April is Financial Literacy Month – a time for us to reflect on what we’re doing to promote and support financial literacy in the United States, and hopefully focus on making improvements. But a recent survey indicates that we need to try harder – and we might even be losing ground!
The press release of the survey, which was run by the Jump$tart Coalition and funded by the Merrill Lynch Foundation, shows that high school seniors are actually performing even worse on financial literacy than they did two years ago. For the first time, the Jump$tart survey also evaluated college students, and although they performed better than high school students, the results were still rather abysmal.
So what can you do about it? Well fortunately, there are some great programs and initiatives emerging that show signs of promise.
The first is from KidsWealth, which provides some great tools and materials for teaching young children about money and basic financial literacy. Although not a non-profit organization, their mainstay KidsWealth Money Kit is available for a very reasonable $39.95. Perhaps most notable about KidsWealth, though, is their willingness to bust myths about financial literacy. Their materials provide some very compelling reasons about why a piggy bank is a terrible way to teach kids about money (no one tell the AICPA!), and put forth the somewhat controversial idea that the best way to teach kids about money is to give them a material amount of responsibility for some money from a very early age. On the one hand, the thought of giving children a much larger allowance, and making them responsible for buying some of their own clothes seems shocking to some; on the other hand, if your kids are going to make mistakes with money while they learn about prudent spending, wouldn’t it be far better for them to do it while they’re still living at home and under parental guidance?!
Another very interesting program is MoneyU, which is seeking to deliver financial literacy education from a games-based approach that seeks to really engage students in the learning process. In a world where it is increasingly difficult to get kids to pay attention to anything for a sustained period of time, the programs at MoneyU are showing some real signs of promise, with some early efficacy studies already reflecting positive results.
Clearly, we are paying for our sins of weak financial literacy in the United States right now, between our national-level inability to save and the astronomical average amount of debt that a college student has at graduation. Ultimately, we all need to take part in the efforts to advance financial literacy if we’re going to improve the situation for the next generation!