July 12, 2020

Tennessee Teachers Helping Their Students Learn Financial Literacy

Teachers in Tennessee, which in 2009 had the highest rate of Chapter 13 bankruptcy per capita in the United States, believe it’s never to early to teach children how to handle money and make smart choices.

The $mart Tennessee Financial Literacy program, which is taught to first-, fourth-, and seventh-graders as well as high school students, aims to teach children and young adults that money does not grow on trees. The program is in its fourth year in Tennessee, and in 2008-2009 it reached over 15,000 students.

Cordova Elementary school teacher Jennifer Conti gave her fourth-grade class a lesson on the difference between goods and services. A fast-food chain was used as an example. While the children understood that their parents paid for edible goods, such as burgers and fries, at the chain, they also heard their parents complain about bad service. Another example was if a good such as a computer was purchased, Conti explained to her class that it’s a service if someone comes to your house to set the computer up or fix it.

Students also learn about the link between education and careers. “I learned the more education, the more cash,” said fourth-grader Lauren. “If you have a lot of talents and skills, you get much more money for that,” said classmate Zeric.

According to Marilyn Taylor, who oversees social studies in Memphis City Schools, “Saving is a big part of this; it may just be a nickel in your hand, but saving a nickel each week will add up. This is about more than money, if students learn to make wise choices, that goes across their whole life. It’s about decision-making.”

In the Western District of Tennessee, which includes Memphis and Jackson, 20,029 individuals or businesses filed for bankruptcy last year. The $mart Tennessee Financial Literacy is hoping to reduce the number of filings in future generations by teaching children early on about money and economics in terms to which they can relate.

Bankruptcy Filings Soar in Middle Tennessee

The Tennessean recently reported that bankruptcy filings in Middle Tennessee rose as much as twenty percent in 2009. Hit especially hard were those in the home building and trucking industries. What is more concerning2010 increase is that industry experts and bankruptcy attorneys believe that that number will continue to rise throughout 2010. Playing a role in the steady increase was credit card debt, unemployment, real estate foreclosures, and medical debt. Homebuilders often found it difficult to manage their businesses when their subcontractors were not paid. If they were unable to collect, then it was likely that the main homebuilding business would have to file for bankruptcy.

The twenty percent increase includes both business and individual filings in Middle Tennessee. In addition to this increase, there was also a rise in the number of individuals filing for Chapter 11 bankruptcy. Specifically, there was a fifty-seven percent increase in these filings in Tennessee, due primarily to wealthy individuals filing for bankruptcy in accordance with business debt reorganization laws. Although the bankruptcy laws were changed in 2005 to make it more difficult for consumers to enter into bankruptcy, the poor economy, record unemployment figures, and the housing market bust have contributed to increased filings.

In fact, business bankruptcies across the United States rose to a record thirty-eight percent since the new bankruptcy laws went into effect. In Middle Tennessee alone, there was a fifteen percent increase in business filings under Chapter 7. According to the Associated Press, 2009 was the seventh worst year for bankruptcy filings at 1.4 million. Although the states with the largest increase in petitions were in the West, including California, Tennessee until only recently had the highest per capita rate of bankruptcy filings. Nevada surpasses Tennessee just this past month; however, the state still remains number two in this area.

Although the bankruptcy process is difficult on consumers, it has also been hard on many of the creditors. Mortgage companies, credit card companies, vendors, contractors, and subcontractors are all fighting to collect money owed to them in a bankruptcy. Most of the time, they lose. And, although there are reports that the economy shows some signs of improvement and that unemployment will begin to taper off here one year after the stimulus plan went into effect, most experts agree that bankruptcy petitions will continue to increase in at least the first half of 2010. Those states with inflated filings (such as Tennessee) already are sure to see those increases almost double.