TEACHING FINANCIAL LITERACY IN K-12 SCHOOLS: A SURVEY OF TEACHER BELIEFS AND KNOWLEDGE BY DAN OTTER B.A., Journalism, San Diego State University, 1988 M.S., Curriculum Design, California State University, Fullerton, 1999 DISSERTATION Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Language, Literacy, & Sociocultural Studies The University of New Mexico Albuquerque, New Mexico May, 2010 ACKNOWLEDGMENTS The completion of this project would not have been possible without the enormous help of numerous individuals. My advisor, Dr. Penny Pence, not only encouraged the exploration of this important topic, but also provided keen guidance and support. Each of my committee members — Dr. Cheryl Torrez, Dr. Nathalie Martin, and Dr. Don Zancanella — provided expertise that greatly enhanced this project. Dr. Torrez was particularly helpful with the analysis of the findings. Dr. Martin’s financial literacy expertise, especially in the area of predatory lending, was invaluable. Finally, Dr. Zancanella’s ability to succinctly frame large conceptual issues and challenges aided not only this work, but will inform future projects. It truly takes a village to complete a task of this scope. My parents, David and Barbara, were unbelievably supportive. They also provided timely babysitting services. Lily and Ben, my adorable children, were not only a key motivation for this project, but also a source of inspiration, often saying: “You can do it!” There is not enough space to document the way my wife, Mandy, helped with this project. Suffice to say, this dissertation would not have happened without her love, support, and guidance. Finally, I want to thank the University of New Mexico for a truly life-changing experience. iii TEACHING FINANCIAL LITERACY IN K-12 SCHOOLS: A SURVEY OF TEACHER BELIEFS AND KNOWLEDGE BY DAN OTTER ABSTRACT OF DISSERTATION Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Language, Literacy, & Sociocultural Studies The University of New Mexico Albuquerque, New Mexico May, 2010 TEACHING FINANCIAL LITERACY IN K-12 SCHOOLS: A SURVEY OF TEACHER BELIEFS AND KNOWLEDGE BY DAN OTTER B.A., Journalism, San Diego State University, 1988 M.S., Curriculum Design, California State University, Fullerton, 1999 Ph.D., Language, Literacy, & Sociocultural Studies, The University of New Mexico, 2010 ABSTRACT The purpose of this study was to learn teacher attitudes and beliefs about teaching personal finance, as well as teacher understanding of a few core personal finance concepts. The population consisted of 1,120 classroom teachers from two public school districts in two states. The research questions were: (a) What are teacher attitudes and beliefs about personal finance instruction? (b) What are teacher understandings of a few core personal finance concepts? Data were gathered using a survey instrument. Questions were divided into four categories: (1) policy; (2) instruction; (3) professional development; and (4) concept knowledge. Descriptive statistical methods were used to analyze survey responses. The response rate was 16 percent, or 181 classroom teachers. Participants in this survey strongly support the teaching of personal finance topics in K-12 schools. Close to 83 percent agree or strongly agree with the statement, “It is important for schools to teach financial literacy.” Teachers at all grade levels in this study — elementary, middle, and v high school — favor starting personal finance instruction in elementary school. Lack of suitable curriculum, lack of classroom materials, lack of instruction time, and lack of subject matter knowledge were identified as barriers to successful personal finance instruction. Respondents preferred format for professional development is a workshop that increases teacher financial literacy. The mean score for the 12 personal finance questions was 37.5 percent. vi TABLE OF CONTENTS LIST OF TABLES.............................................................................................................. x CHAPTER ONE INTRODUCTION................................................................................ 1 Background of Study .............................................................................................. 1 Statement of Problem.............................................................................................. 3 Significance of Problem.......................................................................................... 5 Overview of Methodology...................................................................................... 5 Delimitations of the Study ...................................................................................... 6 Definition of Terms................................................................................................. 6 Financial Literacy ....................................................................................... 6 Organization of Dissertation................................................................................... 6 CHAPTER TWO REVIEW OF LITERATURE.............................................................. 8 Search Process ........................................................................................................ 8 Historical................................................................................................................. 9 Home Economic Movement ..................................................................... 11 The Thrift Movement................................................................................ 17 The Consumer Movement......................................................................... 27 Modern Financial Literacy Movement ..................................................... 41 Effectiveness of Personal Finance Mandates........................................................ 58 Teacher Understanding of Economic, Consumer and Personal Finance Concepts ................................................................................................................... 61 Theoretical Framework......................................................................................... 68 Summary............................................................................................................... 70 vii CHAPTER THREE METHODOLOGY ........................................................................ 73 General Perspective .............................................................................................. 73 Research Context and Participants........................................................................ 73 Instrumentation ..................................................................................................... 74 Data Collection ..................................................................................................... 76 Data Analysis........................................................................................................ 77 Summary of Methodology .................................................................................... 78 CHAPTER FOUR RESULTS ........................................................................................ 79 Respondent Demographic Information................................................................. 79 Policy ....................................................................................................... 86 Instruction ................................................................................................. 91 Professional Development ........................................................................ 94 Final Literacy Self Assessment................................................................. 99 Personal Finance Knowledge Questions................................................. 102 CHAPTER FIVE SUMMARY AND DISCUSSION................................................... 115 Summary of the Results...................................................................................... 117 Policy ..................................................................................................... 117 Instruction ............................................................................................... 119 Professional Development ...................................................................... 121 Concept Knowledge................................................................................ 123 Discussion of Results.......................................................................................... 126 Vision for Professional Development..................................................... 129 Suggestions for Additional Research...................................................... 135 viii REFERENCES ............................................................................................................... 137 APPENDIX A SURVEY INSTRUMENT ................................................................... 146 APPENDIX B IRB APPROVAL ................................................................................. 159 APPENDIX C THREE CONTACTS ........................................................................... 160 ix LIST OF TABLES Table 1 Jump$tart Financial Literacy Survey Results for High School Seniors: 1997- 2008 (Jump$tart, 2008)............................................................................................. 44 Table 2 Summary of Recent Studies on Personal Financial Literacy of Young Americans