Financial Literacy Month

Each year April is dedicated to Financial Literacy Month here in the United States. It has been officially recognized since 2003. Fifteen years into the initiative how are we doing? Well, according to a recent national financial literacy test conducted in 2017 by the National Financial Educators Council only 48% of the 17,000 participants received a passing grade. Seven in 10 seniors (69%) who graduated from public and nonprofit colleges in 2014 had student loan debt, with an average of $28,950 per borrower.

I could share various data points from a number of sources all day, to make the point that American’s as a whole lack financial education. The real question is how did we get to this point? Currently, only seventeen states require students to take a high school course in personal finances, and only twenty to take a course in economics. Of the seventeen schools that require the course, only five provide it as a stand-alone class.

Data shows that those students in the seventeen states where a personal finance course was required display positive financial behaviors, including being more likely to save, pay credit cards in full each month, and manage money better later in life.

So if data shows we are behind in our financial education, and financial education, in fact, does positively impact individuals, why aren’t we doing more of it?

Change Takes Time

I don’t have any statics to share on this point, but do have real-life experience to back up that change takes time. Evey try to institute a change at home or in the office? How do people react to it?

A good percentage typically react negatively. People just don’t like doing things differently than they always have. When it comes to our big education system, think about schools making a change like adding a financial literacy class to their curriculum. It might be easier to turn the Titanic around.

I’ve been working for the past four years with my local school district, a slightly large one who educates close to six thousand students a year. It took three years working with a committee, the superintendent and the board of education directly to get a small financial literacy program off the ground.

Managing money is a life skill plain and simple. It’s something we begin doing early in life and use until we die. Our education system needs to make a shift from memorizing history facts and multiplication tables and start teaching life-long literacies, like managing money.

Getting Involved

To tell it to you bluntly, I was a money moron until age forty, but after a rock-bottom moment, I realized there had to be a better way to handle my money. After self-educating myself on the topic, and working together with my wife, we built a plan to repay our $109,000 worth of debt.

Our next challenge was to prepare our three children for their financial lives. We involved them in our money discussion, showed them our budget and began talking about money at the dinner table.

After a few years, I felt confident enough to begin helping others. It started with family and friends. After we became debt free in 2014, I began to look for other opportunities. I wanted anyone and everyone to have the same success we had with our money. I quickly realize our three children were not being taught any personal finance basics in school.

Why not approach their school? So that’s what I did. That began a relationship that turned into a financial literacy program for grade K-12. It took lots of hard work and followed up, but well worth the effort to think of the potential outcome and impact.

I also looked into sharing our “Get Out Of Debt” story. I recalled how powerful hearing others perform their debt-free screams on Dave Ramsey show, and how motivating it was to me when we were paying off debt.

I wonder if sharing my family’s story with money and debt might do the same for others. After several talks over the last few years, I have shared our story with hundreds of people who are in over 1.5 million dollars worth of debt. It’s clear to me that financial education is needed, both for young students and adults.

If you are someone struggle to gain control over your finances there are plenty of resources available to begin to increase your knowledge on the subject or consider these basic steps:

• Realize you need help
• Define a “Why”
• Build a plan (budget)
• Communicate and agree to the plan (Budget)
• Stop building new debt
• Place expenses into “wants” verse “needs” buckets
• Build an emergency fund (cash savings)
• Pick Debt Payoff method/Track progress / stay motivated
• Build Wealth

If you are someone who has a firm handle on your money, how are you helping others? What can you do to spread your knowledge on the topic to your children, family members, a neighbor? April’s Financial literacy month is as good as any time to start.

If you need help getting started, please reach out. Over the next few weeks, I’m dedicating this blog to all thing financial literacy. I have some great guest posts and interview scheduled. We dive deep into the financial literacy topic, who responsible for teaching it, and hear how some first became financial literate. I am hopeful this information will be helpful.

Please consider sharing this post and all other this month using the hashtag, #FLM2018.