The State of Personal Finance Education In The United States
Americans as a group are woefully lax at managing money. Many borrow too much, are poor at repaying debts and postpone planning for retirement until its right in front of them. Worse still, they make terrible investment decisions based on advice they should have dismissed.
Statistics bring focus to the problem. The Pew Research Center reports that three of every four people in this country haven’t saved enough for future needs A third of all American adults say they haven’t saved anything for retirement, according to Bankrate.com, and the median retirement account balance for all working-age people was just $3,000 in 2014, the National Institute of Retirement Security reports.
Year after year, the storyline continues, and studies suggest the problem is inter-generational, with many college students graduating with no plan to repay student loans and a pile of credit-card debt.
The Importance of Financial Literacy
But a growing cadre of educators and non-profit organizations are trying to fight back with new curriculums aimed at making financial education part of every secondary-school program.
“We want people to have a financial education before they become adults,” said Laura Levine, president and chief executive of Jump$tart Coalition for Personal Financial Literacy. “We need to do better. We need to educate more students with courses offered more often.”
Jump$tart Coalition is a Washington, D.C.-based consortium launched in 1995 to encourage financial-training programs. The goal is to create a population that is informed about financial choices and competent enough to make good decisions, the essence of financial literacy.
But it’s an uphill struggle.
Financial Education in Schools
Schools districts across the nation complain that they lack the money and staff to take on new programs. The sort of financial training they offer varies greatly. According to the Council for Economic Education, 17 states require that students take a personal-finance course to graduate high school, and only five require that the course be a full-semester standalone.
“Financial education is the classic underfunded mandate,” Levine said. “The states say the programs are necessary, but they often leave it to the local school districts to find the money.”
Jump$tart and other groups are pushing for improvements. They point to the number of people who graduate from school with a very limited understanding of how to budget money and how debt can lead to trouble if it isn’t managed properly.
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Online Financial Literacy Tools
The problem has grown in an age of seemingly limitless financial choice. Credit cards, which not long ago had strict underwriting standards, are now widely available. Online access to financial services and promotional email has made credit offers of all sorts a ubiquitous part of life.
But the internet has also brought more tools for managing money, offering a vast array of free financial-planning calculators and budgeting apps. The trick is deciding which are worth using and knowing what to do with them.
The website mymoney.gov, for example, has advice divided into three categories: youth; teachers and educators; and researchers. There are sections devoted to each group with information ranging from games that help children understand the concepts of saving and spending to a roadmap for financial abuse of retirees.
The site 360financialliteracy.org takes that idea and puts it on steroids with topics aimed at eight different stages of life from teenagers to retired. You identify the stage of life you’re in – student, parent, homeowner, crisis, etc. – and you will find news and information aimed at your situation, along with tools and calculators that can help solve problems you may be encountering. You can even submit questions to the Ask The Money Doctor and see what he prescribes for debt relief.
If you are a high school or college student or a school administrator teaching financial skills, you might want to visit cashcourse.org where you will receive financial education courses that include assignments, customized worksheets and calculators and articles geared toward answering real-life questions about money.
The federal government gets into the act with the website federalreservereducation.org that offers teachers excellent guides for educating children from kindergarten all the way through college. Subject matter includes material on credit, personal finance, consumer protection and other areas of interest to students.