Monday, April 26, 2021 | 2 a.m.
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April is National Financial Literacy month, but that is probably little known or celebrated outside of the financial industry and Junior Achievement partners. Perhaps a better designation would be Financial Acumen Month or, even better, Financial Freedom Month.
Don’t we all really want to be better prepared when life events happen to us? We would challenge that one month simply is not enough time dedicated to the lifelong journey needed to really become financially fit or achieve the perceived freedom we all hope to gain through it. So if we would agree that it is over several years and experiences that you gain the skills necessary to obtain this financial stability, where then are we missing the mark?
The pandemic has highlighted the critical need for financial literacy throughout life. Consider how one is faring in the absence of long-term and short-term savings. Similarly, consider the powerful opportunities for those who understood the market and invested.Whether you find yourself at the crossroad of generational poverty or situational poverty, or positioned to capitalize on market conditions, financial literacy is critical to your recovery and wealth generation.
Regarding Junior Achievement’s K-12 financial literacy programs, the analogy that you can’t dream about becoming something you don’t know exists is also true for money management. If you don’t live in a household where these skills are taught or demonstrated, oftentimes you won’t acquire them unless you learn them the hard way. In a state where 327,198 students of the 500,860 enrolled in Nevada public schools qualified for federal free and reduced-price lunch programs before the pandemic, it’s easy to see that relying on these skills being taught at home is probably not working.
So what does having financial literacy tools mean for an individual? For students, it’s the necessary resource right after basic survival needs — food, shelter and clothing — that can give them mobility out of poverty as young adults. It’s also the education to understand how to make their money work for them with financial tools like investments, but also income protection such as health and disability insurance. Knowing how to manage their resources is just as important as learning reading and writing. When we have a state full of constituents who can do that, our trajectory changes. Then we’ll have a reduced need for federal and state aid programs, and more people able to invest in our communities as consumers and philanthropists.
Consider this statistic: An increasing percentage of bankruptcy filers reported making more than $60,000 annually, according to a Debt.org study. Thinking about the incomes above that substantial number made us realize the lack of financial literacy is a widespread issue. Certainly there are life situations that we don’t plan for, such as divorce and health issues, but could this income level for bankruptcies also be due to lacking a minimal understanding of financial concepts such as compound interest? Are we all living beyond our means and need to learn the tools around delayed gratification? It’s likely somewhere in between.
Financial education is a great equalizer. It is the fastest path out of situational poverty and the best investment to end the cycle of generational poverty. So why aren’t we teaching it?
As we look to our pandemic recovery plans, it is important that we identify what wasn’t addressed before and how we can take strategic action to change what was broken. Our youth should be the starting place for change. Through education and enhancement in our state of the existing structures that teach life skills which produce economic mobility, we can make significant improvements to the overall financial health of Nevada. Furthermore, having these skills in place will directly impact our communities’ needs for other services. Literally every food, housing and domestic emergency, including feeling trapped in an abusive relationship, result from a lack of financial ability.
As a state, we must make a commitment to the next generation by investing in financial literacy as a core component of our education curriculum. By doing so, we will all enjoy the fruits of our labor and all ships can rise.
Junior Achievement is helping with this effort. Through our school district programs, younger students learn about their roles as individuals, workers and consumers while focusing on the importance of saving and the difference between wants and needs. Middle- and high school students learn about key economic principles, workforce issues, personal budgeting and credit. Some examples include the online and interactive JA Finance Park Virtual personal financial planning exercise, JA Inspire career exploration program, and new partnership with the Las Vegas Raiders’ Alec Ingold for his Money Mini Camp 14-part financial literacy series.
The time to change Nevada’s economic future is now, and it can be accomplished by investing in the next generation through our education systems and nonprofit partners. Junior Achievement can’t do it alone, and we invite business and community leaders around the state to join us in this mission so youths are better prepared for the next pandemic or Great Recession.
Michelle Jackson is president and CEO of Junior Achievement of Southern Nevada. Tiffany Tyler-Garner is executive director of Children’s Advocacy Alliance.
