Improving financial literacy…
Each year, the
National Financial Educators Council releases a National Financial Literacy Test, which is taken by
Americans of all ages, financial positions, and backgrounds. The test measures
participants’ knowledge as it pertains to earning, saving, and growing their
money.
As of 2020, the
average score of 15- to 18-year-olds who took the test stood at 68 percent,
just shy of a passing score. In fact, of the 60,813 people who have taken the
test since it began in 2015, only 59 percent received a passing score of 70
percent or higher. Additionally, the National Financial Educators Council also
released results which found that poor financial literacy contributed to Americans
losing an average of $1,634 each in 2020. That is a cost of about $415 billion
to the country at large.
Those numbers may
seem a tad apocalyptic, but there is a silver lining. Younger generations of
Americans appear willing and able to learn more about financial literacy. The
National Financial Educators Council asked 1,101 young adults ages 18 to 24
what high school-level course would have benefited their lives the most. The
majority (51.4 percent) responded with “money management.”
It appears financial
literacy classes really do help. The FINRA Investor Education Foundation's State Financial Education Mandates study found that Georgia,
Idaho and Texas all saw increased credit scores and lower delinquency rates on
credit cards three years after implementing a financial education mandate in
public schools. Additionally, all three states saw significant improvements in
participants’ scores on the National Financial Literacy Test with an overall 8
percent rise in score among 15- to 18-year-olds.
How to improve your financial literacy
April is Financial Literacy Month. Both a celebration and a challenge, this month is a chance for your members to reflect on the state of their personal finances and an opportunity to improve their financial well-being, one step at a time. Help your members along their financial literacy journey with some suggestions from Athene:
· Subscribe to financial newsletters – Financial newsletters from trusted sources can put free financial news in your inbox. To start, try Athene’s Smart Strategies, designed to help you take your financial journey to the next level with expert advice on finances and lifestyle.
·
Read personal finance books – Explore Insider’s17 best personal finance books for 2021 to get you
started.
·
Start keeping a budget – All the general financial know-how in the world will not mean much
if you do not know where your own money is going each month. Start tracking
your spending and set up a budget using a simple spreadsheet or
applications.
·
Talk to a
financial professional – Sometimes, you
just need to ask an expert. Financial professionals, like those at a local
credit union, can help you assess your current situation and help you stay on a
track that works best for you.