Commitment to Financial Literacy Creates a Pathway to Increased Financial Inclusion

Four essential financial skills to learn in life are: opening a bank account, building and maintaining credit, Invest and save for retirement. The problem is that these essential four are rarely taught in schools alongside STEM and other subjects as part of the critical skills. But this knowledge can pave the way for financial success and inclusion later in life.



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Some kids are occasionally exposed to special meetings on topics like how to save for college or why not spending everything you make on your first job is a bad idea. But widespread financial literacy is not happening on a large scale – which is a big problem. As pointed out in a Forbes article, only 20% of people have someone in their life that they have trust to share money secrets. That’s a scary statistic.

That’s not to say, however, that financial education isn’t on the radar of some of the country’s leaders and politicians. according to a March 2022 survey by the Council for Economic Education, 23 states require high school students to take a personal finance course and 25 states require high school students to take a business course. On the other side of the coin, three states and the District of Columbia do not include personal finance measures in their educational standards anywhere.

Future financial literacy

However, things can look up. As noted in a 2021 New York Times article, more than 20 states are considering it Require financial literacy in their schools. In addition, Congress is making progress in promoting increased financial literacy in the classroom. For example, Rep. Matt Cartwright (D-PA) introduced HR 1547 – Youth Financial Learning Act, which aims to provide grants to integrate financial literacy education into public elementary and secondary schools.

Efforts are also being made at state and local level. According to the National Conference of State Legislators, 38 states introduced new financial literacy laws in 2021. These are certainly steps in the right direction. And hopefully these steps are a positive start to a future of financial inclusion for all.

Balanced personal budgets: A goal worth pursuing

Millions of young people are now learning how to manage their finances in no time. They may see a parent or grandparent writing a check every now and then. More likely they don’t. So many people now carry most or all of theirs online banking. This means that it is kept away from children’s eyes. So they don’t learn the details of these day-to-day transactions with theirs e-bank.

That needs to change. Far too many people, particularly from underserved communities, have been excluded from the mainstream financial system. It will only become more difficult for their children and grandchildren to build a better life if they do not know how to keep a transaction account or budget.

In fact, building a strong financial literacy foundation is critical to driving greater financial inclusion. The more people become familiar with the ins and outs of the financial system and the resources available to them, the better placed they are to actively improve their financial well-being.

Take access to fair and affordable credit, for example. Many people want to buy a car, own a home, or have the capital to start a business. They can only realize these great ideas if they have at least some understanding of what wealth is and how to appropriately manage it.

Demystifying money for the benefit of present and future generations

As a society, we already have many significant, ambitious goals that we hope to achieve sooner rather than later. Financial education should be at the top and best implemented in schools.

What is the main benefit of incorporating money management into the K-12 curriculum? First, bringing financial education into the classroom creates a life cycle of financial literacy. Children who learn about money early can build on this basic knowledge and understand more as they get older.

Another benefit is that educators become smarter about their own financial decisions. When we teach our teachers how to successfully navigate the mainstream financial system and become more financially literate themselves, they get excited about the subject and help them teach children better.

A final benefit is the long-term impact of demystifying money on entire families and even circles of friends. Young people can take the lessons they learn in the classroom to their parents and peers. This would allow everyone to learn and demonstrate healthier habits together. It’s a chain reaction that better prepares our communities to improve their financial health and well-being. This, in turn, would lead to greater financial inclusion in the future.

Again, these positive results can begin quickly in the classroom. It doesn’t have to be a challenge for any school to get started talk about money Whether in elementary, middle or high school. It doesn’t even have to cost anything – which is an ironic bonus.

Make financial education a priority

Below are some strategic ways for eager teachers and administrators to make financial education a priority.

1. Schools can partner with key stakeholders to promote financial literacy.

A school or school district does not have to “go it alone” when it comes to bringing money issues into the classroom. Many big players in the financial sector, such as banks and mortgage lenders, have sharing schemes.

Take Experian and the Jumping cupcakes Coalition for Personal Financial Literacy, for example. The two companies have been working together for many years. Together they recognize and celebrate the value of financial education to drive greater financial inclusion in all communities. Her work has provided teachers with information, tools, and resources to teach all students, especially those historically excluded from the mainstream financial system.

2. Teachers can find ways to include money in everyday conversations in the classroom.

Some critics of financial education in schools might say that this is easier said than done. They point to too many competing priorities, too few qualified teachers, and a lack of time and resources. Of course, these are all valid concerns. But when most people deal with money on a daily basis and rely on finance to get them through their day-to-day lives, there is no reason to marginalize financial literacy.

Without a doubt, hardly any other school subject could be imagined that could or would be condensed into a single day or a single week. Teachers should be encouraged to talk about money in different ways. A history teacher might address how governments allocate their budgets or collect taxes. A math problem can have a money component. Putting money into the classroom is easier than it sounds. There are online resources like the Jump$tart Clearinghouse where teachers, parents, and even students can find effective financial literacy materials from a variety of sources.

3. Schools and after-school programs may accommodate special financial guests.

To honor them, many schools invite financial leaders from their communities to class. As great as the teachers are, the visitors spice up the school day and the pros can exchange views on the multi-faceted and complex aspects of finance. In addition, children can ask questions and get answers from people who already work in this field.

The problem is that far too often schools and individual teachers have to overcome some hurdles to organize guest speakers and teachers. Perhaps a silver lining to the COVID pandemic is our increased convenience in virtual communication, making it easier for someone from a local bank, credit bureau, credit union, investment firm, or nonprofit to take 30 minutes every two weeks to to discuss relevant money topics with a class and answer questions. These small touchpoints may not sound like much, but over time they can add up and help people become better financially informed and pave a future path to financial inclusion.

4. Teachers can follow financial services organizations and professionals on social media.

Keeping up with constant developments in finance can be a challenge for even the most qualified personal finance teachers. Unfortunately, many schools lack sufficient resources for training programs and the limited preparation time available to teachers is insufficient independent learning. However, social media offers teachers an easy and inexpensive way to learn about finance expertise and trends.

By following finance professionals on social media and programs like Experian’s #CreditChat, teachers gain access to insights, information, announcements and resources. The trick, however, is to make sure you’re following reputable organizations or accredited professionals and not self-proclaimed experts and influencers.

A world full of bright, self-confident wealth managers

Right now, the financial literacy of children and adults across the country could be better. OppU research suggests that more than half of all adults are affected worried about their financesbut more than three-quarters live from one paycheck to the next.

It doesn’t have to be like this forever.

Ensuring young people understand finance at the earliest possible age will help them develop healthier wealth accumulation and spending habits. As one of the leading societies around the world, Americans must stand up and shoulder the burden of helping children and adults make wiser money decisions.

Certainly the education system has a lot on its plate. Nonetheless, including educational tidbits about money and the financial system will go a long way toward increasing financial inclusion, transforming everyone’s opportunities — and maybe even transforming the world.

Authors:

Rod Griffin has over 20 years of experience in the information services industry and is a recognized expert in consumer credit reporting and assessments, fraud and identity theft, and other consumer information and data usage issues. Griffin is Senior Director, Consumer Education and Advocacy at Experian.
Laura Levin Laura Levine, President and CEO of Jump$tart, has led the organization since 2004. She is Jump$tart’s primary spokesperson and chief strategist.

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