National Financial Literacy Awareness Month

Spotlight on National Financial Literacy Awareness Month:  Reading, ‘Riting, ‘Rithmatic, and the ‘Real World

The new American mantra seems to be spend more money than you make.  As a nation, our lack of savings and overspending are as apparent as our lack of mainstream financial education. 

Gary Stern with the Federal Reserve Bank of Minneapolis and Chairman of the National Council on Economic Education questions what happens to those of us who begin our adult lives without economic and financial literacy?  His conclusion is similar to that of the federal Commission of Financial Literacy and Education.  We fail to adequately save and invest.  Our credit cards turn into unmanageable debt and bankruptcy.  We make poor purchasing decisions.  We fail to calculate the real cost of products and services.  We are ignorant as to how public policy affects our pocketbooks. 

In 2003, Congress brought together a federal commission to address these issues.  Twenty federal agencies make up the Commission.  Three years of meetings resulted in a strategic plan which sets forth the national commitment to financial literacy initiatives and the designation of April as Financial Literacy Month. 

Identifying and overcoming these challenges is the goal of National Financial Literacy Month.  Trends we’ve seen locally mirror the national trends.  Some that cause the most concern are:

• Increase in per capita debt.
• Negative rate of per capita savings.
• Increase in mortgage default, mainly in the sub-prime market.
• Increase in the number of predatory lenders.  Predatory lenders are commonly defined as lenders deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against.  Although predatory lenders are most likely to target the less educated, racial minorities and the elderly, victims of predatory lending are represented across all demographics.  These include deferred deposit check cashing, title loans, and payday loans.
• Decrease in investments.
• Low wages.

Turning these indicators around will take a targeted strategic national plan as well as local level planning.  Currently, several local groups are working on the same strategies as the national Commission:  building public awareness of available resources; developing tailored, targeted materials and disseminating them; tapping into public-private and private-private partnerships; and research and evaluation of financial education. 

One such local public-private partnership developed to address the lack of financial education in Montana’s public schools is an initiative by the Montana Department of Education and Consumer Credit Counseling Service (CCCS).  The initiative brings financial education into mainstream classes. Incorporating personal financial planning into the existing curriculum through financial lesson plans. 

At the regional level, grassroots organizations are responding to the demand for financial planning and awareness.  CCCS seeks out opportunities and outside funding through grants to provide financial education in Montana and the surrounding region creating public awareness.   

What we can do now for National Financial Literacy Month is to support local programs and build awareness about financial education opportunities.  Grassroots efforts of public and private collaboration seem to be the most practical solution to increasing consumer financial literacy in Montana.  Consumer Credit Counseling Service is taking the lead in offering financial education during Financial Literacy Month by providing the following: 

Dollars and Sense is a four part series offered free to the public.  Topics include credit and debt, budgeting, predatory lending, insurance, identity theft, financial institutions, and taxes.

Rural High School Graduate Financial Education is offered in rural high schools for graduating seniors to assist them with financial skills as they move into college or the workforce. 

First Time Homebuyer classes in conjunction with Neighborhood Housing Service. 

Media including newspaper articles, informative newsletter, radio public service announcements, and TV informational spots.

Consumer Credit Counseling Services’ mission is to provide programs and develop partnerships to help youth, individuals, and families in achieving economic independence.  Throughout April many partners will help provide this invaluable education, including:  The Montana Women’s Foundation, United Way, Neighborhood Housing Service, numerous banks and credit unions, the Montana Credit Union Network, and others. 

As Mr. Stern proposes we all need to work together to elevate personal finance to be the fourth “R” in education:  Reading, ‘Riting, ‘Rithmetic, and the Real World. 

Check back for additional articles and resources.

© 2006, Consumer Credit Counseling Service

Disclaimer • Privacy Information