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magazine home > archives > winter 2005 > features

As the personal bankruptcy capital of the United States, Memphis has its fair share of financial woes. The University of Memphis ' Center for Economic Education is giving the city's teachers the tools to sharpen their students' knowledge of money matters.

The ABCs of Dollars and Cents
by Jamie Peters

The teacher is armed with a red marker - a tool of the trade that can elicit dread from students across all grade levels. In her other hand is a workbook. Her arms are crossed and one fist fits under her chin as her students' colored pencils make that singular sound when put to paper - the sound of searching for a solution to a problem while under the gaze of a teacher.

  Dr. Julie Heath

Dr. Julie Heath, director of the U of M's Center for Economic Education, was elected to the executive committee of the National Association of Economic Educators last fall.

Rubber-soled shoes squeak on the linoleum floor as bodies shift in desks in an effort to shake loose answers from their thoughts.

The teacher places a transparency on an overhead projector.

"You may not be done with your country, but I just want to make sure everybody's at the same place," she says.

Engaging in the feedback loop of teacher-student interaction, the classroom works its way through a lesson on how geography can shape a country's economic output. The teacher shows the students how to draw color-coded "isolines" that connect areas with equal amounts of rainfall. This is a key component of the ultimate goal of the lesson: pinpointing the regions that can produce the maximum amount of certain products for the lowest costs.

But as the students work through right and wrong answers, some signs betray the characteristics of a traditional classroom. One student sips a beverage from a large cup that reads "Chili's To Go." And the sounds of gum-chewing smack openly throughout the classroom without the threat of detention from the teacher. Zoom out from these close-ups, and a couple of new pieces of evidence materialize.

First, these 20 students are much older than the middle-school students for whom the lesson is intended. And second, their teacher isn't really a middle-school teacher.

She's Dr. Julie Heath, director of the Center for Economic Education and economics department chair and professor at the U of M. Since 2003, Heath has taught teachers how to integrate curriculum-driven economics lessons into their classrooms. Topics range from the costs of producing chocolate products (yes, students get to eat the lesson materials afterward) to a look through a historical lens at how financial incentives led to the Louisiana Purchase. In every tutorial, whether it revolves around math, reading or geography, Heath interacts with the teachers as if they are her students. This method ensures the most effective mode of learning for the teachers, Heath asserts. "When I teach professional development workshops I ask you to become your students, without the objectionable behavior," Heath says with a sly smile to the group of Shelby County middle-school teachers attending the workshop during an October in-service day at Collierville High School.

Mock groans come from some of the workshop teachers as they take on their assigned roles of adolescent students.

The need to know $

The Memphis initiative is a microcosm of the national efforts by the federal government to devote more resources to improving economic education in America. The center at the U of M is one of 270 university-based centers affiliated with the National Council on Economic Education, which has designed the workshop materials. In the summer of 2004 Congress appropriated $1.5 million to bolster education efforts under the Excellence in Economic Education Act, which is part of the No Child Left Behind legislation. The National Council on Economic Education allocated 75 percent of the total amount to state and local education organizations that work toward improving financial and economic literacy. The U of M center last fall was named a recipient of this money, which ended up amounting to $21,000 - half of which was provided with funds from a long-term sponsorship from First Tennessee. Heath is using the grant funds to conduct four three-day institutes for primary, middle and high school teachers this summer.

Heath's efforts are set against the backdrop of a city that has the unfortunate title of bankruptcy capital of the United States. For the most recent period in which figures were available, Memphis ranked No. 1 in personal bankruptcy filings for the one-year period ending June, 30, 2004, compared with 331 other metropolitan statistical areas in the United States. The total personal bankruptcy-filing rate of the Memphis MSA was 26.11 per 1,000 adults, compared with the U.S. rate of 7.51 filings, according to SMR Research Corp., a Hackettstown, N.J.-based business research firm that studies loan markets and lenders.

Observers say the reasons behind the bankruptcy rates are manifold. Poverty, divorce and home foreclosure rates are typically high here, observes Saralyn Williams, program coordinator for the MemphisDEBT Collaborative, an initiative of the nonprofit group Rise Foundation that is aimed at improving citizens' knowledge of credit and debt. In addition, title-loan lenders and "payday" lenders, whose exorbitant interest rates can trap customers in a cycle of mounting debt, are prevalent in the area. In fact, these types of outfits outnumber traditional banks 261 to 249 in Shelby County, says Williams. "Predatory lending really is a big thing in Memphis," she notes.

SMR principals have also stated that bankruptcy has become such a common way for citizens to climb out of financial troubles that the personal stigma has disappeared. The firm also has published studies that link legalized gambling to bankruptcy filings, citing Memphis ' proximity to the Tunica casino community.

Williams is quick to debunk the skewed perception that many of the bankruptcy filings primarily stem from poor households. The truth is that it cuts across all socioeconomic levels, she states. "It boils down to living on the edge - either through lack of resources or lack of planning," says Williams. "They had the resources but even if they're making $300,000 a year, they're spending $300,000 a year. So when one of these things hits them, they have absolutely no cushion for anything. And it just spirals out of control before they know it."

That's why Heath believes it is so important to weave financial lessons into students' primary and secondary schooling years. "I think everybody recognizes, not just the value, but the imperative for doing this," Heath says. "It's just that teachers don't have the tools."

Business and parents chip in

Several of the city's top companies, including First Tennessee, ServiceMaster, AutoZone and International Paper, have recognized the importance of the initiative, devoting significant funding and resources to the Center for Economic Education. The Memphis branch of the Federal Reserve Bank of St. Louis also has agreed to print general information brochures for the center.

First Tennessee provided $10,000 in seed money for the workshops and in January started a sponsorship of $250,000 over 10 years. The banking firm helped sponsor the center because it seeks to inform younger generations on how to handle their finances responsibly, says Terry Lee, the company's senior vice president for corporate communications.

"First Tennessee recognizes the major problem our community faces from a lack of financial literacy," Lee says. "Being in the financial services business, we know how crucial it is for a person today to understand how to keep the wealth they make and build on it for a secure future."

The financial backing fuels the program's push to demystify finance and economics as impenetrable topics. "Economics is intimidating," Heath says. "So if you can make it so that a kindergartner can understand it, it tears down a lot of that wall."

And there are a lot of barriers to raze. Only 26 percent of 13- to 21-year-olds reported that their parents had actively taught them how to manage money, according to a survey by the American Savings Education Council. As a result, Heath is making sure that parents are playing active roles in several of the programs. For instance, in coordination with Girls Inc., the center will offer a four-week enrichment course next summer for 100 girls ages 12 to 18, as a result of funding provided by the Women's Foundation for a Greater Memphis. Heath also plans to launch a financial literacy pilot program this spring in Memphis City Schools. U.S. Rep. Harold Ford Jr. wrote a letter to the principals in the school system that stressed the importance of the program. The parents of the students who will participate in the Girls Inc. program already have taken workshops led by Heath, and a similar template is planned for the Memphis schools initiative, which will integrate financial literacy materials into the curriculums of first, fourth, seventh and twelfth-grade classrooms. "By including their parents we're hoping it will be reinforced at home," Heath says.

The U of M Center for Economic Education's initiatives beyond the four walls of a traditional classroom include work with the Rise Foundation. Last summer Heath spent a morning conducting a workshop in which she taught Rise Foundation volunteers general financial literacy pointers on saving, spending and maintaining good credit, so they could convey these issues to public housing residents. "She did an outstanding job with that," says Shelia Terrell, director of programs at Rise, adding that the workshops have received positive evaluations from the participants.

Money talks

Paul Baker Miller, a teacher at Immaculate Conception, an all-girls Catholic high school, used the information he garnered from one of Heath's workshops to develop in 2004 a new course for seniors called "Everyday Life." "In many ways it was exactly what I was looking for," Miller says about the workshop and its accompanying textbook.

Miller has designed the class as a kind of road map to navigating early adulthood and building confidence in the decisions one must make in college. "From what I have seen with everything, a major problem that adolescent girls have is with self-esteem," Miller says. Many teenage girls are "overwhelmed with the world around them and they don't feel they fit in," Miller adds.

Teachers at in-service session
During an October in-service day at Collierville High School, Heath guided Shelby County middle-school teachers through a lesson of how geography can dictate a region's economic output.

The class, which is designed to help prepare students for the huge lifestyle shift that arrives with higher education, has featured talks by a banker on credit card debt and a career psychologist on finding a career that will generate happiness and not just money. Miller also has underscored the importance of basic skills such as managing a checking account to his pupils, some of whom now attend the U of M. Angela Burton, a freshman majoring in nursing at the U of M who took Miller's class, says it was a beneficial experience "before going to college because it helped me to manage my money better and not to accept just any credit card offer."

For a younger group of students, elementary school teacher Jennifer Word (BS '96) has used a lesson from one of Heath's workshops to outline the ways in which fictional adolescent Alexander squandered his dollar. To create a visual aid that underscored the lesson on responsibility, Word made copies of fake paper currency and placed them on larger pieces of paper, handing them out to students in her second-grade class at Grandview Heights Elementary in Frayser. "Instead of teaching the people making the money, let's teach the kids before they have it, so when they get it, it won't be a complete shock," says Word, who currently is a surplus teacher at Frayser Elementary. The workshops have another positive byproduct: Since they are literature-based, they count toward the annual tally of hours of professional development required for Memphis teachers under the Reading First grants, says Word.

The elementary school teacher also has used Hershey miniature chocolates to teach economic lessons taking the cue from Heath's workshops. "Anytime you're going to get them to eat, they're going to listen better," Word says.

Of course, Heath's "students" during the geography lesson at Collierville High School don't need chocolate to motivate them. They quickly pick up on the value of the lesson, giving voice to their enthusiasm through a medley of answers to the teacher's questions about the concept of opportunity cost.

"Nobody's head exploded, so are we OK with that?" Heath asks the class.

A collective "Mmm hmm" answers her question.

"Great," says Heath.

She looks down at the next part of the lesson, and continues. This is Heath's fourth workshop of the day, but she still has one more after this. And there's a lot more material she wants to cover before the bell rings.


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