How financial literacy is critical to growth
If we expand access to financial literacy among teens and adults, more Americans will be prepared to spend responsibly, avoid defaulting on loans, save for retirement
It is no secret the pandemic revealed several vulnerabilities within America, among the most critical is financial literacy.
Low financial literacy is often behind underlying issues hurting families who live paycheck to paycheck, and over the past year, people’s livelihoods were turned upside down with the sudden lack of work, inability to pay bills and uncertainty of government assistance.
A lack of financial literacy, coupled with other challenges brought on by COVID-19, put thousands of families in deeper debt and prolonged money issues.
Lack of financial knowledge
In 2018, the Council for Economic Education reported only 17 states, including Tennessee, require high schoolers to take a course in personal finance. Yet, according to the U.S. Financial Literacy and Education Commission, only one-third of adults were able to answer at least four out of five questions on fundamental financial topics such as loans and long-term planning.
Lower financial literacy among Americans
can exacerbate the widening wealth gap and poverty growth rate in this country.
Those who are not financially literate tend to have lower credit scores, thus having trouble obtaining loans for education, a home or car, as well as paying off piles of credit card debt. It is a difficult cycle to break without support and resources from trusted organizations.
If we expand access to financial literacy among teens and adults, more Americans will be prepared to spend responsibly, avoid defaulting on loans, save for retirement and build financial security for their families.
April is Financial Literacy Month and the perfect opportunity for adults to gain a stronger understanding of their finances, both for today and for the long term.
It is also the perfect time for parents to teach their children, even as young as kindergarteners, the importance of building a strong foundation to prepare themselves for financial independence down the road.
This is just one area where Memphis Public Libraries wants to step in and serve the Memphis community.
How the community is helping in this cause
In April, the library has set up several opportunities to help teens and adults learn good financial principles and about the tools and resources available to them.
First, the library is hosting a series of free virtual courses to enhance financial literacy among adults, including during the national Money Smart Week from April 10-17. The programs will touch on topics including budgeting expenses, restoring credit, creating generational wealth, and establishing life insurance and wills.
Those interested can view the calendar of courses and attend the live stream for free at memphislibrary.org/ learn/personal-finance/. Additionally, throughout the month of April, each branch of the Memphis Public Libraries will have free displays and literature on financial education for visitors to take home.
In my years of banking, I have had the pleasure of working with individuals who knew they wanted the dream of homeownership and better credit options. I worked with a married couple to get them approved for their first home. In talking with them, I discovered that their annual tax refund was used to buy games, phones, incidentals and clothes. None of it was being saved.
I challenged them to open bank accounts for their children and begin the process of helping their children understand money and credit. They are now one of many success stories that can be ascribed to financial literacy.
The children have continually saved money and those bling items that once seemed so important have now been replaced with the confidence of knowing that they have bank accounts and future income for college.
Financial literacy education may only be one piece of reducing poverty, income inequality and debt in our country, but Memphis Public Libraries is ready to help.
By expanding our community members’ literacy in finances today, we can also set up the next generation for future success and give them the confidence and independence to start businesses, build financial portfolios and support their families.
I encourage all Memphians to reach out to those around you in need of financial literacy support and help them if possible. Point them to the library’s upcoming opportunities and we’ll be ready to assist.
This is an issue we can’t afford to let slide and it begins with education and increased access to resources.
Gerre Currie serves as Vice President of Community Development for Financial Federal Bank in Memphis. She serves as a board member of the Memphis Library Foundation and as secretary of the Memphis Area Community Reinvestment Act Association.