy a house and what that includes. So, things like mortgages, down payments, amortization periods. Even the definitions of these terms I think would be useful to youth. How to buy a car, what does that entail? What is leasing, how is that different from financing and buying? And so, once you start thinking about this early on, we think that this can prepare people to start looking at the bigger picture and not just making day by day spending decisions.

Doug Hoyes: Well, this show is called Debt Free in 30 and obviously that's the topic near and dear to my heart. What debt related topics would you have in this? Obviously you've talked about mortgages, you've talked about car financings and things like that, would you address things like credit cards for example?

Prakash Amarasooriya: For sure. The reason why we proposed putting this into Grade 10 is because you're two years away from actually being legible for a credit card. You're also now old enough to create your own chequing account and you're also going to be starting to look into student loans in the future. If you start doing this around Grade 10, this is the age where you can start saving. A lot of people start, a lot of youth nowadays actually have part-time jobs and so this might be the perfect time to address them early on and build proper saving habits so they can start kind of preparing for the future a lot earlier and with more time.

Doug Hoyes: Yeah and it's an interesting because so Grade 10 is that the right time or is that the wrong time? And you've given the reasons why you think it's the right time. I mean I guess the counter argument to would be well, there's no kid in Grade 10 who's going to be buying a house any time soon. And there's no kid in Grade 10 who's going to be financing a car any time soon. I mean sure by the time you're in Grade 10, Grade 11, I guess you're 16, 17 years old, you can go out and buy some old car or something. But the chances of you being able to finance a brand new car are virtually zero.

So, are we teaching them a bunch of things that will fantastic knowledge 10 years ago when they're in a position to use them, are we teaching things too early that they will have then forgotten?

Prakash Amarasooriya: So, I'll be honest and say there are going to be students who go through that course and say you know what? It's not relevant to me now so I'm not going to pay attention to it so I'll think about it when it comes time to. But there's two things I want to say to that, one is if you build a culture around people who look at this course and say you know what? This is important, you're going to need to learn it and people get excited for this course. Then youth when they enter this course will be you know what? It might be nothing to me now but I know it's going to be important in the future so let me start paying attention.

And I think two is because a lot of people I think complain regarding, they don’t learn useful topics in schools. This is a way to give them, okay you know what? You've complained about this, it's not being done, here you go. If you take advantage of this, it's up to you, but if not that's your opportunity to lose. But we can't say that unless we actually give them the opportunity to have that choice.

Doug Hoyes: So, it's hard for me to think about when I was in Grade 10 'cause that was a few decades ago. But what would make me excited to learn some of this stuff?

Prakash Amarasooriya: So, I think also thinking about the changing world we live in. We want to make sure that we're engaging them in ways that relate to them. So, that includes involving technology. In our research we've been looking into different types of financial literacy ventures and there are a few that are app based as well as computer based. And they involve activities that can hopefully put students outside their comfort zone and make them think in the long-term picture of things.

We also want to make sure that teachers are adequately prepared for this. This means ensuring sure that they are confidently and competently ready to teach this course. We know a lot of teachers admitted that they maybe would like to teach this topic but they don’t feel adequately prepared to do so. Other financial literacy partners have actually come up with lesson plans for teachers and parent guides that can kind of address that kind of I think lack of knowledge. And so this is something hopefully that the ministry does take on but there is great work already being done and there are resources online for people who are interested in that topic.

Doug Hoyes: We're recording this in the middle of November, which happens to be financial literacy month. You and your group actually spoke to the Minister of Education. Tell me about what happened on November the 1st, 2016.

Prakash Amarasooriya: Sure, so we, in developing this proposal, we came up with like a strategy on how to get it known. We released a petition in order to get I think public attention on this issue because we believe that if people knew about this that there was no way they would reject supporting this idea. And so, once we released the petition it kind of took off a lot faster than we expected. We got a lot of media attention on it, we got a lot of supporters early on and within two weeks we actually got a response from the ministry actually asking, sorry, inviting us to meet with them.

And on November 1st, we had a meeting with the Ministry of Education, Mitzie Hunter. And we came in and we kind of pitched why we think this is the best route to do it and why it's needed. And to our surprise it was actually - they were very receptive to our idea and they were like we're in. And so, on two days later on the Thursday on November 3rd, they posed a press release saying that they will be implementing financial literacy into the Grade 10 careers course.

Doug Hoyes: We just don’t know what the exact timing of that is at this point.

Prakash Amarasooriya: Agreed, yeah. So, we're - it's relatively new and so we are I think in the waiting stages of what that actually means. They usually curriculum takes three to four years in its course but we heard from the ministry that it will be hopefully expediting the process because they are already currently looking at the careers course.

Doug Hoyes: So, it was under review anyways. This is something that can then be added into it. Now I know nothing about education but that doesn’t stop me from having an opinion on it. And I think you will find that every single human being went to school so we all think we're experts on it. Like I know I'm not a doctor, I've never done an operation so I wouldn’t pretend to understand that. But school yes, we all have school stories.

So, given that I have zero actual knowledge or background in this let me tell you what I think. I think that what you think make sense but would it not - and I understand what you're saying, this is our first step, we'd love to reform the whole world but let's start with a manageable bite size piece. You know, it's like if you want to eat an elephant, how do you do it? Well, one bit at a time. And that's really what you're saying, right?

Prakash Amarasooriya: Right.

Doug Hoyes: So, the careers course was going to be reviewed anyways, there's some room to make some changes. I would think that as a next step after that, it would make sense to look at the whole picture. So, certainly some of financial literacy is math and as you identified there are a couple of courses already that touch on this, perhaps not specifically. And understanding basics like compounding interest and what that means and how a mortgage amortization schedule works and so on is important. That's probably best done in a math course as opposed to in a careers type course.

But there are other elements to financial literacy as well. You used the word consumerism, I guess other ways to express that would be peer pressure, societal pressure. The reason that I do a lot of the things that I do is because the people around me are doing them, encouraging me to do those sort of things. So, you gave the example of someone who goes out and buys a pair of shoes that perhaps they didn’t need. Why did they do that? Well, I suppose it's because some of their friends were doing the same thing. So, are there other courses that could be touched by this, math for example? I don’t know in high school if there are courses that deal with marketing and social studies and that kind of thing if there are elements to that. You know, are there other courses where this could potentially be relevant as well?

Prakash Amarasooriya: That's a good question. Like you mentioned, financial literacy is something that affects everybody. And it's kind of difficult I think to put it into other courses because as the ministry has already stated they put it from Grades 4-12  and they said it's being dispersed throughout the curriculum.

My argument to that is because when you disperse something around the curriculum people don’t actively think about that topic. So, we mentioned things like consumerism, if they're taught about it kind of vaguely throughout their educational experience, they may not get the time to think about okay how does this actually affect me?

If you put it into a dedicated course that directly confronts this topic, you get an opportunity for them to ask questions to a teacher and being you know what, you've been trained in this aspect, tell me why I shouldn’t be thinking this way. Tell me why I shouldn’t buy those shoes now or maybe why I shouldn’t buy the fancy car and that shouldn’t be goal. And if you create a dedicated space for that I think it speaks stronger than if you were just to disperse it across multiple curriculum, multiple courses.

Doug Hoyes: Because someone can be a champion of it I guess too. If I'm a math teacher and this is 45 minutes and one lesson that we're going to hit on this, okay fine here's how the math works and that's it. We're not going to put it into the bigger picture. So, is there enough stuff you can take out the careers course to put in the stuff that you want to put in?

Prakash Amarasooriya: Yeah and I think that's the other thing. A lot of people mentioned that in their careers course, a lot time is being wasted with personality tests, which they feel are just time fillers. And a lot of them watch movies. I know from my personal experience we just watched movies half the time. And so, I don’t think it's a valid criticism to say that there is not enough time to be done.

If there was more construction and more stability within creating a proper course because like you mentioned it's only a half year course. And so having - if you did a class by class basis and of course allowing for leniencies between missed classes and stuff like that, you can come up with a comprehensive curriculum that addresses the key components of careers as well as what needs to be taught in financial literacy, at least in the beginning stages.

Doug Hoyes: So you think it is possible then to actually do it. Do you worry that, not just students, but everybody from the ages of zero to 100, are bombarded with all these conflicting messages. That hey, you've got to buy this, you've got to have that, the whole consumerism thing. Is that even a bigger influence in our lack of financial literacy than the fact that maybe we're not so good at the math. Is that really the biggest problem we've got?

Prakash Amarasooriya: I think you're right. I think there's a lot of outside pressures, especially in our ever changing world, especially with social media. I think a lot of youth when they go online they see, people always post their positive experiences and they post that they're travelling, they’re posting that they're buying these new things and they're showing them off on their social media. Youth might just think that that's what the whole point is and maybe not think of the long-term goals of buying those things.

Doug Hoyes: Yeah the whole point of Instagram is to show what I bought or what trip I went on.

Prakash Amarasooriya: Or what food you had.

Doug Hoyes: What concert I'm going to, that sort of thing. So, that's why people are tweeting their lunch all the time. Yeah, that's a good point and again, when I was a kid, when I was 40 we didn’t have any of this stuff. There was so such pressure to be showing people what, you know, I think I'm doing or should be doing and that kind of feeds all into it.

So, will forcing, forcing is the wrong word, but will having people recognize these influences be part of the course that you're proposing? In other words is it going to be here's how the math works or is it going to be more of a step back that here's how the decision making process works, here's all the things that are influencing you. Is that going to be part of the curriculum or can it be?

Prakash Amarasooriya: I think we do want to I think make it as inclusive for everybody as possible. If we take away the math aspects of it, that may be too complicated for some students and may disengage them. But if we ask those questions that they will have already asked themselves and hopefully engage them in a discussion. Like early on I think the first thing they should talk about is what do you consider a need and what do you consider a want?

If you know the difference between those two things can you understand what my actual goals in life are? Are they monetary, are they family oriented, are they goal based? And if you can start asking those questions many students can understanding what financial decisions they want to make and what they value compared to what they need or what other people want to enforce upon them.

Doug Hoyes: And that's a good step. So, it's going to be perhaps a year or two or three before the curriculum's actually changed. Let's say that I am in Grade 9 or 10 or 11 or 12 today or let's say that I've got kids or people I know who are in high school. What advice would you give them, what resources would you point them to, what would you tell them to focus on today, given that perhaps the school system isn’t going to give them what you think they need?

Prakash Amarasooriya: Okay. So, I think two things would be, one in terms of saving, I don’t think it can be stressed enough that students should save money more than they should be spending. I think there's a famous quote by Warren Buffet that you spend after you've saved. Saving you have to consider an investment to yourself, you're paying yourself first. You always pay things like your bills and other expenses first but saving is investing in yourself. And once you have money to save you can do things like investing and such.

And the second thing is that I know that the financial consumer agency of Canada, they have great resources online of all financial literacy partners that do great work already in financial literacy and many of them have resources as well as books and online modules where you can learn about topics that may interest you that may not be involved in a careers course such as stocks, investment. Those are topics that I think are more specialized that may not relate to everyone but I think a lot of people may have an interested in.

Doug Hoyes: Yeah and so that's the FCAC that you're talking about. So, what I'll do is I'll put links to that in the show notes over at hoyes.com and I think you're hitting on a key point and that is ultimately they're responsible for financial literacy is you, it's not my parents, it's not my school. They can certainly provide resources and that's great but ultimately if you want to learn about money, this is 2016 there's this thing called the inter webs that has tons of information out there. And some of it will be just plain wrong, some of it won't apply to you, but isn’t that the whole point of becoming literate is to read the differing points of view, read the different things that are out there and make some decisions for yourself?

And if we can teach students to think, isn’t that really the ultimate battle? And that's what you're saying, critical thinking. So, well and I mean you mentioned budgeting for example, I've got a couple of videos on YouTube where I say you know what? Budgeting for a lot of people don’t make any sense at all, for some people it does. Well, what's the difference, does it apply to you? Well, those are the things that you got to look at for yourself and can decide.

Prakash Amarasooriya: Exactly. I think what you mentioned hits the nail on the head is that there's no one size fits all kind of solution to this. We want to present in education just the variety of options and it's up to each student to say you know what, this is what works for me. I may not be interested in that but having the option and opportunity to do so is I think what our key point is.

Doug Hoyes: Excellent. Well, I think that's a fantastic way to end it. And, you know, stay tuned to the news I guess as time goes on. Because as you said in November 2016 the Toronto Youth Cabinet has met with the Minister for Education for Ontario who appears to be receptive to the idea of making changes to the careers course in Grade 10 to introduce more elements of financial literacy. Great, thanks very much for being here.

Prakash Amarasooriya: Thank you for having me.  

Doug Hoyes: That was my discuss with Prakash Amarasooriya who is the volunteer School Board's lead for the Toronto Youth Cabinet, giving us his thoughts on financial literacy in Ontario high schools. And specifically he believes that the Grade 10 careers course is the place where there is some room to add some financial literacy education. He believes that Grade 10 is the right opportunity. Students are sophisticated enough, starting to have part-time jobs, starting to have some money and therefore that's the time to do it.

So, what's my take on what Prakash had to say? Well, I absolutely agree that more education is better and I agree based on what he's told me that the Grade 10 careers course probably is a place where there is some opportunity to increase financial literacy education.

I do believe that financial literacy should not just be one half year course, one part of one half year course in grade 10. I think incorporating it into the math program and some other courses is also important. But hey, the more education the better, I don’t object to it. What I will say is this, I think the most important skill when it come to financial literacy is critical thinking, being able to think critically.  

As we talked about on the show we are bombarded with advertising, from the social pressures of our friends who are buying this and buying that and to be able to think critically and think through why we are buying something. As Prakash said, want versus needs, that's a very important concept, if we can learn those things then that will improve our financial literacy considerably. And that's not just for youth, that's not just for somebody in Grade 10, that applies to every age group.

That's our show for today. Thanks for listening. Full show notes are available at our website at hoyes.com and I will put links to everything we talked about and some further resources on financial literacy. Thanks for listening, until next week I'm Doug Hoyes. That was Debt Free in 30.

About J. Douglas Hoyes

Doug is our co-founder and is a Licensed Insolvency Trustee, Consumer Proposal Administrator, certified Insolvency Counsellor and Chartered Professional Accountant.

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