By Ken Sakamoto, Star-Bulletin
Students at Sacred Hearts Academy discuss their strategy
for investing in the stock market last week as part of their
economics class. Sacred Hearts is one of a few Hawaii
schools in which economics is a requirement for graduation.
Valuable lessons
More and more Hawaii students
By Jerry Tune
are learning the financial
facts of life early
Star-BulletinMore and more isle educators are teaching about money management even though Hawaii doesn't require students to take personal finance courses. Sacred Hearts Academy has required economics instruction of all students since 1990, and some of its graduates have gone on to study economics at Harvard and other universities.
But everyone benefits from knowing how to handle their money.
"We get them to prepare a personal budget but also to deal with other situations like losing a job or preparing for a promotion," said Lurline Choy, who has taught economics at Sacred Hearts since 1992. This year Hawaii Pacific University named her secondary economics teacher of the year.
All 12th-grade students at Sacred Hearts must study economics for one semester. The 110 students who take the class each year learn about scarcity, opportunity cost, supply and demand, and taxation.
For example, First Hawaiian Bank sent a representative to talk about just how much interest credit cards charge and how long it takes to pay it back. Students also learn how special accounts can be used to set aside money for a down payment on a home.
"Right now we're looking at the stock market," Choy said. "Students buy companies and follow the prices in the newspaper." (See related story, Page C-4.)
Other private schools in Hawaii require one semester in some form of economics or personal finance class.
Kamehameha Schools has been doing it for about 10 years; Punahou combines economics with a requirement for community service; MidPac Institute has part of a semester for careers and money management; and Lanakila Baptist has two economics courses for seniors. Iolani and Lutheran High School of Hawaii have economic elective courses, but no requirement.
At McKinley High School, about 70 students a year chose to join the "Academy of Finance" which teaches them about banking, finance and economics to prepare them for a career. Part of that is a financial planning course.
Nora Whitford, the academy's director, said it offers instruction from the 9th to 12th grade. McKinley also offers its nearly 2,000 students an elective option "introduction to business," which covers insurance and credit decisions.
Meanwhile, the University of Hawaii's Center for Economic Education is working to give isle teachers more knowledge and confidence in teaching economics. The center uses a CD-ROM with 30,000 pages of materials to teach students from kindergarten through 12th grade.
The CD-ROM is available in all schools with a enrollment of more than 200, but it's unclear how much the materials are being used, said Gail Tamaribuchi, director of the Hawaii Center for Economic Education.
Barbara Wakatake, an eighth-grade teacher at King Intermediate School in Kaneohe, said that some basic economic issues are taught there as part of career explorations.
"These involve supply and demand and how that affects the job market," Wakatake said.
Students also do some basic budget exercises, involving things such as rent, transportation, food, medical and insurance costs, she said. Wakatake said that studying economic concepts at the intermediate-school level makes students more receptive to elective money-management courses in high school.
Still, Hawaii is one of 20 states with no mandatory personal money management education for public schools, so many high school graduates end up without the skills to evaluate the credit-card promotions and insurance pitches that come with adulthood.
"I think we should have a (course) requirement," she said.
Other teachers agree, and some are making an extra effort to learn the best ways to teach money matters. Twenty-nine teachers recently spent a day of training at the Hyatt Regency Hotel under a national program sponsored by the International Credit Association.
C.E. "Chuck" Crawford, executive director of the Consumer Credit Counseling Service of Hawaii, gave one of the presentations. "This is the first time we've had this training in Hawaii," Crawford said. "Most of the teachers were from public schools but Kamehameha Schools also was represented."
Crawford sees the alarming rate of personal bankruptcies firsthand. His nonprofit group counsels people after they get into financial trouble and arranges repayment programs.
But Crawford would prefer to teach students how to avoid financial trouble. Nationwide, an estimated 1.1 million individuals filed for bankruptcy in 1996, an increase of 27 percent from 1995. Hawaii's bankruptcy rate also has skyrocketed in recent years. Last year 3,083 local individuals and businesses filed for bankruptcy, a 52 percent increase from 1995's record of 2,022 filings.
"Every student should be taught about credit and what rental agreements are all about." Crawford said. "If the only thing they learn is what they can afford to buy then the instruction is worth it."
Crawford also gives about 50 lectures a year to adults, at various groups and homeowners' associations.
"I get one comment all the time," he said. "They say, 'I wish I'd known this in high school.' "
Markets’ wild week provided
By Jerry Tune
perfect learning experience
Star-BulletinKathleen Schulte sold off her Johnson & Johnson and ITT Corp. shares and, like many investors in these volatile days, tallied up the rest of her stocks, wondering what to buy, sell or hold. But for Schulte, studying her portfolio is strictly an academic affair.
Schulte and her fellow students in Lurline Choy's 12th grade economics class at Sacred Hearts Academy were busy doing their calculations last Tuesday morning, in the wake of one of the most volatile weeks in stock market history.
"They started (Oct. 27) when the prices dropped," Choy said. "But many of them got cheap prices because they bought after the big drop."
Students surveyed the 554-point decline in the Dow Jones industrial average, decided on their companies and jumped into the stock market.
Every student had to invest a hypothetical $10,000 and carry at least four companies.
Because the class exercise was on a 27-day cycle and involved short-term thinking, no purchases of utilities or mutual funds were allowed.
Students were taught about commission charges and taxes. Choy even plunged them into the details of price/earnings ratios, stock splits and six-month performance figures.
"We'll chart the six most popular stocks," Choy said. "And in some classes we've even filled out forms for capital-gains taxes."
Schulte decided to sell two of her stocks after they jumped up $3 a share. She also owned Toys 'R' Us Inc., Ecolab Inc. and Exxon Corp. Kelly Green had Walt Disney Co., Exxon, Sears, Roebuck & Co. and Kellogg Co., and was busily punching in numbers in her calculator to figure how she was doing.
She had bought them the preceding Thursday, when prices were low.
Some students bought Chase Manhattan Bank and Toys 'R' Us, because they figured it was getting close to the Christmas season and spending would increase. Other favorite companies were Coca-Cola Co., Wal-Mart Stores Inc., and Johnson & Johnson.
Students sweated out the ups and downs just like professional traders. Most financial advisers recommend against that approach for the average investor, but Choy was all smiles at the market's volatility -- it made for a perfect class exercise.
