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Shahar Ziv; Huffington Post 7/12/2012
Summer always brings a certain excitement as a new crop of freshly minted college graduates descends upon Manhattan and other cities, ready to take on the world. But while these young adults come armed with diplomas, a new wardrobe, and endless ambition, most lack a solid grasp of what it means to be financially literate. Today's graduates are diving into the real-world financial pool without even the basic strokes of personal finance. As the recent financial crisis has illuminated, not only is the water quite deep, but there are also plenty of sharks and, unfortunately, not as many lifeguards as we would have hoped.
A fundamental shift in risk, most notably in the transition from guaranteed pensions to individual retirement accounts such as 401(k)s, means that the economy that today's graduates enter is structurally different from the one of previous generations. Simultaneously, most Americans, young and old, display a strikingly low level of financial literacy. A 2010 Financial Literacy Survey of adults, conducted on behalf of the National Foundation for Credit Counseling, Inc., revealed that 34 percent of U.S. adults (over 76 million people) gave themselves a grade of C, D, or F on their knowledge of personal finance. On questions dealing with compound interest, inflation, and risk diversification, studies by Professors Annamaria Lusardi and Olivia Mitchell show significantly low rates of understanding among the general population and specifically among certain demographics including women, African Americans, and Hispanics.
The lack of financial sophistication in the United States has severe consequences. Academic research has found that individuals who are not financially literate are less likely to plan for and accumulate retirement wealth, participate in the stock market, and refinance mortgages during periods of falling rates. More
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Closing the Gap in Economic Education: Financial Literacy Begins in the Classroom
Nan J. Morrison, President & CEO, Council for Economic Education
Huffington Post Blog 04/30/2012
Like most young adults fresh out of college, saving for the future wasn't my top priority when I landed my first job. Left to my own devices, I can't say for certain I wouldn't have spent almost every cent of those paychecks, if not for my father reminding me once a week, every week, to contribute to my 401(k). He never missed a call -- and I never missed a payment.
But not everyone is so lucky to have a mentor like I did.
Parents are Lacking in Financial Know-How
If there's one lesson we've learned from the recent recession and its painful fallout, it's that an alarming number of Americans lack the basic dollars-and-cents understanding they need to navigate today's global economy. The gap between what people know and what they need to know is widening every day.
Just consider these stats:
Only 49.7 percent of U.S. adults can define a "budget deficit."
9 million households have neither a checking nor a savings account.
29 percent of Americans have no savings at all.
It would seem that an overwhelming number of American adults are ill-equipped to instruct their children in economics and personal finance. But they're not the only ones.
Teachers and Schools Come up Short on Economic Education
Many teachers are also woefully under-educated when it comes to financial literacy. In a recent survey, 20 percent of teachers stated that they do not feel competent to teach basic personal finance. And those who actually teach economics to high school students have often received minimal college instruction in the subject.
That said, some schools have ramped up financial education requirements in the years since my organization, the Council for Economic Education, has been tracking their progress. In the year 2000, only seven states required a high school personal finance course to be offered; by 2011 that number had doubled to 14. But our most recent Survey of the States shows that in the past two years, that momentum has slowed, and in some cases even come to a halt.
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Remarks by Richard Cordray, Director of the Consumer Financial Protection Bureau
at the Jump$tart Annual Awards Dinner in Washington, DC on April 18, 2012
Thank you for inviting me tonight. From my work with Jump$tart over the years, I know you to be a leader in improving financial literacy from kindergarten to college. So I am glad to be here with so many who share the same objectives as the Consumer Financial Protection Bureau.
My own history with your organization has been very positive. Back when I served as a county treasurer in Ohio, my primary initiative was to collect more unpaid delinquent property taxes. And let me tell you: That kind of project really makes a person popular! Reflecting back, I can now see how actually doing that hard work brought my team and me face to face with very different categories of people. Some resisted paying their share because they had gotten away with ducking us before. Some would not prioritize payment until they were sure we were serious about pursuing them. But many people were simply "down on their luck," to borrow a quaint but apt phrase – with the adversity consisting of unplanned and unwelcome events such as disease, divorce, job loss, or a death in their family.
People's troubles were often magnified by their incomprehension of financial matters. Difficult situations led to bad decisions. That experience led me to form a local committee on personal finance education. We gathered information about school programs for young people and community programs for adults, such as there were, and looked to match people up with those available resources. Eventually, we became more ambitious and set a goal to pass legislation that would require every student to receive personal finance education before graduating from high school. It is not easy to change anything about the high school curriculum, but we managed to do it, with the help of a broad coalition that included Jump$tart. And what we found next was that there was so much more work to do. By this time, I was serving as State Treasurer, and we worked with the same broad coalition to develop curricula and organize teacher training in hundreds of school districts. It was hard work, but we believed deeply in it and the difference it could make for people, which made it all feel enjoyable and worthwhile.
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The Survey of the States is a biennial report that brings attention to the critical importance of economics and personal finance education by documenting its status in the fifty states and the District of Columbia.
The recent economic downturn has brought nationwide attention to the dangers of a financially illiterate society. The 2011 Survey shows that while there has clearly been progress since the first Survey in 1998, that over the last two years, the trend is slowing and in some cases moving backwards.
The survey can facilitate an important dialogue that must take place between those who recognize that this knowledge is critical for young people and the decision makers that can effect change.
Key Findings
The number of states that now require students to take an economics course as a high school graduation requirement increased from 21 in 2009 to 22 in 2011.
However, only 16 states require the testing of student knowledge in economics, 3 fewer than in 2009.
No improvement has been seen in the area of personal finance. The number of states that require students to take a personal finance course (or personal finance included in an economics course) as a high school graduation requirement remains at 13.
Only 2 more states now require that personal finance content standards be implemented, bringing the total to 36.
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By Rachel McGrath
Posted April 7, 2012
There are likely few people who have weathered the recession of the past four years unscathed and that's one reason, advocates say, that children need to be better prepared for their personal economic future.
Margo White works for Junior Achievement of Southern California, a nonprofit organization dedicated to educating students about entrepreneurship and financial literacy through hands-on activities.
"What we have just experienced as a nation and continue to deal with, how adults manage money or not, has become a topic at the forefront of people's thoughts on a daily basis. It has brought the topic of financial education to a level it's never been in the past," White said.
April is National Financial Literacy Month. More than half of U.S. adults admit that they do not have a budget, according to the 2012 Financial Literacy Survey released this month by the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association.
Read more:
- vcstar.com
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By Loren Berlin | Huffington Post
While The Great Recession has left millions of Americans unemployed and wiped out countless retirement accounts, it hasn't inspired educators to get serious about teaching financial literacy. Today, less than half of states require high school students to take an economics class and fewer states require high schools to offer financial literacy classes than in 2009, according to a new report from the Council on Economic Education.
Since 2009 only one state has introduced new requirements that high school students study economics in order to graduate, while three states actually stopped testing students' knowledge of the field, according to the report. Financial literacy courses haven't fared much better. As of 2009, 15 states required high schools to at least offer such classes. Today that number has dropped to 14.
By downplaying the importance of financial literacy, states are missing out on the chance to better equip high schoolers to succeed as adults, according to a 2010 study from the National Endowment for Financial Education.
After surveying nearly 16,000 college students, researchers concluded that students from states that required a financial education class were "more likely to display positive financial behaviors." Specifically, when compared to their peers, these students were more likely to save money, less likely to max out their credit cards, less likely to make late credit card payments and less likely to be compulsive buyers.
Full article and map of States
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By Eric Gneckow, Business Journal Staff Reporter
NORTH BAY — At a time of historic strain on funding for schools in California, a number of local and national efforts are under way to support training in what many say is an important and often overlooked life skill for young adults — personal finance.
It's an issue that has drawn attention from the likes of the White House and California schools Superintendent Tom Torlakson — that a marked lack of money management skills helped fuel a surge in consumer debt in recent years, besieging personal finances and slowing down the nation's economic recovery.
Yet despite that high level of support for financial literacy efforts, education officials said the solution is not as simple as creating a required financial literacy curriculum in California. Mandated courses come with mandated costs — costs that not every school district can afford.
"Every time we mandate a course, it's $1 million dollars," said Nancy Miller, director of career pathways and community outreach at Santa Rosa City Schools. That district could face an $8 million cut in the next fiscal year.
In lieu of a mandated course and in an approach advocated at the state and national level, schools in the North Bay have chosen to integrate financial literacy into their academic offerings, embracing the topic while pursuing partnerships with nonprofits and financial institutions that enhance those efforts at no cost to districts.
Read more: Financial, nonprofit, schools join on financial literacy
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PostStar.com: Blake Jones Feb 19, 2012
A Lake George man is working to bring a financial literacy program to schools, banks - and even television.
Tony Intelisano, a local resident with a background in television syndication, has been working with downstate advertising executive Mark DiPippa to promote The Centsables, a group of animated superhero characters who deliver messages about financial fundamentals to children ages 6 to 12.
Intelisano said he came up with the idea because there seemed to be a lack of youth-oriented financial literacy programs in the marketplace. DiPippa created the characters and educational materials.
The pair has been developing the concept for about five years, and they said the subject matter has never been more important.
"It's more relevant today than when I first had the idea," Intelisano said, referencing the recession and financial crisis. He added that kids need to build the foundation of financial literacy early, because by high school they may have already picked up bad habits.
Read more: http://poststar.com/business/local/an-animated-way-to-teach-financial-literacy/article_ff7c2cca-5a7c-11e1-8a14-0019bb2963f4.html#ixzz1nH2X03B3
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...in everyone's Future.
A well done video to share with other adults, from HSBC
So far, we've put more than $2.5 million to work teaching high school students skills they'll bank on for a lifetime.Learn More
When students understand money, it really pays off. Watch now for a look at the world we'd like to see.
http://www.youtube.com/watch?v=sQY3DdOAQtU
Imagine what a little personal finance education could do to change kids' financial future. Each year, H&R Block Dollars & Sense provides grants, curriculum and scholarships to bring personal finance education to high schools and teenagers nationwide. Because we'd love to see teens learn things like balancing a budget and paying a car payment, before they're out on their own.
To see if schools near you are participating or to learn more about teaching teens money management skills, visit www.hrblockdollarsandsense.com.
Charles Schwab Foundation and Boys & Girls Clubs of America Announce Annual Innovation Award Winners
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Charles Schwab Foundation and Boys & Girls Clubs of America Announce Annual Innovation Award Winners for Creative Delivery of Financial Education
Teens Nationwide Learn Essential Lessons about Personal Finance through Innovative Implementation of the Money Matters: Make It Count(SM)Program
SAN FRANCISCO, Oct 06, 2011 (BUSINESS WIRE) -- In an effort to recognize Boys & Girls Clubs across the nation that have gone above and beyond in teaching youth the basics of personal finance, Charles Schwab Foundation has announced the 2011 winners of the Innovation Awards. In their third year, the annual awards recognize Clubs that exemplify unique and enterprising techniques for delivering the Money Matters: Make It Count curriculum, a Charles Schwab Foundation and Boys & Girls Clubs of America teen financial education program. One Boys & Girls Club was selected from each of the country's five geographic regions for its demonstrated commitment to making personal finance education compelling and meaningful to today's youth. The following winners will each receive a $3,000 grant from Charles Schwab Foundation.
-- Boys & Girls Clubs of Metro Atlanta (Georgia),
-- Boys & Girls Clubs of Southwest Washington (Washington),
-- Boys & Girls Club of Cheyenne (Wyoming),
-- Boys & Girls Clubs of Philadelphia (Pennsylvania), and
-- Boys & Girls Club of Dane County (Wisconsin).