Fi­nan­cial lit­er­acy vi­tal for fu­ture gen­er­a­tions

Dur­ing Fi­nan­cial Lit­er­acy Month in April, we should all think about the skills stu­dents, young adults and even our re­turn­ing vet­er­ans need in or­der to have a suc­cess­ful fi­nan­cial fu­ture. Fi­nan­cial lit­er­ary pays valu­able div­i­dends for a life­time.

The News-Times - - OPINION - Ju­dith Corprew is ex­ec­u­tive vice pres­i­dent-chief com­pli­ance & risk of­fi­cer at Pa­triot Bank, with lo­ca­tions in Westch­ester, Fair­field and New Haven Coun­ties.

To­day, more than 44 mil­lion Amer­i­cans carry stu­dent loans with cu­mu­la­tive debt, to­tal­ing

$1.56 tril­lion. Ac­cord­ing to a 2018 study from the Rock­e­feller In­sti­tute of Gov­ern­ment this num­ber has in­creased 144 per­cent in the last 10 years.

That is an av­er­age of $35,454 for each of those in­di­vid­u­als — in many cases enough for a down pay­ment on a house or new car.

This is a re­minder that it is more im­por­tant than ever that young peo­ple be­come bet­ter at­tuned as to how to man­age debt and plan for their fu­ture, so that im­por­tant mile­stones like home­own­er­ship, buy­ing a car or be­ing able to open a re­tire­ment ac­count are not too far out of reach.

As a so­ci­ety, we need to place greater value in pro­vid­ing our youth with a stronger fi­nan­cial lit­er­acy foun­da­tion that will show them from an early age about sav­ing, re­duc­ing and manag­ing debts, and keep­ing ex­penses in check.

Dur­ing Fi­nan­cial Lit­er­acy Month in April, we should all think about the skills stu­dents, young adults and even our re­turn­ing vet­er­ans need in or­der to have a suc­cess­ful fi­nan­cial fu­ture. Fi­nan­cial lit­er­ary pays valu­able div­i­dends for a life­time.

Ac­cord­ing to a re­port from Vis­ual Cap­i­tal­ist, an as­tound­ing

76 per­cent of mil­len­ni­als — mem­bers of our com­mu­nity age

23 to 38 — lack ba­sic fi­nan­cial knowl­edge. Pos­si­bly this is be­cause only 16.4 per­cent of all U.S. stu­dents are even re­quired to take a per­sonal fi­nance course in high school or col­lege.

New York is ranked 12 out of

50 in fi­nan­cial lit­er­acy in. In the same study, Con­necti­cut ranks in the bot­tom half of U.S. states in fi­nan­cial lit­er­acy: 28 out of 50.

There are more than half a mil­lion pub­lic school stu­dents in Con­necti­cut but only 7 per­cent of its school dis­tricts re­quire their stu­dents to take a per­sonal fi­nance course. Cham­plain Col­lege’s Cen­ter for Fi­nan­cial Lit­er­acy gave Con­necti­cut a fail­ing grade in 2017, one of only 11 na­tion­wide.

In Jan­uary, New Jersey passed a new law re­quir­ing money man­age­ment lessons to start in mid­dle school, ef­fec­tive with the fall se­mes­ter. The only prob­lem is the New Jersey man­date was al­ready in place for many years, but had been ig­nored.

Lack­ing ed­u­ca­tion man­dates on these mat­ters, many young adults sim­ply never de­velop the fi­nan­cial knowl­edge they need. As a so­ci­ety, we truly ought to re­quire ev­ery young per­son to take course­work in fi­nan­cial lit­er­acy in all school dis­tricts for their own lifelong ben­e­fit.

Now, we are in a more com­plex world than ever, with debit and credit cards, spend­ing and re­ceiv­ing money though pay­ment apps such as Venmo, in­vest­ments in the stock mar­ket through on­line apps like Robin­hood, and on­line bud­get­ing through ser­vices such as Mint.

While the same lessons still ap­ply, younger gen­er­a­tions have more eas­ily ac­ces­si­ble ways to spend and ac­cu­mu­late debt with­out them ever see­ing pa­per money change hands, like sub­scrip­tion ser­vices and on­line shop­ping. By re­mov­ing phys­i­cal barriers to spend­ing such as these, peo­ple tend to be less cau­tious and more likely to lose con­trol of their fi­nances.

It is our re­spon­si­bil­ity as a so­ci­ety to see that ev­ery per­son is fi­nan­cially lit­er­ate. As com­mu­nity and busi­ness leaders, adults, ed­u­ca­tors and par­ents, we share a re­spon­si­bil­ity to pre­pare the next gen­er­a­tion to en­joy the full bless­ings of Amer­i­can life.

That starts with help­ing them learn skills to­day on how to make the de­ci­sions to­mor­row that al­low them to gain an af­ford­able higher ed­u­ca­tion, pur­chase a fam­ily home, pur­sue a small busi­ness dream and some­day be able to af­ford re­tire­ment.

Donna Grethen

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