Considering taxes are due in April, it makes sense that it would be Financial Literacy Month. With that focus on finances comes plenty of chances for people to learn how to budget, responsible credit card use, investing money, and paying for college with student loans. The problem is that there’s far too many people who have little financial literacy, and a one or two-hour class isn’t going to get them up to speed.
How much of a problem is financial literacy? The Financial Industry Regulatory Authority (FINRA) found in a 2012 survey that only 39 percent of 25,509 adults got at least four questions correct on a five-question quiz about financial topics, which included mortgages, investments, and interest calculations.
The good news is that there are quite a few programs out there designed to help people learn about financial issues. These include Jump$tart, the FINRA Investor Education Fund, the National Endowment for Financial Education, and Credit Abuse Resistance Education (CARE).
CARE, in particular, is aimed at teaching those in high school and college about how credit cards work and the hidden costs. John Ninfo, a U.S. bankruptcy judge, founded the program in 2002 because he kept seeing young adults in bankruptcy court who couldn’t get out from their credit card debt. Many other bankruptcy judges, practitioners, and financial companies are now part of the program. Since the program began, the laws regarding credit cards have changed, most drastically in 2009, and card issuers need to disclose those formerly hidden costs upfront. Still, CARE volunteers go across the nation to speak to young adults about managing their finances and avoiding common traps.
These volunteers typically speak for an hour or two, which is enough time to provide an overview of finances, but not nearly enough for full financial literacy. And while credit card regulations have changed, other types of loans have taken their place. Student loans have become the largest source of debt in the country, and payday loans have also trapped many Americans in a vicious cycle of debt.
One way states have gotten involved is by making financial literacy courses part of their school curriculum, even starting as early as elementary school. States that have done so include Alabama, Missouri, Tennessee, Virginia, and Utah. Florida may also be poised to start requiring financial literacy courses. Senator Dorothy Hukill has introduced legislation aimed at making financial literacy courses a graduation requirement. BMG Money – a responsible lender – offers credit education on their website.
Young adults aren’t the only ones that need help. Senior citizens can also have trouble budgeting, and there are many financial scams that focus on the elderly, since they’re seen as more vulnerable. One public outreach committee focused on helping seniors is the ElderCARE program, which is provided by the National Conference of Bankruptcy Judges. In Florida, there is already an ElderCARE program aimed at stopping nursing home abuse, so this program is instead known as Elder$mart$. You can get a head start on credit education at Balance Pro, a free financial resource site – and remember that financial literacy is a year-round goal.