Moneythink leads movement for financial literacy
By Michael Lipkin, AB’11
Photo by Jason Smith
At Hales Franciscan High School on the South Side, UChicago students are helping to teach the cautionary tale of Antoine Walker, an all-star NBA forward.
The sixth pick in the 1996 draft, Walker made more than $100 million during his 13-year career. But a lavish lifestyle filled with condos, cars, and jewelry ultimately bankrupted him by 2010, a year after he was arrested for passing bad checks to settle a nearly $1 million gambling debt.
It may seem like a simple lesson—make sure to save money, no matter how much you make—but it’s part of a plan to change how urban high school students think about money.
Hales Franciscan is a partner of Moneythink, a UChicago-based non-profit that College students founded to teach financial literacy and entrepreneurship. The group places College mentors in South Side classrooms, offering free, weekly instruction.
The young adults who participate are at high risk of accruing large debts. On average, 18- to 24-year-olds spend almost a third of their monthly income on debt repayment—in part because of a lack of personal finance classes in high schools, says Moneythink co-founder and fourth-year Ted Gonder.
“More people are graduating with more debt than ever before, and it’s affecting our generation’s sense of hope about the future,” Gonder says. “And college students relate to high school students in a miraculous way that goes beyond cultural or socio-economic barriers, so they’re ideal to pass that knowledge.”
Moneythink has spread to campuses across the country and was honored in March by President Obama as a “campus champion of change,” along with four other student groups.
Improving financial illiteracy has the potential to help low-income high school students pursue their dreams of attending college, says Timothy Knowles, the John Dewey Director of the Urban Education Institute. Knowles is an adviser to Moneythink, which from 2009-11 operated in the UEI-run Woodlawn campus of the University of Chicago Charter School.
“Ironically, American public schools don’t pay much attention to money,” says Knowles. “As a result, the students who need to know the most about it often finish school knowing the least. Moneythink is designed to shift that paradigm.”
Moneythink grew out of The Blue Chips, a UChicago investment club, in 2008. Greg Nance, AB’11, wanted to start a community service project teaching South Side high school students how to invest in stocks. Gonder and fourth-years Shashin Chokshi and David Chen signed on; Morgan Hartley, AB’11, another co-founder, joined a few months later.
At first, the group’s idea was a hard sell. Hundreds of cold calls to South Side principals garnered few responses. Once College mentors began lessons inside schools, they quickly realized that investments were not as relevant and urgent to students as ideas such as goal-setting, budgeting, and savings.
“It didn’t matter if they were excited about making a ton of money in investing if the most basic financial literacy was missing,” Chokshi says. “It was glaringly obvious.”
Within months, the curriculum was retooled to focus on smart financial planning. Students are now taught how to open a bank account so they can avoid cashing checks at currency exchanges or taking payday advances. A second set of lessons teaches entrepreneurship, culminating in a year-end conference for students to pitch their ideas to a panel of judges.
Merriel Hartfield, a sophomore at Gary Comer College Prep, says Moneythink inspired her to create a budget and open a savings account for her college education.
“They made me more cautious about how I spend my money,” says Hartfield, who used to buy more junk food and clothes than she does now. “I have to make sure anything I buy is worth it.”
Hartfield also competed in Moneythink’s entrepreneurship conference last year, with an idea to open a student store in Gary Comer. Students looking for after-school snacks were becoming targets of attacks at a nearby gas station. With the help of Moneythink mentors, Hartfield and other students conducted market research for their pitch, studying prices at the gas station and a local Wal-Mart.
“They made us do all the work—coming up with ideas, planning out what students wanted, instead of putting things in that nobody would buy,” she says. “Before that, I didn’t really know what innovation was.”
A year after Moneythink retooled its vision, Gonder began getting calls from friends on other campuses asking how to start their own chapters. Thirty chapters sprouted up by the end of 2010, with hundreds of members.
After some growing pains, the group took steps last year to become a professionally run non-profit. The logistical and financial help should support the student mentorship at the heart of the group’s innovation, says Knowles.
“Moneythink can and should have it both ways,” he says. “It should build a small national team to draw on the deep wells of human capital that exist on college campuses across the nation, and in doing so it can add real value to the lives of children and schools across the country.”
Gonder decided to become the organization’s executive director, and plans to work at Moneythink once he graduates.
The exposure from the White House competition should make it easier to partner with new school districts and attract the funding needed to support Moneythink through the end of the year, Gonder says. Moneythink also has entered the Social New Venture Challenge, a competition sponsored by the Polsky Center for Entrepreneurship and the Social Enterprise Initiative.
“They created a curriculum that works for the students and a delivery mechanism that is so effective,” says Robert Gertner, the Joel F. Gemunder Professor of Strategy and Finance at Chicago Booth, who teaches a New Social Ventures class tied to the competition. “Ted and his team can really pull this off.”