Should we be concerned that Financial Literacy programs are not mandatory on the high school or college level?
Yes!
In general, Americans are not properly trained to manage their own money and we are certainly not receiving a grade of "A" for effort. According to a National Survey conducted by FINRA, Financial Industry Regulatory Authority when focusing on four main components, "Making Ends Meet", "Planning Ahead", "Managing Financial Products", and "Financial Knowledge and Decision Making" the results are alarming. Nearly half of the survey respondents reported facing difficulty in covering monthly expenses and paying bills, while the majority of respondents did not even have a "rainy day" fund set aside for unanticipated financial emergencies. The survey also shows that American adults, although we feel we are able to manage money, engage in financial behaviors that generate additional expenses and fee's. Additionally, we also show an inability to do basic interest calculation and other math orientated tasks.
Yikes!
So, the big question out there is "Why does this matter?" and of course, "What's in it for me?" The answer is in the evidence of what our economy has become and the new regulations passed on banking and credit cards. For those of you reading with student loans, it will matter more when you graduate and begin repaying your debt. However, if you don't possess the necessary skills to manage your money now, it will be quite difficult later making you more likely to miss payments, make late payments or even default. The idea is to equip you with the appropriate tools, putting them into practice now, so that you can manage your debt, budget your paycheck and be financially successful later. That is why teaching Money Management skills now is of the utmost importance.
Your Credit Score, good or bad along with debt to income will affect future purchases such as a car, house or even renting an apartment. These long term goals may be easy to forget in the present when classes take priority, but eventually the time will come and we hope you will be prepared.
As a result of the survey and just in general, Savvy Student is putting a call to action out on the web to our readers. What interests you about personal finance? What topics would you like covered and what will help you focus on being financial independent after Brandeis???
Please write back and help us tackle financial literacy at Brandeis.
Cheers!
Savvy Student
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