San Diego CA - Every month is financial literacy
month at the ICFE. Congress acted for the same reasons as
last year s declaration, it thinks Americans fall short
when it comes to financial know-how. The purpose is to
spotlight financial literacy. (This action came after
Congress just raised the debt ceiling to $9 trillion.)
Community events, such Financial Literacy Day Fairs, will
occur on April 25th nationwide. Much of the focus is on
young people and there are school events, some month long,
put on by financial, credit and debt educators and also
financial planning groups.
ICFE recognizes financial literacy month by making
available How to Teach Children About Money a short, 13
slide, PowerPoint Show. It is available, free, as a
download on Icfe.info. It also may be requested to be sent
as an email attachment. It is available year round. Also
on Icfe.info are two interactive quizzes. One is on
spending and the other is on overspending.
April 25th, 2006 is Financial Literacy Day in America.
According to the legislation passed by Congress (H-Res 737
in March and S-Res 410 in April), the resolution(s) sites
the following:
* Calls upon federal government agencies, states,
localities, schools, nonprofit organizations, businesses
and the citizens of the United States to observe the month
with appropriate programs and activities.
*The House resolution reflected the Financial and
Economic Literacy Caucus (FELC) established in February
2005. FELC was designed to highlight the public and
private sector best practices, and organize and promote
financial literacy legislation, seminars, and other
events.
(Congress also established the Financial Literacy
Commission in 2003 to coordinate the consumer outreach
efforts among the 48 different federal agencies who had an
office of financial education and who weren t talking to
each other. The commission is run the by Department of the
Treasury s office of financial education and their web
site is mymoney.gov. There are also competing efforts
springing up, some funded by regulatory fines.)
*Some 10 million households in the United States do not
use insured banks.
*A total of 75 million Americans remain credit challenged
and unbanked according to the Senate version.
*The personal savings rate in 2005 was -0.5 percent the
first time the rate has been negative since 1933.
*More than a third of workers, some 37 percent, say they
aren t saving for retirement.
These findings, along with others, are manifest even
though 49 of 50 states include the subject of economics in
elementary and secondary education and 38 include personal
finance, according to a 2004 study put out by the National
Council on Economic Education (ncee.net).
The Jump$tartCoalition for Personal Financial Literacy, a
Washington-based non-profit organization with 50 state
coalitions just released the findings of their biennial
national survey measuring the financial literacy levels
among some 5,775 high school students. There was virtually
no improvement between the 2003-2004 survey and the
2005-2006 survey. The survey was conducted by Lewis
Mandell, a professor of finance and managerial economics
at the The State University of New York at Buffalo School
of Management. Dr. Mandell said in a prepared statement
released with the survey Financial literacy is important
and we re not doing enough about it. For more details
visit jumpstartcoalition.org.
It is this writer s opinion their efforts are a bit out of
focus. Here is why: Everyday spending decisions especially
credit based ones, will do far more harm to your financial
future than any investment decision you will likely ever
make! If someone is spending everything and more than they
earn, where do they think someone is going to come up with
money save, much less money to invest?
For example, Robert Manning a research professor at the
Rochester (N.Y.) Institute of Finance recently was quoted
as saying You ve got to learn how to invest as soon as
possible, in your 20s and 30s. It is my contention if
parents wait that long to start nudging their kids towards
savings and investing, they will first have to undo 10 to
20 years of poor spending habits first.
National financial education efforts including those on
the internet are by and large void of any meaningful
spending education. Type the words improve spending into
Google and you will see ICFE stands alone among public
education organizations who advocate such. Type spending
techniques into Google and get a similar result. It
improves a bit when searching Google for financial
education in spending there are two nonprofits listed.
The ICFE s position is to be able to achieve a measurable
increase in the personal savings and investment rates
among American workers and also the increase percentage of
workers who are saving for retirement, they must first be
taught how to spend and how to avoid overspending, whether
the latter is done through the use of credit or by just
paying too much for things because of no comparison
shopping efforts.
Oh! And please do the ICFE a favor on financial literacy
day (really any day) and point someone to Icfe.info and in
particular the interactive spending quizzes. Thanks.