“One positive that came
out of the pandemic is the spotlight on personal finance as an important lifelong
skill for everyone,” said respondent Marie Burns a financial advocate. “Now more states than ever are proposing
legislation to teach financial literacy in schools.” Once again, our survey respondents
felt K-12 schools could make a bigger impact on America’s financial literacy
than any other institution in our society.
But who knows how to teach financial literacy?
As a result of the school system’s lack
of modernization, survey co-author Valentino Sabuco, Executive Director of
The Financial
Awareness Foundation, said experts who teach financial literacy are few
and far between. “Many teachers unfortunately lack the knowledge themselves on
financial literacy,” said Sabuco. “They are ill prepared to teach it to the
next generation of students. For those that say they are teaching personal
finance, we ask them: ‘Are your materials up to date? Are you touching all the
bases?” More often than not, the answer is NO, lamented Sabuco.
Jim Stovall, motivational
speaker and author of Millionaire Map told us
that there is more information than ever about financial awareness, but we are bombarded
with confusing, mixed messages as not all information is accurate and valid. “It’s
not a matter of getting information, it’s a matter of getting the right
information,” said Stovall.
According to Sabuco,
many educators believe financial literacy only deals with savings, budgeting
and debt management. They don’t address ways to help students get and stay
organized, establish personal and financial goals, save for college or plan for
other major expenditures such as cars and house down-payments. “So how do
financially illiterate teachers successfully teach personal finance to
students?” asked Sabuco.
Dr. Guy Baker, CFP, Ph. D, founder of
Wealth Teams Alliance in Irvine, California told me quite simply that most
Americans are financially illiterate. “A home economics course should be a core
class for high schoolers,” said Baker. “It needs to teach students how to bank,
how to save, how to invest and how to use a credit card.” Baker said it should
teach them about buying a home vs. renting, buying a car. In other words, “All
of the essentials responsibilities that are required to live a productive life.”
Dr. Christopher Sparks, Ph. D, of Academic Investment Management thinks there may be too many constraints
on public schools to teach financial literacy effectively and that colleges and
universities, may be better equipped. He’d also like to see financial advisors
more involved with teaching financial literacy to the masses, but they tend to target
those with significant investable assets. “Those who don’t have much to invest
are largely ignored,” Sparks observed.
The simple answer to this complex question, said Sabuco, is to provide
our youth with the “necessary life skills and problem-solving skills to have the
best chance of living a successful life, without outliving their wealth.”
Many of these topics, said Sabuco, are built around the financial elements identified on The FA Infinity Lifelong Learning Symbol shown below:
“If all the allied professions (attorneys, CPAs, financial planners, insurance consultants, etc.) took a collaborative and holistic approach, consumers would hear a similar message from several different perspectives and would be more likely to hear the message and act on it,” said attorney Martin M. Shenkman.
Lionel Shipman, a financial and life empowerment professional, told us that financial
literacy education should start as early as elementary school. “As children
continue their education through middle and high school, their knowledge and
experience of financial literacy skills can be broadened and strengthen,
preparing them to succeed financially in adulthood,” added Shipman. Ryan
Vogel, CFP, Partner, Chief Planning Officer, Novi Wealth in Princeton, New
Jersey, agreed. Even among schools that do have financial literacy requirements,
Vogel said teaching good lifelong money habits should be part of ongoing
curriculum, not a one-off required course like health or driver’s ed.
“In addition to teaching it in
high school, there should be a more basic version taught in middle school and
some type of financial literacy curriculum in 4th or 5th grade to get them
started on the right path,” suggested Vogel.
Conclusion
Bottom line: Everyone from early childhood educators to high schools and
university instructors, financial advisors, spiritual advisors and most
importantly, parents setting a good example for their children, need to do
their part. “We must change the system to help all children from a very young
age to develop the financial literacy skill so that it will be part of their lifelong
DNA,” said survey respondent Elena Zee, President & CEO Arizona
Council of Economic Education (ACEE). Curing the financial illiteracy epidemic
in this country takes a village. Are you willing to step up?
Don’t agree? Tell me why.
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TAGS: #financialliteracy, #financialawareness, #financialeducation,
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