Hello, my name is Felix Schafroth Doty, and this is the first of three blog posts for my English You And The World (YATW) project. For this project, we are to choose an issue in the world, anywhere, and combat it with some form of volunteering. I have chosen Financial Literacy and Education, and the fact that not nearly enough people have the knowledge to live a financially savvy life.
This problem came to my attention when I read a book on teenage finance and education. This book is called The Motley Fool Investment Guide For Teens, written by David and Tom Gardner, owners of a stock investing site. However, this book isn’t just on investing in the stock market. The Motley Fools, as they call themselves, teach you throughout the book about how to be smart and safe with money, and ultimately use it to your advantage. Their website is here.
But anyway, back to the problem at hand: Financial Literacy. This is a definite problem in America, as shown by a recent survey:
The 2012 Consumer Financial Literacy Survey, released in April, Financial Literacy Month, found that despite the recession, Americans still lack basic money skills. More than half of the 1,007 adults polled for the survey admit to not even having a household budget.
Also revealed in the findings:
33 percent, or more than 77 million Americans, do not pay all of their bills on time.
39 percent of Americans carry credit card debt from month to month.
Only 59 percent of adults say they have savings -- a 5 percent decrease from last year.
More than one in four adults say they are now spending more than last year.
42 percent of respondents give themselves ratings of C, D or F on their personal finance knowledge
This means that some of the most fundamental financial tools are not being taught to people, which brings me to the issue I want to address with my project. Financial education is not something that is routinely taught to children, either by parents or schools. When I googled, “Financial Education” and “Lack of Financial Education,” (google search, google search, and other google search. As you can see, just by skimming these searches, there’s an issue.) I saw a lot of programs funded by banks or government branches, but all of these programs are only for people who can access them. People who aren’t members of these banks, or don’t take advantage of their own banks’ education programs, aren’t getting their education from their bank or financial institution. As a side note. some of these bank programs are taking advantage of this advertising opportunity, and teach kids what they want them to know (our bank has the best rates, other banks will cheat you out of money, etc.) Additionally, some neighborhoods don’t have access to a good financial institution, or even a financial institution period.
In addition to the mentioned problems, some parents don’t want to teach their kids about financial education, either because they themselves don’t know about it, or are embarrassed that their kids will find some fault in them. Talking about money and finances is a big taboo in American culture, and frankly shouldn't be. Financial independence and the benefits that come from it can only be achieved if financial education is actively taught in America, both by parents and schools. This is something that has been supported by many sources, including the aforementioned Motley Fools.
This means that action needs to be taken. To me, Health classes (and similar programs) should include a section on financial literacy. In ‘the real world’, something these programs are supposed to prepare you for, money is one of the biggest assets you can have, but only if you know how to use it right. If you don’t handle things like debt, loans, and credit cards correctly, you can be in a lot of trouble. The same goes for sexual education. It’s a big taboo in American culture, but it is also one of the things we need the most. That’s why I think that there needs to be more abundantly accessible financial education programs out there in ‘the real world.’
As a solution to this serious issue, I'm hoping to have talks at my old school and in some advisories here at SLA. That way I can teach more kids about how to be safe and smart.
This is my Annotated Bibliography. You can find plenty more sources there, and some statistics, too.