Research of the Week: Getting Schooled in Financial Literacy
If personal finance class isn’t in session yet where you live, it should be.
Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…
The interesting study
April is National Financial Literacy Month, and while we think everyone should focus on financial literacy year-round, we also appreciate having a month every spring where people really focus on building their financial savvy.
So in honor of Financial Literacy Month, we’re focusing today’s research of the week on a some of the financial literacy related studies that have been published this month. We’re focusing on a Financial Literacy Poll from RBC Wealth Management-U.S. and a survey of K-12 teachers from PricewaterhouseCoopers.
The big result
According to the RBC poll, 87% of Americans believe financial literacy should be taught in schools because it’s a necessary life skill that many Americans are lacking. By contrast from the K-12 survey, only 12% of teachers provide financial education as part of their classroom curriculum.
The fascinating details
The RBC poll does provide some encouraging results in that the younger you are, the more likely it is that your parents and your school system provided some form of financial education. So while 41% of those over age 55 say they had to teach themselves, 29% of Millennials age 18-34 received financial education from their parents, while 21% received formal financial education in school.
The RBC survey also asked parents how well they thought they were preparing their children for financial independence and success. Most parents (83%) with children over the age of 16 believe they have done “very well” at preparing their children to become good money managers. In fact, over one in four parents (28%) believe that they are doing a good job of preparing their children by the time the kids are age 5-10.
On the other hand, the k-12 teacher survey points to a need in our school systems to provide support for teachers who want to include personal finance and basic money management as part of their class curriculum. So while 92% of teachers surveyed believe personal finance should be taught in school, only 31% of teachers say they feel comfortable teaching about it and only 39% of teachers say the curriculum was provided by their school district.
Luckily in caring so much for their students’ futures, teachers are finding other ways to get worthwhile and meaningful financial education lesson plans in other ways. So 64% of teachers used free online resources like Jumpstart.org, while 46% collaborated with their peers.
What you can do
Our best advice resembles the safety instructions for oxygen masks on airplanes: Help yourself by improving your own financial knowledge and then help any children around you.
“Parents may not be taking the time to teach children finance because they fear they may not be able to answer the endless stream of ‘Why?’ that children – especially young children may ask,” asserts April Lewis-Parks, Community Education Director at Consolidated Credit. “There’s also the stigma of keeping children separate and isolated from the parent’s own financial situation and the challenges they may be facing.”
In other words, a lack of personal understanding paired with a need to keep children protected from financial difficulties that may be affecting the family can stop parents from starting key conversations about finance.
“Too often parents miss opportunities for financial teaching moments with their children,” Lewis-Parks explains, “but involving your children in the everyday money management in your household – from paying bills to reviewing credit card statements can go a long way in giving them the financial knowledge base that you didn’t get as a child and had to build yourself. Children can learn from your mistakes so they don’t make them later.”
If you need help building your financial knowledge and don’t know where to start, take Consolidated Credit’s 20-question Financial Literacy Test to see what you know and where you need a knowledge-boost. You can also access a range of free financial education resources through our Debt Learning Center.