What the NFL can teach us about financial education
by. Henry Meier
Recently, a veritable who’s who of current and former NFL players including former Baltimore linebacker Ray Lewis and former wide receiver and legendary big-mouth Terrell Owens filed a suit seeking to blame BB&T Bank for the loss of nearly $60 million. According to the article, the players are contending that the bank should have realized that their money was being taken out of their accounts without their permission by a former financial advisor who was recently banned from providing representation to players. At least when these players lose their money, some of them can get jobs with one of scores of cable sports networks, which I have come to believe are nothing more than employment services for ex-NFL athletes. (It amazes me that you’re not really qualified to be an analyst unless you spend about a decade getting and giving concussions, but I digress).
Even without knowing all the facts about the case, the plight that the NFL players find themselves in is yet another example of why we need better financial education in this country. Of course, most people don’t make millions playing football, but that just means that taking charge of their financial obligations and properly managing the money they do have is all the more important. For example, one of the most counter intuitive but important concepts behind banking is that when you deposit your money in a financial institution, that financial institution is taking on nothing more or less than the obligation to transfer money in and out of that account at the request of the account holder. In other words, a credit union is not a fiduciary of a member’s funds. A bank account is no more than a creditor/debtor relationship.
Very few people disagree with the potential value of financial education, at least in theory. But five years after the financial crisis, New York and many other states have yet to incorporate basic financial literacy into the every day curriculum of elementary and secondary school students. There are two basic reasons for this lack of action. First, it is argued that schools are already loaded down with mandated standardized tests and curriculum. New York, like the vast majority of states in this country, has introduced a common core curriculum. Second, while everyone is in favor of greater financial literacy, it’s not clear how to most effectively provide it. For example, one recent research paper estimated that most financial education has a deminimus impact on consumer decision-making.continue reading »