Financial Literacy Month

National Financial Literacy Month is recognized in the United States in April in an effort to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits. [Footnote 1]

In 2000, The Jump$tart Coalition for Personal Financial Literacy began promoting April as Financial Literacy for Youth Month and in 2003 the United States Congress showed its support. Senate Resolution 48 and House Resolution 127 asked President George W. Bush to declare April as Financial Literacy for Youth Month. At that time, governors of eight states had already named the month of April as such. [Footnote 2]

The year after Senate Resolution 48 and H Resolution 127 passed, further action was taken to designate April as National Financial Literacy Month to improve Americans’ financial and economic knowledge. April was named National Financial Literacy Month by the passing of Senate Resolution 316 with unanimous consent, championed by Daniel Akaka D-HI. [Footnote 3]

Many of the country’s financial institutions and nonprofit financial educational organizations and promote the month by holding promotional events and creating educational materials that center around effectively handling money and dealing with debt.

Educational initiatives

[http://www.financialliteracymonth.com FinancialLiteracyMonth.com]

Money Management International, the nation’s largest nonprofit credit and debt counseling firm, created a microsite to support the mission of National Financial Literacy Month. The site provides readers with a step by step process for improving financial wellness.

The 30 steps, one for each day of April, provide a roadmap to improving finances, and cover everything from creating a spending plan and distinguishing between financial wants and needs to simplifying your portfolio and reducing the amount of financial risk in your household.

The site also welcomes tips from consumers who want to share what they’ve learned about managing their finances and features a blog to encourage discussion of financial topics and concerns.

National Foundation for Credit Counseling Poster Contest

The National Foundation for Credit Counseling hosts numerous events surrounding Financial Literacy Month including its annual Be Money Wi$e poster contest. [Footnote 4] The NFCC poster contest invites elementary, middle and high school students to submit a poster design surrounding a theme that deals with managing money effectively.

In 2007, more than 1,500 posters were submitted surrounding the theme “Plant the Seed of Savings to grow your Future.” [Footnote 5] The 2008 theme was “Financial Responsibility Begins with Me.”

The Jump$tart Coalition for Personal Financial Literacy

The Jump$tart Coalition for Personal Financial Literacy first convened in 1995 after recognizing that the average high school graduate lacked basic financial management skills and now has coalitions in every state and the District of Columbia.

On April 8, 2008 the Jump $tart will be releasing the results of its Survey of Personal Financial Literacy among High School Students. [Footnote 6]

Government support

Financial Literacy Month has seen a surge of support within the government in recent years.

In 2003, the United States Senate designated April as Financial Literacy for Youth Month in order to create higher economic literacy and education among children.

Following that, the Senate realized that the focus should not only be on children, but on all Americans. So, in March 2004 the Senate passed Resolution 316 that officially recognized April as National Financial Literacy Month to broaden the spotlight to include problems resulting from pervasive financial illiteracy among adults of all ages. The Senate called on President Bush to issue a proclamation encouraging government, nonprofit organizations and businesses to support the month by offering activities that promote financial education.

In April 2005, Financial Literacy Month received further support after the United States House of Representatives passed a bill supporting the goals and ideals of Financial Literacy Month. [Footnote 7] This bill, much like the resolution passed by the Senate, called on President Bush to issue a proclamation calling on Federal Government, States, localities, schools, nonprofit organizations business and the people of the United States to observe the month with appropriate programs and activities. [Footnote 8] As of today, President Bush has not yet issued a proclamation. [Footnote 9]

During Financial Literacy Month in 2006, The Financial Literacy and Education Commission unveiled a new national strategy in their report "Taking Ownership of the Future: The National Strategy for Financial Literacy." The report outlines a series of outreach and education goals for the public and private sectors aimed to help Americans improve their understanding of financial issues such as credit management, savings, and homeownership. [Footnote 10]

The significance of financial education

*From 1997 to 2002, Jump$tart saw a steady decline in the scores of teenagers taking its Survey of Personal Financial Literacy among High School Students. The average score was 57.3 in 1997 and dipped all the way to 50.2 in 2002. Scores since have increased to 52.4 in 2006, but that means the average score remains a failing grade (below 60%). [Footnote 11]
*A survey in the US found that 4 out of 10 American workers are not saving for retirement. [Footnote 12]
*Nearly a third of high school seniors already use a credit card. [Footnote 13]
*About half of adults (49%) say they are concerned they have not paid enough attention to managing their finances as they should have and 48 percent are concerned they don't know enough about financial planning. [Footnote 14]
*Only 1 in 3 teens knows how to read a bank statement, balance a checkbook and pay bills. Only 1 in 5 had an idea how to invest. [Footnote 15]
*40 states have personal finance standards or guidelines (up from 34 in 2004), 28 states with standards require them to be implemented, 9 states require testing of student knowledge on personal finance content and 7 states require students to take a personal finance course to graduate. [Footnote 16]

Notes and references

1. Senate Resolustion 316; sponsored by Sen. Daniel Akaka D-HI

2. www.jumpstartcoalition.org/fileuptemp/AprilFinancialLiteracyMonth.doc

3. www.jumpstartcoalition.org/fileuptemp/AprilFinancialLiteracyMonth.doc and http://www.jumpstartcoalition.org/fileuptemp/FINAL%20PR%202004%20Legislator%20Award.pdf

4. http://www.nfcc.org/Newsroom/2007Financial%20LiteracyMonthInitiatives1.pdf

5. http://www.nfcc.org/Newsroom/2007Financial%20LiteracyMonthInitiatives1.pdf

6. http://www.jumpstartcoalition.org

7. http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HE00148:@@@L&summ2=m&

8. http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HE00148:@@@L&summ2=m&

9. http://www.whitehouse.gov/news/proclamations/

10. http://www.mymoney.gov/pdfs/ownership.pdf

11. 2006 Jump$tart Coalition Survey Results Executive Summary

12. Hecklinger, Richard E. Deputy Secretary-General of the OECD speaking January 9, 2006 at The Smith Institute

13. Junior Achievement, 2005

14. The Harris Poll #22, 2007

15. Charles Schwab Teens and Money 2007 Survey

16. National Council on Economic Education, 2007

References

External links

* [http://www.jumpstart.org Jump$tart Coalition]
* [http://www.nfcc.org National Foundation for Credit Counseling]
* [http://www.financialliteracymonth.com FinancialLiteracyMonth.com]
* [http://www.moneymanagment.org Money Management International]
* [http://www.usmint.gov/kids/campCoin/financialLiteracy.cfm The United States Mint]
* [http://www.mymoney.gov Financial Literacy and Education Commission (US)]