Money & Kids: Shape Up, America, From the Ground Up

Financial literacy must be a national priority

by Muriel Siebert

Muriel “Mickie” Siebert, the founder and chairwoman of Muriel Siebert & Co., has been known as the “First Lady of Wall Street” for almost two generations. She was the first woman to own a seat on the New York Stock Exchange, paying nearly half a million dollars in 1967 for the privilege.  For five years, beginning in 1977, she served as superintendent of banking for New York State — the first woman to hold the job. She was appointed by a Democrat, then Gov. Hugh Carey. Muriel Siebert & Co., the seven-branch brokerage house she founded when she bought her NYSE seat, was a pioneer in discount brokerage, in time going public (SIEB, for the Siebert Financial Corp., on the NASDAQ).

NEW YORK — In the past few years, America has been working through the aftermath of the worst financial crisis since the Great Depression. There were many causes of the crisis. Not the least of them is the fact that Americans are in dire need of financial competency. The problem is, of course, exacerbated by the growing complexity of the financial world and marketplace.

Young people 25 years and less, armed with credit cards, and people 65 and older are the fastest growing age groups filing for bankruptcy. They weren’t taught about handling money at school or at home.

When I opened my new discount brokerage office, Muriel Siebert & Co., in 1969, every young woman fresh from college who wanted a job on Wall Street walked in. So did every widow with money. Soon it became apparent to me that none of them had any real knowledge of finance.

When the former-governor Hugh Carey unexpectedly asked me to serve as New York State banking superintendent, I put my brokerage firm in a blind trust and took the job. From my office high up in the World Trade Center, I got an even broader look at the how many people lack personal finance basics. A parade of panicked teenagers would stream into our consumer services office, their credit maxed out, on the brink of bankruptcy, confused and scared, hoping for help.

Forgot to mention taxes

One young man with a part-time job brought in his paycheck and complained that some of his money had been “stolen.” No one had told him about taxes. These kids didn’t understand that by charging last night’s dinner on a credit card and paying the minimum balance, they would be paying for that meal for years. I was horrified that these youngsters were financially finished before they started.

That’s when it became clear to me there was an urgent need to empower people – ideally starting with middle and high school students – to handle their finances. A financially capable populace can only strengthen the economy, fostering a brighter future for  our country.

I sat down with the then-chancellor of New York City’s Board of Education, Rudy Crew, and worked out a program to teach high school students the fundamentals of personal finance. This became the Siebert Personal Finance Program: Taking Control of Your Financial Future, which went into New York City public high schools for senior students in 2004.  It was one of the early financial literacy education programs for young adult in the nation.

Promoting economic knowledge and decision making

The aim of the  program is economic knowledge and decision making. It teaches  the mechanics of credit cards, debit cards, prepaid cards and loans in core sections: Money & Income; Budgeting & Planning; Banks & Banking; Credit & Bankruptcy; Saving & Investing, and Protecting Your Assets/Insurance. Its aim is economic decision making and is based on the undeniable fact that consumer protection is self protection, an ability to avoid problems in the first place and knowledge of what to do when you experience a problem.

When I opened my new discount brokerage office, Muriel Siebert & Co., in 1969, every young woman fresh from college who wanted a job on Wall Street walked in. So did every widow with money. Soon it became apparent to me that none of them had any real knowledge of finance.

When I was growing up in Cleveland, children were taught how to save. We got saving stamps from a vending machine, put them in a passbook and took them to a bank. There they would mark your savings book so that you could see your savings go from $33 to $36. I didn’t learn about money any other than the way it added up in the savings book…and what it could buy you. That kind of discipline doesn’t exist these days — at home or in schools.

My father died broke after a long bout with cancer. He was a dentist and had a degree in engineering from Case Western Reserve in Cleveland Ohio. Our family moved out of our house into a one-bedroom apartment; I dropped out of college, although Western Reserve — where I was attending at the time — allowed me to continue with my courses.

Though I lacked a college degree, I knew I knew numbers. Numbers talk to me. I’d get A’s without studying. So in 1954 when I came East  with  only the dream of a life on the Street, I was able to launch my career as a $65- a- week trainee in the research department at the brokerage firm Bache & Co., eventually specializing in the airlines and aerospace industries.

It’s a man’s world

But back then, women weren’t paid anywhere near what men were. So I decided to start my own business. For that, I needed a seat on the New York Stock Exchange. Back then, all 1,365 members of the exchange were men. But in 1967 I purchased the first seat ever sold to a woman. In 1975, my firm, Muriel Siebert & Co.,  became one of the nation’s first discount brokerages.

Today, my program is used in New York City public schools to senior and middle school students. It is also taught in schools in nine other states including Florida and New Jersey. The Muriel F. Siebert Foundation finances the Siebert financial literacy program for the schools.

These days with student debt and college costs so high, the students seem to want more than ever to learn about money, At Benjamin Cardozo, a large, highly ranked public high school in Queens, the senior class on the final test have scored an average of 94 consistently for the last eight years. Teachers there tell me the kids are more interested in personal finance and money than anything else they study. They want to know about interest rates; how not to get into debt with credit cards, what makes a high and low credit score. How can they pay for college?

Three states, including New Jersey, require at least a one semester course devoted to personal finance. Nineteen other states, including New York, incorporate personal finance instruction into other areas, such as economics, math and social studies. Financial literacy can be mandated at a local board of education level. The State of New Jersey mandates financial literacy as a requirement for high school graduation.

A financially capable populace strengthens the economy, fostering a brighter future for our country. Financial literacy changes lives — and strengthens the nation. And I will keep pushing for personal finance education to be a graduation requirement in schools in every state of the nation.