Many Young Americans Lack Financial Education
How much does the average American know about their financial options? While there are many people who are able to manage their money effectively, there are also many people in our country who were never taught what financial decisions were right and which decisions could lead them down a dangerous path. The financial mistakes young people make today will affect the rest of their lives, but there is hope. People in their community could help improve financial literacy, and educating those in need would help improve their outcome.
Recent college graduates may be able to manage the loans and debt normally acquired by students if not for poor financial literacy. A recent study found that less than one third of young adults have the basic financial knowledge necessary to get out of this debt. They continue to borrow or make poor financial decisions (such as taking out payday or title loans) while getting themselves farther into debt.
Most of the students who find themselves in financial trouble are the children of adults in financial trouble. There are ways to stop this cycle, but they take the time and dedication of many. These are a few of the options available to those in their community to help students with little financial education.
Start financial education programs in high schools – If financial knowledge is typically acquired from parents or interactions with others, financial education in high schools could help prevent a financial crisis (particularly those high schools whose students have parents with no college education or proper financial knowledge). Also, it will most likely be beneficial for these students to gain financial knowledge before they need to make important financial decisions.
These programs or classes don’t necessarily need to be placed in high schools. Classes could start as soon as kindergarten. These programs could help children learn the true value of a dollar at an early age, and allow their financial knowledge to grow as they grow.
Provide financial programs for parents – Parental influences can still greatly affect students and young adults. Therefore, providing financial programs for these parents could potentially improve their knowledge and cause them to help their children make better financial decisions through proper financial advice.
These programs could be provided by community centers, local schools, or even be required by employers. Financial education is a process that must take place over a lifetime. Financial products and decisions change as technology and inflation impact the country. Requiring these classes could not only improve the lives of these parents, but it could also improve their productivity at work by reducing stress. Therefore, they will have a better chance of getting a raise or being promoted.
Set up a financial assistance hotline – Volunteers could reach out to students and other members of the community by providing a phone service for those in need of financial assistance. Hotlines have already been set up around the country and have proven to be successful. In 2009, the City University of New York (CUNY) along with the office of Mayor Michael Bloomberg created a week long phone bank to help citizens with financial empowerment. The hotline received over 9,000 calls and provided free money management advice and information about inexpensive financial education programs.
In order to improve financial literacy in this country, people in the community need to take small steps for struggling individuals in their area. If they are able to take these steps effectively, they may be able to break the cycle of poor financial decisions and improve the outcome of the nation’s future.
Vanessa Lang is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about online payday loans.
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