Is the Financial Literacy Movement Working?

Financial Literacy MonthApril is financial literacy month, as so named by Congress in 2004. I have personally witnessed more and more exposure of financial education over the last five years that I have been actively been involved.  Banks now have programs geared towards personal finances and financial education, 401k providers are including modules, and not to mention the numerous amounts of websites and blogs dispensing information.  I may be biased because I am very close to the situation, but financial education is everywhere.  But is it working?

Let’s be clear, I am an advocate of financial literacy education.  It is needed.  If we collectively manage our resources better, we can improve our own lives, families, and communities.   I know the old adage says:  money basics are taught in the home. Yes, that is our first school.  Unfortunately, for many households and throughout many generations, money was a taboo subject, not only wasn’t it taught, it wasn’t even discussed, period.  These early experiences with money shaped our attitudes, behaviors, and habits, unconsciously. The root was formed.  Everyone learned about money at home, for many however, it was an unspoken lesson.  

To further the point, if you were taught money basics at home, the climate has changed.  Finances are more complicated now.  There are so many products and decisions for consumers, the Government had to create consumer watchdog agencies to protect us.

Every year in April, the National Foundation for Credit Counseling (NFCC) releases the annual Consumer Financial Literacy Survey.  Some key findings include:

  • Only 39% surveyed says that they have a budget and keep close ties on their money.
  • The percentage that says that they are spending less is down from 57% at the height of the economic downturn to 29% in 2014.
  • 39% of households do not save any portion of their income towards retirement.
  • About one in three (34%) indicated that their household carry card debt from month to month, a proportion that has steadily declined since 2009 (44%), when the question was first asked.
  • Most adults have not reviewed their credit score (60%) or credit score (65%).
  • 60% of the participants give themselves an A or B, when it comes to personal finance; but at the same time four out of five (roughly 73%) said they could benefit from advice and answers to everyday financial questions from a professional.

With the exception of reduced spending and debt at the peak and fallout of the recession, the results have remained constant.  So, is the effort to help Americans become fiscally responsible working?   There are some in Washington that are beginning to say that it is not working and doubting the initiatives.  I disagree.  The concentrated national awareness campaigns for financial education rollout over the last five years ago.  Five years is a short time to reverse generations of attitudes, behaviors, and habits.

To the contrary, the financial literacy movement is just picking up steam!  Money Smart Week (April 2nd – April 12th) expanded from a cluster twelve states to nearly forty states in 2014.  Money Smart Week is a national campaign to provide consumers with the information and tools to better manage their personal finances and to get on the road to financial freedom.  It is a collaborative and coordinated effort of organizations across the country including businesses, financial institutions, schools, libraries, not for profits, government agencies and the media.  National partnerships with the American Library Association and the Financial Planners Association have increased the efforts and accelerated its growth. 

Fast forward five years later, now we have to shoulder our share of the responsibility.  If we didn’t know better before, there are no excuses now.  There are plenty of programs, books, and resources available.  Increasing our financial IQ should be a year round commitment and not just a one month activity.   If we know better, we do better.

Samirian HillSamirian Hill is the President and Founder of BudgetWise Financial Solutions, LLC, a financial education and consulting firm.  We are financial literacy advocates and national partners for Money Smart Week.   To schedule a complimentary consultation or a seminar or workshop for your event or organization, contact us at 248-905-1625 or go to www.budgetwisefinancial.com

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