What Month Is It Again?

April is National Financial Literacy Month, as declared by Congress in 2004.  

So what will change by the end of this April?  In truth, not much.  There still is no consistent educational requirement that financial education be taught in schools, even though most people I speak with are adamant that it should be taught in High School.  Today financial literacy is addressed in a fragmented manner; by some terrific non-profit organizations, dutiful and dedicated educators, and by thought leaders in the financial services industry.  And yet:

• We will still read next year that only 40% of American’s can afford a $1,000 unplanned expense.  
• We will still discover that most Americans have not saved enough for retirement as they approach the age of 65.
• We will learn that student loan debt will continue to rise and remain a burden for recent graduates.

If you're reading this on LinkedIn, there is a good chance that your personal financial literacy is quite high.  You have a successful career, ambition and drive.  You likely have a college, and perhaps, post graduate education.  So how did you become smart about money?

Try and recall, if you can, when you first started to understand what money meant to you and your family.  How did you learn?  Who taught you?  Your parents?  Friends or siblings?

Now fast forward to today.  How confident do you feel about making decisions about budgeting and goal setting, saving and investing, borrowing and managing credit?

If you are honest, at least one of those topics causes some trepidation.  Now imagine someone without your education and experience, someone from a less advantageous socio-economic background.  How confident do you think that they feel?  The answer is, not very.  And that lack of knowledge, and confidence, has a significant opportunity cost to the financial future of young people.

What can you do, if you want to help solve this problem?  If you have children, start with them.  The site investopedia.com offers a helpful article called "ten tips to teach your child to save money".  These are easy ways to engage children, yours or others, on the topic of money.

What can you do to reinforce this education in school?  I volunteer with a couple of local organizations that can partner with your local school.  The first is Junior Achievement, which offers age appropriate classroom and online tools for elementary school through High School.  These programs cover basics about jobs, business creation, money and entrepreneurship. You might even consider volunteering yourself.  Very rewarding.

The second, here in Minnesota, is called Best Prep, and serves grades Four through High School in all matters financial literacy related.

Talk to school leadership and your children’s teachers, and introduce these organizations to them.  Ask them how they are educating kids about money and making good decisions. Introduce these two organization to teachers.

Failing to educate our young people about budgeting and goal setting, saving and investing, borrowing and managing credit and even how businesses work, make money and stimulate the economy is a huge, silent “tax” on all of our futures, and theirs.  

It’s only April 1st.  We still have time to make National Financial Literacy month matter this year.