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Financial LiteracyFinancial Literacy in the US is terrible.
Basic Financial Literacy Statistics prove out this point all too well. There are three key elements to shifting this current Titanic of financial insanity in this country. First, financial education needs to start extremely early. It needs to be taught from when children start school. Parents have a personal responsibility and so do the public schools to teach our youth this powerful skill. What is the use of getting an excellent education including advanced degrees if a person isn’t able to handle their finances? Many young individuals haven’t even learned how to balance their check book late in their teen years. Teaching financial education from kindergarten up is crucial for true change in the way our population handles money. By the time a student is in their teenage years they are already starting to form strong opinions about money and its uses. If they have not been taught money’s value from an early age, many never learn its worth. Some live a life of excessive debt, stress and anguish. They don’t know how or why they can’t make enough or keep what they have. Attempting to keep up with the Jones can create some serious financial problems. Second, adults need financial education. Besides teaching our young we also need to teach many adults about the proper uses of money. This includes the problems with debt, the importance of saving for retirement and everything in between. This includes the problems with debt, the importance of saving for retirement and everything in between. Many adults were never taught sound money management when they were young and are now paying the price. When teaching adults financial responsibility, they need to be encouraged to pass this important information on to their young. Then this teaching becomes a double benefit! The importance of teaching of fiscal responsibility for both adults and children is clear. The good news is that there are a wealth of resources and programs, but they need be used and understood to be effective.
And finally, apply Financial Behavior Modification It is an essential part of the equation when teaching financial knowledge. Many people will revert back to what they are most comfortable with if their behavior is truly not modified. This key element of behavior modification is sorely lacking in most financial education programs as evidenced by the dismal financial state of the country. In other words, for financial education to occur, not only must a person be supplied the knowledge of financial literacy. They must also change their attitude and mindset towards money. Otherwise they will quickly shift back into their own poor spending and investing habits. So there it is, the three keys to improving the money management in this country. 1. Teach our young financial responsibility. Make a concerted effort to teach our young financial literacy in both the schools and at home. 2. Teach our adults Financial Behavior Modification Continue providing programs for teaching adults and encourage them to pass this information on to their young. 3. Incorporate Financial Behavior Modification into all financial literacy programs. Ensure that programs that teach financial education also include behavior modification techniques to ensure the knowledge is applied. There is no Pollyannaish answer here. There needs to be a lot of hard work, commitment by teachers, parents and students (young and not so young). With these attributes plus a malleable mindset we can become much more financially literate in this country.
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