Over the years, reports from multiple organizations corroborate and point towards one stark reality- Americans are missing out on financial literacy. This makes an impact across the American quality of life, affecting citizens negatively. It is time to take action, and financial education for school students is a great place to start.
The Average American in Finance
Studies indicate the situation is really grave. A majority of Americans(53%) admit thinking about finance causes them anxiety, according to a 2018 FINRA report. People within the age group of 18 to 34 reported the highest level of stress and anxiety at 63% and 55% respectively. The current pandemic only made situations worse.
Other reports may provide different metrics, but the outcomes tell a similar story. A Federal Reserve report indicates 4 out of 10 US adults lack savings to cover a $400 emergency. The education sector is among the worst affected. Total student debts increased more than double to USD 1.71 trillion compared to a prior decade. Change needs to come, and fast.
The Need for Financial Literacy and Education
When asked to comment about the need for financial literacy, HashCash Consultants founder and CEO Raj Chowdhury responded over an email saying:
“Information is key to decision-making, implementation, finance, and subsequent success. Starting financial literacy programs are crucial for helping people make the right choices- be it in terms of investments, risk assessments, or personal finance.”
Student debts are officially a national crisis in the USA. Failing loan settlements have serious implications, particularly among the millennials at present. Lack of financial awareness results in several students foregoing graduate-level education. The long-term impact of defaulting is more severe with higher default rates, lower credit scores, net worth, job disqualification, fund seizure. To sum it up, student loans crush ambition and dreams- including the ones of owning a residence.
Financial education programs at school levels will make a positive impact on the American economy. The US, along with nations like Australia, Japan, Canada, and the UK have prioritized financial education. The fruits of this will arrive somewhere in the near future.
Leading the Way: Advocates of Financial Literacy
“Financial literacy equates to preparedness for the near future, there couldn’t be a better time than starting 3-4 years of entering adulthood,” says Chowdhury.
There has been a growing number of advocates championing financial literacy. Milestones have been achieved, and more people are rooting for access to the basics of financial education at the middle and high school levels. Previous reports demonstrate clear trends of declining financial literacy. The only solution was to bring forth financial education to the masses. Councils like the NFEC work towards promoting and providing the knowledge required for greater financial well-being.
The financial well-being of the average citizen contributes to the overall economy of a nation. Under a collective lens- crippling students’ debts, bad loans, or misinformed financial decisions does much more negatively impact single individuals. Financial literacy is the foundational solution and must be imparted right from the beginning.