Financial Literacy a Must
FINANCIAL LITERACY A MUST
Guest opinion submitted by Idaho Senator Mike Crapo
For the first time since the Great Depression, the average savings rate of Americans has dropped into negative numbers. Nearly 60 percent of parents don't restrict how their children spend the money they are given. Add this to the following statistics about financial literacy in our country and you can see there is cause for concern:
65 %: Percentage of 4,000 high school students in 33 states who received an F on tests evaluating knowledge of personal finance basics in 2004;
$11 trillion: Household debt in the United States in the third quarter of 2005;
2.04 million: Individual bankruptcies filed in 2005;
$3,000: Average credit card balance of college seniors, the majority of whom own four or more cards;
42 %: In 2005, percentage of workers or spouses who calculated the amount needed to save for retirement (down from 53 percent in 2000).
These numbers represent a rather unstable financial foundation for many families and individuals. With ever-increasing threats of telephone and Internet fraud and outright electronic credit card theft, it's more than a little frightening.
In Idaho, there is no lack of financial literacy education, but there is a lack of general knowledge about how to obtain these services.
Idaho has strong financial and education institutions that have taken up the challenge of educating people of all ages about financial literacy. The United States Senate has declared April "Financial Literacy Month," providing a great opportunity to talk about these resources.
The 25-member Idaho Financial Literacy Coalition brings together expertise and resources from the public, private and non-profit financial sectors. Members provide financial literacy education and services through local banks, schools and non-profit agencies. Some services include: - The Idaho Department of Finance provides speakers to schools and organizations on personal financial education; - Wells Fargo Bank offers financial literacy education services through its Hands On Banking program and other outreach efforts. Last year, team members visited 45 schools statewide, reaching 3,000 children.
- The Idaho Credit Union League partners with the National Endowment for Financial Education to offer financial literacy curriculum to high schools.
- In 2000, the Idaho State Board of Education adopted achievement standards including financial literacy classes in high school as part of the social studies graduation requirement.
- Debt Reduction Services offers free one-hour money management classes in the Treasure Valley, Pocatello, Coeur d' Alene and Idaho Falls, serving 7,000 Idahoans annually. - Coalition members provide financial literacy outreach to at-risk populations around Idaho. In addition, the Idaho Bankers Association meets quarterly to set up community outreach on financial literacy issues. As a member of the Hispanic Financial Education Coalition, Fannie Mae offers basic financial education and operates "train the trainer" programs in the Treasure Valley, Magic Valley and Wood River Valley. The Hispanic Cultural Center of Idaho partners with Northwest Nazarene University to provide monthly how-to classes on home mortgages.
The national economic outlook for families and businesses is positive. Since the 2003 tax relief reduced tax rates on dividends and capital gains, business investment has grown at 8.5 percent annually. Consumer confidence reached a near four-year high in March. The economy has grown by more than 3.5% a year, faster than any major industrialized nation in Europe or Pacific Rim democracies. It's imperative that people allocate resources wisely when planning for the future. Financial literacy is a must.
Maneuvering through the maze of finances is easier with experts on your side. Contact the Idaho Financial Literacy Coalition at www.idahoflc.org or 1(877) 688-3328, ext. 906. You can also go to my website, http://crapo.senate.gov, for more information on the subject of financial literacy.
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