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?