Dimension+Consulting



Proposal for Christiana School District

__// Addressing the need to educate high school students going into college on financial responsibility //

[insert image later]

By: Dimension Consulting  __

Cover Letter
 * __ Table of Contents __**

Abstract Introduction Procedure/Research Results Recommended Solution Appendix _

Cover Letter

Dimension Consulting 123 East Main Street Newark, DE 19711 DiCon@company.org

May 18, 2009

John Smith Christiana School District 600 North Lombard Street Wilmington, DE 19801

Dear Mr. Smith:

In response to the Christiana School District's request for proposal concerning the financial trouble in which high school graduates find themselves, we at Dimension Consulting have proposed a solution. We researched what caused college students' debt and how much debt accumulates. We found the financial problems to be easily avoided if the Christiana School District were to implement a class concerning finances. Speaking with a high school counselor confirmed our belief that this would be helpful. Enclosed, please find our proposal to lessen college student debt, including a detailed curriculum of the high school class we wish to implement.

Thank you for the opportunity to work for the school district. We hope you are pleased with our suggestions. If there are any remaining questions, please do not hesitate to contact us at DiCon@company.org. We look forward to working with you in the future.

Sincerely,

Kimberly Smith Dimension Consulting

This report has been created via the request of Christiana School District to address the growing issue of financial debt amongst new college students and how to possibly fix the issue. Our company researched today’s statistics on what percentage of college students find themselves in debt due to reasons such as tuition loans, housing, credit cards, and lack of banking knowledge. This report provides statistics from websites such as [|www.jumpstartcoalition.org] and [|www.statehealthfacts.org]. Our company also interviewed Mrs. Karen Heyd, a guidance counselor at Woodbridge High School, to gain an inside opinion on whether or not it would be a good idea to implement a class on financial planning for seniors going on to college. In her personal experience, she has seen many high school graduates return with stories about financial trouble. With the gathered information, our company has concluded that it would be useful to include a new class for seniors that teach financial planning such as developing a budget, school loans, financial aid applications, and ways to save money. We have also provided class criteria/curriculum. We believe that taking this step is a start in the right direction and you can be the leader for many schools to follow.
 * __Abstract__**

__**Introduction**__

The United States is in the midst of a financial crisis. Issues with unemployment, inflation, bankruptcies, the housing market, and stock market are a growing concern. The goal of our company was to find a way for high school students who are entering college to obtain the knowledge of how to manage their finances and to avoid as much debt as possible. In this time of economic crisis, it is pertinent that students know how to save their money. As stated in the video that addresses the same problem, "Maxed Out", some college students actually commit suicide because of the debt they have incurred (Heyd). After researching the intensity of the problem, we have come up with a recommendation for a solution to help minimize this growing problem.

__Procedure & Results __

We chose to narrow our research specifically to Delaware. According to www.statehealthfacts.org.index.org, 21% of children who are 18 and under are living in poverty,15% of all Delaware residents are living in poverty, the current unemployment rate it at 7.7%, and 1 out of every 902 houses have gone into foreclosure.This information is very important because it shows the standard of living for most of the Delaware community.

Individual Responsibility for financial crisis:

41% of US adults (or 92 million people) grade themselves a C, D or F on their knowledge of personal finance (2009 Financial Literacy Survey from the National Foundation for Credit Counseling). This is a very disappointing number. If the parents don't know how to handle money, then how can their kids be expectied to handle money with the cost of living ever increasing? Not only will economic awareness help the students, but the students can also go home and help their parents.

One third of adults (32%), or 72 million people, have no savings and nearly half (48%) of Gen Y adults have no savings. (2009 Financial Literacy Survey from the National Foundation for Credit Counseling). This is important because these numbers show that nearly half of all people entering college have no savings to put towards college tuition. This means that students will start at 0 and just plumit into debt.

On third of adults (33%) do not put any of their annual income towards retirement (2009 Financial Literacy Survey from the National Foundation for Credit Counseling). Not only do students need to know how to handle money during college, but they also need to be able to handle money later on in their life.

Teens

Teens spend $179 billion dollars annually. Imagine if this money was being put in savings. Teenager need to recognize the importance of saving money so that they can be prepared for any unexpected payments.

The Jump$tart Coalition’s biannual survey showed that high school students have little knowledge of money management and other financial basics. In their 2008 survey, high school seniors answered less than 50% of the questions correctly. ([]). This is very bad. These statistics show that the students leaving high school do not know how to handle finances. Nothing can put you in debt quicker than now knowing how to handle money.

Identify funding opportunities

1) DE Financial Literacy Intstitute (http://www.dfli.org/index.cfm) 2) Banks in Delaware

Identifying funding opportunities gives students a chance to save and even earn money. An important part of staying away from debt. Review similar programs for best practices & their benefits

Other programs to help with teaching financial importance

1) DE Money School 2) The NEFE High School Financial Planning Program® - money management curriculum (www.jumpstartcoalition.org) 3) Money Talks – a financial literacy curriculum for teenagers in California. Topics include money personalities, easy ways to save, car buying, credit, banking, food buying and shopping saving. After taking part in the Money talks program, teens had a significant knowledge gain and a positive change in their money management behavior. (http://ucanr.org/delivers/impactview.cfm?impactnum=170)

Being able to identify other programs will allow you to compare different teaching options. It is very important to base your program on a currently good and working program.

We also interviewed Ms. Karen Heyd (Guidance Counselor at Woodbridge High School). She said that starting an economic/accounting class would be a very good idea. It is important to consult with professionals in this line of work. They have first hand experience on how to fix these types of problems.

Conclusions & Recommendations

After careful consideration, we recommend that you install a class teaching economics and accounting. Research shows that credit card companies can target this group of young adults and trick them in to debt. With the enlisting of an economics/accouting course, students will better understand how to save money, stay away from credit card debt, and better prepare themselves for the hardship of college tuition.

We believe that financial education will encourage teens to make better decisions about their finances, both now and in the future. Personal responsibility will lead to them being safeguarded from future downturns, plus will encourage an end to the spending culture we live in. Develop & implement curriculum for high school students to improve financial literacy and to help them make fiscally sound decisions.  Curriculum:  APPENDIX
 * Income
 * Paychecks & Taxes
 * Determining how to spend your money
 * Money Management
 * Developing a budget
 * Tracking expenses / balancing your checking account
 * Checkwriting
 * Savings & Investing
 * Developing Short Term & Long Term Goals
 * Banking products & Retirement Planning
 * Ways to save money
 * Using credit wisely
 * Credit Cards & Interest Rates
 * School Loans / Financial Aid Applications
 * Credit Scores
 * Course Structure : Full year course
 * How to implement
 * Teacher Training
 * Textbooks
 * Ways to make it fun
 * Metrics to track success
 * Provide students with a financial literacy test at the beginning and end of the course to test understanding of concepts

1) Is there a problem with student debt? 2) What has Woodbridge done to combat this problem? 3) Have you thought about starting an econmic/accounting class? 4) What other possibilities have you thought of? 5) Do you think these classes would work? 6) Is a class feasable?

Works cited

Delaware Financial Literacy Institute__. 2009. Delmarva Digital. 12 May 2009 [].__

Heyd, Karen. Personal Interview. 9 May 2009.

JumpStart Coalition__. 2008. JumpStart Coalition for Personal Financial Literacy. 14 May 2009 .__

Kaiser. Kaiser State Health Facts__. 2009. Kaiser Family Foundation. 12 May 2009 .__

__Peterson, Shirley. "Money Talks: Program improves financial literacy of teens."__ ANR Impact__. 12 May 2009 [].__

^^just a note, Pippa. When this goes in the word doc, the second line of a citation should be indented. the wiki is retarded and won't let me indent. they're in alphabetical order though so I think other than indentations, works cited is done =)

__Appendices__

This is just some writing I did Friday on this. If you want to take some of it and see if we can fit it in. I think we could definitely add the progams considerations section. My heads still kinda spinning trying to get a grasp of this project and what we need. Brad


 * __Introduction __**

The United States is in the midst of a financial crisis. Issues with unemployment, inflation, bankruptcies, the housing market and stock market are growing concerns to all Americans. The answers to how we got here and what we can do to resolve are complex and cannot be directly attributed to any one group or issue. However, there are ways for individuals to reduce the impact that a financial crisis has on them personally and protect their financial future. The goal of Dimension Consulting’s report is three fold - to research the intensity of the issues facing Delawareans, identify gaps in financial literacy and to develop an effective program to address the issues and gaps found.

__Why Delaware? __ Some key statistics gathered from [|www.statehealthfacts.org] show that Delaware has been hit hard by the economic crisis. The unemployment rate is 7.7%, due to cut backs in key industries like banking, automotive and chemical. One out of every 902 houses are currently in foreclosure, leaving many residents without a place to live. Additionally, 15% of all Delawareans, and 21% of children 18 and under, are living in poverty. These types of statistics demand action to be taken.

In addition, ’s Governor Jack Markell is a proponent of teaching financial literacy [BKB1]<span style="color: rgb(0,0,0); font-family: Times New Roman;">   <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">. As the former state treasurer, he developed the Delaware Money School to promote financial education for all state residents. We feel that with the support of the local government, as well as programs like the Delaware Money School, developing a financial literacy program for teens will be achievable.

__<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">Why Focus on Financial Literacy? __ <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">According to the Delaware Financial Literacy website (http://www.dfli.org), “Financial education improves financial literacy and changes financial behavior for the better. Financial knowledge is critical in overcoming financial obstacles and the stress finances can cause. Financial education is especially important for low-income families because economic literacy education is the foundation needed to build assets for individuals and their families. It is only by creating savings and understanding and establishing credit that individuals can achieve the ultimate goal of securing assets, such as a business, a home, or an education.”

The 2009 Financial Literacy Survey [BKB2]<span style="color: rgb(0,0,0); font-family: Times New Roman;">   <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">made this connection between financial education and financial success very clear. 41% of US adults (which is over 92 million people) would grade themselves a C, D or F on their knowledge of personal finance. Over one third of adults have no savings for the future and one third of adults do not put any of their annual income towards retirement. These behaviors have led to a culture where spending outpaces earnings and debts outweigh assets. This has resulted in total U.S. consumer debt, which excludes mortgage debt, reaching $2.56 trillion at the end of 2008. (Source: Federal Reserve's G.19 report, February 2009). We see a huge opportunity to educate individuals on financial literacy and help them to make better financial decisions for themselves and their families.

__<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">Why Focus on Teens? __ <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">The Jump$tart Coalition’s biannual survey showed that high school students have little knowledge of money management and other financial basics. In their 2008 survey, high school seniors answered less than 50% of the questions correctly, meaning they were unable to <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';"><span style="color: rgb(0,0,0);"> answer basic financial questions regarding credit, savings, interest, and insurance. It is no surprise then, that teenagers are facing the same issues as adults when it comes to financial security issues. 76 percent of undergraduates have credit cards, and the average undergrad has $2,200 in credit card. Additionally, they will amass almost $20,000 in student debt. (Source: Nellie Mae, "Undergraduate Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends"). <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';"> The teen years are a critical time for developing good financial habits. Our focus is on the education of high school students, prior to them entering the workforce or college, where they will be facing both financial independence as well as personal responsibility for their debts. Given that teens spend over $179bn annually and the rising costs of education, we feel it is critical to educate the youth of Delaware in order to promote fiscal responsibility for the future.

__<span style="font-size: 11pt; color: rgb(0,0,0); line-height: 150%; font-family: 'Arial','sans-serif';">Procedure & Results<span style="color: rgb(62,157,63);"> __ <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">We believe that financial education will encourage teens to make better decisions about their finances, both now and in the future. Personal responsibility will lead to them being safeguarded from future downturns, plus will encourage an end to the spending culture we live in. Our proposal focuses on the development and plans to implement a curriculum for high school students to improve financial literacy and to help them make fiscally sound decisions.

__<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">Review of Financial Literacy Programs: __ <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">Financial Literacy is not a novel concept, so we felt the best place to start was to review other programs available throughout the country. Below is a brief summary of a few of the programs studied. 1. Make a Difference Wisconsin, a non profit organization, delivers financial education to eleventh and twelfth graders in the Milwaukee area. The program consists of six classroom visits, during which the volunteers engage students by sharing personal experiences and utilizing hands on activities. The curriculum focuses on budgeting and saving, checking accounts, credit cards, credit history and credit reports. (http://www.makeadifferencewisconsin.org) 2. Camp Millionaire teaches financial concepts and money management in a one week summer camp environment. Camp instructors deliver lessons on making money, investing, and budgeting and use role playing, games and activities to make the concepts easier to understand. ([]) 3. The NEFE High School Financial Planning Program is a money management curriculum designed by educators and financial professionals. The curriculum is focused on creating financial plans and budgets, learning about savings, investing, managing debt, and financial services. The materials are provided to schools and organizations free of charge. (http://hsfpp.nefe.org/) <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif'; text-decoration: none;"> __<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">Program Considerations __<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">: 1. Curriculum : There are certain fundamentals that are essential for teens to learn in order to become financially literate. These core competencies should be incorporated into any financial education program. A brief description of each is below: <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">2. Course Logistics: <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">3. Cost of Program : the cost for the program will also vary, depending on formality / structure, how much is leveraged versus built and the resourcing required. A low cost and high cost option are detailed below. <span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">4. Measuring Success : in order to ensure the program is effective and efficient, we must develop ways to measure its success. The best way to do this is to survey the students prior to attending the course, at it’s end and then a few months in the future. Key components of the survey would be questions on the actual curriculum, as well as questions on their views on personal finance. The results would be compared to ensure students have a better understanding of key financial concepts, as well as a more fiscally responsible attitude towards their finances. <span style="font-size: 11pt; color: black; font-family: 'Arial','sans-serif';"> __<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">Recommendations __<span style="font-size: 11pt; color: black; line-height: 150%; font-family: 'Arial','sans-serif';">
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Setting financial goals – developing short term and long term goals for both earning and spending money
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Money management – developing and maintaining a budget; tracking expenses and balancing a checking account; writing checks
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Banking basics – types of financial institutions and banking services
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Saving money – identify ways to save money and options
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Using credit wisely – credit cards and how interest is calculated; types of loans; credit scores
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Voluntary versus Mandatory : According to the Jump$tart Coalition, there are three states (Utah, Missouri and Tennessee) that require at least a one semester course devoted to personal finance. Seventeen other states require that personal finance instruction be incorporated into other subject matter. The remaining states, including Delaware, have no requirement.
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Program Offerings : There are a myriad of delivery methods for financial literacy instruction. Programs such as Money Talks (http://moneytalks4teens.ucdavis.edu) are online resources that allow teens to self study using video, articles, and more. Other programs have seen success using workshops, during which a single topic or a range of topics is taught. The most formal method of delivery is coursework that is integrated into a high school’s curriculum.
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Types of instructors : Instructors can range from professionals from the local community who receive training and then devote a portion of their time volunteering to certified teachers who focus on financial literacy full time.
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Low cost option: $40,400 annually
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Program Management : $25,000 for part time employee to collect and track registration information, make copies, manage site & volunteer logistics, build and maintain website, feedback collection
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Materials : $5,000 for copies & mailings, assuming we leverage free program materials (i.e. from NEFE)
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Instructors & Training : No cost
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Site : $10,400 to use hotel meeting space one night a week for a year
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">High cost option: $7.89 million
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Program Management : $25,000 for part time employee to manage instructor certification, material distribution, feedback collection
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Materials : $25,000 for development of curriculum, leveraging best practices from similar programs
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">Instructors & Training : $7.84 million
 * <span style="font-size: 11pt; line-height: 150%; font-family: 'Arial','sans-serif';">There are 117,668 high school students in DE public schools ([]). This is roughly 29,000 students in grades 12. If we assume that each teacher would have approximately 300 students per year (5 classes of 30 students, split into two semesters), this would require an additional 98 teachers. Assuming the average teacher costs $80,000 per year in salary and benefits, the total cost would be $7.84 million.

After careful consideration and research, we recommend that the school district pilot a financial literacy course with high school seniors in the fall of 2009. The curriculum should be based on the key components listed above : setting financial goals, money management, banking basics, saving money and using credit wisely. The course should be mandatory for all students in the graduating class and should be taught by a certified instructor.

The key reason we recommend a pilot at this time is due to the cost of rolling out the program to all public high schools ($7.48 million). Given the budget restraints, we recognize that is just not feasible. We recommend that after the first year of the pilot, the survey results should be collected and summarized. The results, along with the benefits of the program should be used for grant writing to organizations like the DE Money School and to the various financial institutions that make their home in Delaware. Based on the funding available, we recommend further distributing the program across the state.

__Conclusion__ We believe that financial education will encourage teens to make better decisions about their finances, both now and in the future. Personal responsibility will lead to them being safeguarded from future downturns, plus will encourage an end to the spending culture we live in. Developing & implementing curriculum for high school students will improve financial literacy and help them make fiscally sound dec<span style="font-size: 11pt; color: black; font-family: 'Arial','sans-serif';">isions.