WHERE FINANCIAL EDUCATION HAS THE GREATEST IMPACT

by PaymentsJournal 0

Latest News

Schools, Parents Bear Equal Responsibility

DENVER—Aprilis Financial Literacy Month and for the next few weeks attention will focus onthe role financial education plays in creating economic well-being. Accordingto a new survey from the NationalEndowment for Financial Education® (NEFE®) in partnership with RightAbout Money, three in four (74 percent) Americans believe financialinstruction in K-12 schools gets the best results in building financialwell-being—particularly in high schools (68 percent). Less than half (43percent) of adults feel teaching financial skills is most effective coming fromparents. The survey was conducted online among more than 2,000 U.S. adults byHarris Poll.

“In a perfectworld every child would have access to lessons about managing money, but it’snot reasonable to assume that all youth will be exposed to this importanteducation before they leave school,” says Billy Hensley, Ph.D., senior directorof education with NEFE. “We have to ensure young people become financiallycapable as adults. To truly make a difference, financial education must startin the home and then be reinforced in schools. Everyone has responsibility inthis process.”

Despite thebest efforts of the education community, the reality is only a fortunate fewyouth are receiving financial education in school. Less than half of states(22) have a requirement in place where a high school course in financialeducation must be offered, and just seven states have adopted standardizedtesting specifications, according to the Jump$tart Coalition for PersonalFinancial Literacy and the Council for Economic Education.

“There arerandom acts of success where states have implemented effective programs, but wereally need more schools to step up and require personal finance instruction aspart of their curricula,” says Hensley. “And this isn’t just a one-timeoffering. Parents, schools, employers and community organizations all need toprovide better access to educational resources throughout a person’s economiclifetime.”

According tothe NEFE-Right About Money survey, 31 percent of adults say financial educationpresented through community centers would offer the best results in improvingfinancial well-being—just one in four adults think the workplace is theappropriate setting.

“Most thinkfinancial education works best with young people in schools, as opposed to withall ages at work,” says Dan Kadlec, founder of Right About Money, a mediacompany pioneering coverage of financial literacy issues. “Yet schools arehaving a difficult time making personal financial instruction a core subject,or even an elective, while big companies are embracing and expanding financialwellness programs at a rapid clip. These workplace programs are relatively newand I expect them to become more widely valued in time.”

The surveyfinds Americans believe financial education provides many benefits. Nearly halfof adults (47 percent) believe financial literacy is most helpful in stayingout of debt. Roughly two in five believe financial literacy helps with managingcredit (39 percent), sticking to a budget (38 percent), or planning forretirement (37 percent).

“We mustimprove educational interventions. We have to empower educators with the tools,training and encouragement to overcome reservations about teaching money,” saysHensley. “We need to present financial education when it matters, ensure thatit fits the needs of diverse audiences, and that it comes from vetted programmaterials from trusted, unbiased sources. As a community we also need to showevidence of impact. Are we really affecting behavior change?”

Survey Methodology

The survey was conducted onlinewithin the U.S. by Harris Poll on behalf of the National Endowment forFinancial Education and Right About Money from March 17-21, 2017, among 2,173U.S. adults aged 18 and older. Data were weighted using propensity score weightingto be representative of the total U.S. adult population on the basis of region,age within gender, education, household income, race/ethnicity, and propensityto be online. This online survey is not based on a probability sample andtherefore no estimate of theoretical sampling error can be calculated. Forcomplete survey methodology, including weighting variables, contact pdg@nefe.org.

About the National Endowment forFinancial Education

NEFE is an independent nonprofitorganization committed to educating Americans about personal finance andempowering them to make positive and sound decisions to reach financial goals.For more information, visit www.nefe.org.

About Right About Money

Right About Money is a mediaplatform focused on the global effort to raise the financial know-how ofindividuals and promote financial wellness on a broad scale. Our goal is toinform thought leaders and those in the trenches of financial education abouttrends and best practices, and to advance their understanding of what worksbest and how to move more quickly towards a comprehensive solution. We offer a freeemail report with original daily content that presents our take onfinancial literacy news and events around the world. For more information,visit www.rightaboutmoney.com.