Teach Your Children Well: The Atlanta Fed and Financial Literacy

3/29/2018

Tom Heintjes: Hello, and welcome back to another episode of the Economy Matters podcast. I'm Tom Heintjes, managing editor of the Atlanta Fed's Economy Matters magazine. April is Financial Literacy Month, so I thought it would be the perfect time to sit down and talk with Amy Hennessy, the Atlanta Fed's director of outreach and economic education. Welcome to the podcast, Amy.

Amy Hennessy: Thanks, Tom.

Photo: David Fine

Heintjes: Amy, before we get farther in I should mention that not only are you our director of financial education, but you taught economics in Georgia schools for 24 years, and you were a Georgia CouncilOff-site link on Economic Education Teacher of the Year for economics—so hopefully some of your former students are listening to this and nodding their heads.

Hennessy: I'm excited to chat with you today. And yes, there are at least two of my former students who may listen to this podcast: my daughters, Caitlin and Maggie.

Heintjes: All right—well, welcome to Caitlin and Maggie! Amy, when you joined the Bank you emphasized the workshops we hold for teachers—and in fact, the number of teacher workshops we held in Atlanta and around Georgia doubled in your first year at the Bank. Why were those workshops such a point of emphasis for you?

Hennessy: Tom, I feel I've learned through personal experience. Having spent my teaching career attending different Georgia Council and Atlanta Fed economics workshops, I knew the power of these in-person professional development programs. Every time I attended a workshop, I was certain to return to the classroom and implement one, if not more, of the hands-on lessons or activities that had been demoed during the program. I especially loved coming to the workshops at the Fed, where we always had Fed researchers or analysts as keynote speakers.

It was at a Fed workshop where I learned from Pierce Nelson, a former AVP [assistant vice president] in Public Affairs, that the FOMC [Federal Open Market Committee] boardroom at the Board in DC was where General Eisenhower and his staff planned the D-Day invasion.

Heintjes: Wow!

Hennessy: Yes, I had that feeling as well.

Heintjes: That's pretty heavy.

Hennessy: Yes, it is. I never imagined then that one day I would have the great fortune to moderate a teacher town hall with Chair [Janet] Yellen in that boardroom—it still gives me goosebumps.

Heintjes: Wow, that is incredible.

Hennessy: Yes, it was.

Heintjes: Amy, some people might be surprised to know how seriously the Atlanta Fed—and really, the entire Federal Reserve System—is involved in promoting economic and financial literacy. Has this always been a part of the Fed's mission, or is it a relatively recent initiative?

Hennessy: This is a fun story, Tom. By 1976, there were shared concerns within the Federal Reserve System about the lack of public understanding of the Federal Reserve—and I'm sure that's not surprising, really.

Heintjes: Yes, some of those concerns persist.

Hennessy: Yes. But President Lawrence Roos of St. Louis agreed to draft a public information program for the System. The St. Louis Fed's Ruth Bryant was instrumental in a campaign to help educate the public about the Fed and its actions. Her staff were charged by President Roos with surveying hundreds of people in the St. Louis phone book to determine whether the public understood what the Federal Reserve did. She and her staff found that some 95 percent didn't. I'm sure that's not really surprising.

Heintjes: Wow, no. Just hearing about phone books takes me back, in fact.

Hennessy: Absolutely...the good old days, huh? [laughter] Well, President Roos's plan ultimately outlined the need for outreach in general and included outreach to educators and students. As [Reserve] Banks and the Board implemented his plan, economic education programming began to grow.

Heintjes: And what form did that programming take?

Hennessy: Well, the System Economic Education (SEE) group was formed, so economic and financial education staff throughout the System could share information and leverage potential efficiencies through collaborative projects. By the early 1990s, the informal gathering of Reserve Bank education staff evolved into the System Economic Education group, and a chairperson for the group was designated. I recently had the privilege to serve as the chair of that group. So teaching about the Fed and our role in the economy naturally led to the realization that understanding economics and the financial system were directly tied to the Fed's mission of promoting a strong and stable economy and financial system.

Heintjes: Right, part of the dual mandate.

Hennessy: Absolutely. The economy needs productive workers, and it also depends on consumers, whose individual spending decisions collectively account for two-thirds of economic activity—that part of GDP [gross domestic product], right? Personal consumption expenditures.

Heintjes: So the better decisions they make, the better the overall financial system is.

Hennessy: Absolutely. When consumers are skilled in managing their finances, they become better prepared to weather bad times. They become stronger households in terms of their finances, and they can help sustain growth and stabilize the economy and hopefully mitigate an economic downturn. Knowledge and information about how to fully participate in the financial system is really essential to the success of our economy.

Heintjes: So these notions sort of get to the root of why financial literacy is so important to us?

Hennessy: Absolutely. Really, I think there are two primary reasons. First, at the end of the day, our economy depends on it. Financial literacy is especially important in times where increasingly complex financial products, such as those leading up to the most recent financial crisis, are easily available to a wide range of the population. Thus, making the right financial choices can lead to security and mobility. In addition, financial ignorance carries significant costs—one mistake can set an individual or a family back, sometimes for a lifetime.

Heintjes: Right. You know, decades ago when I was in elementary school, there was a program where students were issued a passbook from a real bank and we could deposit money—it was a quarter, or a dollar, or whatever amount. And our passbooks were stamped—you know, the little ink stamp—and we could see the increasing savings, interest on the savings, and so on. Is that something schools still do, or is that too primitive for today's complicated financial system and today's savvier students?

Hennessy: You know, I wouldn't necessarily characterize that as primitive. It's just that savings instruments and products have evolved. Also, while the behavioral practices being instilled through the savings passbooks of our generation are evergreen, it is essential that parents and teachers employ informal and formal techniques to teach age-appropriate personal finance topics and skills, to ensure their children and students achieve the best possible outcomes for a lifetime of financial capability. It's important for young children to learn about the concepts of scarcity, opportunity cost, and the power of delayed gratification. In addition, instilling the fundamental appreciation of, say, paying yourself first can be transformative for individuals.

Heintjes: Sure. Well, Amy, let's talk a bit about how the Atlanta Fed conducts its education outreach. I know you have a team throughout the District. Can you briefly describe your team and how it's structured?

Hennessy: Absolutely—it'll give me great pleasure to. We have a senior education program manager at each of our five branches—Jackie Morgan is in Nashville, Julie Kornegay in Birmingham, Lesley Mace in Jacksonville, Gloria Guzman in Miami, and Claire Loup in New Orleans, as well as Sherilyn Narker here in Atlanta—who develop and deliver programs, both in person and virtually as webinars, for teachers in their respective states or zones, and in collaboration with System colleagues. In addition, the team creates resources for our external website, and their respective workshops and conference presentations. In Jacksonville and Miami, Lesley and Gloria also manage and conduct the guided tours of our museums. All of our team members also serve on educational and nonprofit advisory boards, in addition to establishing and enhancing partnerships with other economic and financial literacy providers.

Heintjes: Wow, that's quite a network. So your team works with teachers, and the teachers in turn work with students. But you all don't work directly with students?

Hennessy: Well, actually, while our primary strategy is based on a "train the trainer" model—which capitalizes on the multiplier effect, since teachers who attend our programs are going to reach, on average, 75 students per year. And actually, in the case of most economics and personal finance classes, that number is higher since most of those courses are generally offered as a half credit, one-semester course—we actually do reach students directly. We reach tens of thousands of students annually through our guided tour programs and our museums in Atlanta, Jacksonville, and Miami, as well as through various employability skills and financial literacy programs for students of all ages. We partner with Junior Achievement, Jump$tart, Habitat for Humanity, Academies of Finance, the Girl Scouts, and various other nonprofits to deliver direct-to-student programs.

Heintjes: Yes, I recently helped you out with some Junior Achievement.

Hennessy: Absolutely, and I can't thank you enough for helping me with that program, the JA Academy in a School program, with students. We had over 200 kids here from Banneker and Norcross, and I couldn't have done the program or pulled it off without your support, Tom, so thank you. And Tom—he's too humble to admit it, but he is one of our outstanding tour ambassadors, and has been involved in that program for years and years.

Heintjes: Well, you're very kind. I do love to help tell our story—we have a great story to tell.

Hennessy: Absolutely.

Heintjes: We mentioned your teacher workshops a little earlier. Can you describe for me what a typical—if there is a typical teacher workshop—what it's like? Ideally, what do teachers leave with that they didn't arrive with?

Hennessy: Essentially, we cover key concepts and topics related to the workshop's theme by conducting lesson simulations and demonstrations. Our goal is to have teachers leave with increased content knowledge, new pedagogical methods—so teaching strategies and applicable, classroom-ready resources.

Heintjes: Well, we all know teachers can always use more instructional resources. What sort of physical resources do you make available?

Hennessy: Teachers always leave with files of the curricula, the lessons, the physical posters, for instance, that are produced by our district's team. And we showcase our resources—they can be found at https://www.frbatlanta.org.

Heintjes: Little plug there.

Hennessy: Absolutely, shameless. But generally speaking, they also leave with resources from our System colleagues, such as disposable workbooks, access to the St. Louis Fed's instructor management panel called Econ Lowdown—that resource includes online courses, video Q & A, and podcasts from multiple districts—and then they also leave with files for lessons and activities from these other districts.

Then, you know, Tom: we have the very popular souvenir bags of shredded money.

Heintjes: But wait, there's more!

Hennessy: Yes! These are always so popular with teachers and students, and you know—being so involved in our ambassador program—we do produce a lot of shredded money here in Atlanta.

Heintjes: They love the shred.

Hennessy: Yes. [laughs]

Heintjes: Amy, is part of our outreach also to teach students about the Fed's role in the economy and the financial system, or is the focus more strictly on financial literacy, compounding interest, basic economic concepts—things like that?

Hennessy: We offer a wide variety of programs that cover basic and advanced topics in economics and personal finance. And yes, this invariably includes information and resources for teaching about the Fed's role in the economy and the financial system.

Heintjes: I see. Well, the Atlanta Fed took the calamity of Hurricane Katrina in 2005 and produced Katrina's Classroom, which taught students about the importance of financial preparedness and being ready in the event of an emergency. Does a lesson like that reach students more effectively because it was a real event and not some hypothetical textbook scenario?

Hennessy: Absolutely. We continue to hear from teachers, over a decade after the initial release of the Katrina's Classroom curriculum, how compelling their students find the short video clips. We interviewed three students and their families who were directly affected by Katrina, and in these video clips they tell their stories and the lessons that they learned about—the importance of preparing a family emergency plan; of needing to have an emergency savings fund so that if you're living paycheck to paycheck, you actually have some resources to fall back on if a crisis happens; the importance of managing your credit use wisely; again, having access to online banking; having all your papers and documentation in place.

We recently, a few years ago, updated the curriculum. We have chunked it into a series of shorter activities, and we've developed that personal finance infographic poster series to highlight the main concepts associated with financial preparedness, budgeting basics, the importance of banking, developing human capital, saving and investing, and developing good credit. So we have distributed the posters, you'll be interested to know—and I'm very proud to say on behalf of our team—to teachers in all 50 states, as well as internationally, as far away as, for instance, Jakarta.

Heintjes: Wow! Amy, you mentioned System peers—not just in the Atlanta Fed's district, but other Reserve Banks. How much collaboration is there among the Reserve Banks when it comes to education outreach? Is there a discussion of best practices, what got the best response, sharing expertise—things like that?

Hennessy: If I do say so myself, the System Economic Education group stands out as one of the best examples of collaboration, and the power of collaboration, across the districts.

Heintjes: Well, you say that with no bias.

Hennessy: None whatsoever. [laughter] But, I will say: this System group, as I said earlier, was established in the '90s, and it's just strengthened over the years thanks to the leadership of many of my respected colleagues. We do share best practices, we share costs for programming and resource development. We really work to avoid replication of resources. If there's already an outstanding resource that fits the bill from one of the other districts, we're going to defer and use that resource rather than developing something that would be seen as a competitive resource. We conduct professional development conferences. We develop joint programming in resources, and—thanks to the Kansas City Fed, who hosts the site—we offer every district's education resources for teachers, students, and the general public at federalreserveeducation.orgOff-site link .

Heintjes: A nice shout-out to a sister Bank.

Hennessy: Absolutely.

Heintjes: Amy, as the economy evolves, and as young people's thinking about money evolves with new technologies and so forth, how do you see our outreach and education efforts changing down the road? Are there new educational needs now that maybe didn't exist a decade ago?

Hennessy: Indeed. The classroom I left eight years ago is considerably different today. One of the most significant changes has been in the digital environment. Many schools have adopted a "bring your own device," or one-to-one initiative, that requires teachers to facilitate lessons for their students that leverage their personal computing devices—you know, those phones that they all carry around. One of our regular workshop attendees here in Atlanta, Brian Wallace—an AP teacher in the local system—introduced us to an application that allows students to graph their answers to questions on their phones, tablets, or computers and to simultaneously screen-share on his whiteboard.

Heintjes: Wow.

Hennessy: Yes, it's very powerful. This generates class discussion and evaluation and is a powerful form of formative assessment, ongoing assessment.

Heintjes: So it sounds like the kids are not getting their passbooks stamped anymore, like I was. [laughs]

Hennessy: Yes, no more stamping of the savings passbook. But I say all of this, I share this as an example, to emphasize that our team is working tirelessly to stay current and responsive to these changes, this evolution. We develop lessons, activities, resources, and programming to give teachers the tools to meet the ever-changing landscape.

I must say, though, that today—in 2018, as it was when I started teaching in the 1980s—one of the most effective ways to teach the basics of supply and demand and market equilibrium is to simulate a market, say, in wheat or oil. That is an evergreen lesson, an activity, and an example of the efficacy of well-designed, interactive, hands-on lessons.

Heintjes: Well, it's good to know some things never change. Amy, this has been a great conversation, and it should please you to know that I learned a lot, which is a great way to start off Financial Literacy Month. So thank you so much for coming on the podcast to talk about the work of you and your team.

Hennessy: Oh, the pleasure has been all mine, Tom. Thanks for the invitation.

Heintjes: Well, we're at the end of another episode of the Economy Matters podcast, and I should add that we'll offer links to a lot of what Amy's talked about today—a lot of the resources that we've discussed—so you'll be able see what we've been talking about. And you'll definitely want to join us next month on the podcast, because we'll be joined by Raphael Bostic, president of the Atlanta Fed. Raphael is approaching his first anniversary as the president of the Bank, and so his insight should be fascinating. And again, I'm Tom Heintjes, managing editor of Economy Matters, and I really appreciate your spending time with us today.