On March 28, 2012 the Senate passed Resolution 409 that officially recognized April as National Financial Literacy Month.
Why do we need yet another officially designated day, week, month – we have so many! There’s Mothers Day, Fathers Day, Grandparents Day, Nurses Day, Bosses Day, Administrative Assistant’s Day, Breast Cancer Awareness Day, Black History Month and now – since 2004, Financial Literacy Month.
Why do we need it? Well according to the bill’s sponsors, in the resolution presented to and passed by the 112th Congress this March, we have a lot of issues to solve.
According to the resolution:
- Twenty-five.6 percent of households in the United States are unbanked or underbanked and, so have missed opportunities for savings, lending, and basic financial services ( according to the Federal Deposit Insurance Corporation).
- Forty-one percent of adults in the United States gave themselves a grade of C, D, or F on their knowledge of personal finance (according to the 2011 Consumer Financial Literacy Survey Final Report of the National Foundation for Credit Counseling).
- The number of personal bankruptcy filings reached 1,500,000 in 2010, the highest number since 2005, and in 2011, the percentage of total consumer filings increased from 2010 (according to the National Bankruptcy Research Center).
- Only 13 percent of workers were ‘‘very confident’’ about having enough money for a comfortable retirement, a sharp decline in worker confidence from the 27 percent of workers who were ‘‘very confident’’ in 2007 (according to the 2011 Retirement Confidence Survey conducted by the Employee Benefit Research Institute).
- Less than half of workers (42 percent) in the United States have tried to calculate how much they need to save for retirement (according to the 2011 Retirement Confidence Survey conducted by the Employee Benefit Research Institute).
- Household debt stood at $13,200,000,000,000 at the end of the third quarter of 2010 (according to a 2011 ‘‘Flow of Funds’’ report by the Board of Governors of the Federal Reserve System).
- 28 percent, or nearly 64,000,000 adults, admit to not paying all of their bills on time (according to the 2011 Consumer Financial Literacy Survey Final Report of the National Foundation for Credit Counseling).
- Only 43 percent of adults keep close track of their spending, and more than 128,400,000 adults do not know how much they spend on food, housing, and entertainment, and do not monitor their overall spending (according to the 2011 Consumer Financial Literacy Survey Final Report of the National Foundation for Credit Counseling).
- 1 in 3 adults in the United States, or more than 75,600,000 individuals, report that they have no savings, and only 22 percent of adults in the United States are now saving more than they did a year ago because of the current economic climate (according to the 2011 Consumer Financial Literacy Survey Final Report of the National Foundation for Credit Counseling).
- Only 22 States require students to take an economics course as a high school graduation requirement, and only 16 States require the testing of student knowledge in economics and only 12 States require students to take a personal finance course; (according to the seventh Council for Economic Education biennial Survey of the States 2011: Economic, Personal Finance, and Entrepreneurship Education in Our Nation’s Schools).
- While 69 percent of American students strongly believe that the best time to save money is now, only 57 percent believe that their parents are saving money for the future (according to the Gallup-Operation HOPE Financial Literacy Index)
The sponsors of the resolution hope and believe that:
- Expanding access to the mainstream financial system will provide individuals with less expensive and more secure options for managing finances and building wealth.
- Quality personal financial education is essential to ensure that individuals are prepared to manage money, credit, and debt, and to become responsible workers, heads of households, investors, entrepreneurs, business leaders, and citizens.
- Increased financial literacy empowers individuals to make wise financial decisions and reduces the confusion caused by an increasingly complex economy.
- A greater understanding of, and familiarity with, financial markets and institutions will lead to increased economic activity and growth.
According to the resolution, the intent of the having Financial Literacy Month, according to Congress, is to raise public awareness about:
- the importance of personal financial education in the United States and
- the serious consequences that may result from a lack of understanding about personal finances;
by calling on the Federal Government, States, localities, schools, nonprofit organizations, businesses, and the people of the United States to observe the month with appropriate programs and activities.
- Have a bank account;
- Are knowledgeable about personal finance;
- Have not filed for bankruptcy;
- Are very confident that you will have enough money for a comfortable retirement;
- Have calculated how much money you may need during retirement;
- Keep your household debt under control;
- Pay your bills on time;
- Keep track of your spending;
- Have some savings and increase the amount saved year over year;
- Took personal finance or economics classes in high school and and
- Your children know that you are saving money
Then you are not included in the statistics listed above. Share what you know and do with those around you to help the nation become more financially literate!
I will be planning parts of my Grandma’s Money Camp (a one week experience for my grandchildren to help teach them financial literacy) in observation of National Financial Literacy Month.
What are you doing to observe National Financial Literacy Month?
PS: Don’t forget to check out the new “Share Your Voice” section on the PET homepage.