Here’s something that might shock you: Massachusetts is an abysmal failure when it comes to literacy in primary and secondary education.
I refer to financial literacy: budgeting, understanding debt and knowing the value of a dollar. In other words, learning early on how to live within ones means, the better to enjoy self-sufficiency throughout adulthood.
...while personal finance topics are included in the Bay State's educational guidelines, Massachusetts does not require local school districts to make them part of the curriculum.
Financial education may be one of the most important lessons that parents and educators can provide their children and students. Yet too often, these lessons get put off or ignored altogether. The consequences can last a lifetime.
Massachusetts is one of 11 states that received a failing grade in a recent study by Champlain College’s Center for Financial Literacy. The report studied all 50 states and their efforts to produce financially literate high school graduates.
Researchers found that, while personal finance topics are included in the state's educational guidelines, Massachusetts does not require local school districts to make them part of the curriculum. That means personal finance is an elective available only in certain districts.
Worse, there appears to be little or no momentum at the legislative level to force change. While there have been no shortage of bills proposed — 20 pieces of legislation filed since 2005 — not a single one has passed the Legislature.
How can this happen in a state that not only values education but has been an important center for financial services for close to half a century?
Massachusetts fares poorly compared with other states. Intellectual and cultural peers like New York, New Jersey, Illinois and Texas received grades of B on the Champlain College scale. Meanwhile, states that rank lower in overall education quality, like Mississippi and Kentucky, also outperformed the commonwealth on financial literacy, receiving C grades. And then there are the outliers: Tennessee, Louisiana and Georgia, to name a few, that received A grades.
To be fair, financial literacy is not only a public education problem. It’s a cultural value that needs to be instilled at the home, community and school levels.
A recent survey of budget-conscious consumers by American Consumer Credit Counseling (ACCC) found that just 15 percent of those surveyed said they didn’t begin learning anything about financial literacy before age 11. Sixty-five percent said they didn’t begin learning critical financial lessons until they were 16.
Perhaps most alarming: 75 percent in the ACCC poll said that today, in adulthood, they still lack education and understanding of investing and being prepared for retirement.
This is so in spite of the fact that tools and information about financial literacy abound. Budgeting, household economics, investing and retirement are some of the most popular areas of discussion in the general interest media.
This is good news for those who wish to develop a financial literacy curriculum; the resources are there. The real obstacles, then, are the apathy and passivity that have met proposals to mandate teaching financial literacy. That needs to change.
Parents can play a key role in effecting that change.
...financial literacy is not only a public education problem. It’s a cultural value that needs to be instilled at the home, community and school levels.
First, they must begin early at home coaching children in the basics of financial literacy, such as making a budget and sticking to it; using and misusing debt; and the importance of saving at an early age, so it becomes a lifelong habit.
Second, parents must become advocates for better financial literacy by calling on school districts to introduce or improve financial literacy curricula. This includes appealing to lawmakers to prioritize legislation mandating financial education.
Massachusetts should not be failing in this critical area of preparedness for our children. We can alter this course and better prepare future generations for a stable financial life.