With financial literacy month quickly approaching this April, improving the financial literacy of Americans has become a top priority for consumers, legislators and advocacy groups alike.
Consumers Want to Improve Their Financial Literacy
An overwhelming 94% of Americans want to do a better job managing their money in the new year, revealed a survey conducted by ING DIRECT. ING ran the survey in order to get a closer glimpse into the attitudes and behaviors of consumers towards their money. The survey also showed that of four categories–Excellent, Good, Basic or Poor–62% of Americans feel they have a ‘basic’ financial literacy level. Finally, while 97% of American respondents recognize the value in saving early for retirement just 53% actually put this value into action.
An Education in Personal Finances
Initiatives have sprung up across the country to assist American consumers of all ages with making better financial decisions in many different financial areas. One of Gov. Andrew Cuomo’s last acts as New York State Attorney General was a plan to create a national student loan center with a 24-hour national hotline and website to aid both students and parents make informed decisions when financing higher education. The center will be funded through a $13 million settlement received by the state from 28 colleges and 22 lenders found to have engaged in biased and deceptive marketing tactics at the expense of their students. The New York State Higher Education Services Corporation and the New York Public Interest Research Group will be awarded the funds to create the center.
Recap: A similar program was launched in June of 2010 for three New York City-area high schools. Read about the Capital One Banking Program.
Testimony provided by Cuomo to the U.S. House of Representatives Committee on Higher Education and Labor in 2007 indicated some financial aid officers held stock with student lenders and had a financial interest in pushing students towards higher risk loans, or were offered gifts and other kickbacks in exchange for suggesting their loan products to students.
HESC spokewoman Kathy Crowder said the center would be formed six months after a contract officially granting the organization its award was signed. She clarified that the call center was “not a financial literacy training tool” and “would help guide students towards resources available to them.”
A similar undertaking is occurring in Vermont. Champlain College announced in December that it raised $188,500 toward the launch of a new center designed to develop financial literacy skills in K-12 students, college students, teachers and adults.
“The Great Recession demonstrated that our citizens struggle when making complex financial decisions that are critical to their well being” said the college’s Director of the Center for Financial Literacy John Pelletier of Stowe at the time. “Some of our economic problems were created by bad actors, focused on personal gain, but so many others were created by good people making poorly informed personal financial decisions.”
It’s Never Too Early
As initiatives undertaken by Champlain College show, it’s never too early to learn how to take charge of your finances. ”
“Many personal finance concepts can and should be taught at an early age–saving for a ‘rainy day,’ delaying gratification, setting savings goals to get things kids want, and more” said David Casserly, Deputy Director for Washington, D.C.-based nonprofit The Jump$tart Coalition for Personal Financial Literacy. Casserly’s organization partners with Money Savvy Generation, which created an entire personal finance curriculum for preschool students now used in 27 school districts across the country.
How do you think you rate in terms of your financial literacy?