Tuesday, February 24, 2015

Oklahoma's determination for financial literacy

New research shows that Millennials are having a tough time managing their money. This age group, born between 1980 through the early part of this century, may be technologically smarter than prior generations, wiser beyond their years, and more driven to accomplish more in their careers at a faster pace than their parents' generations. With all this advancement, why are they unable to manage their finances?

It may be that this group is just starting out in the real world. They are advanced in many respects, but technology has had that affect on the global environment in general. Everything now works faster because new ways of doing things faster and better are always being created. It may be that research is jumping the gun, being unfair to a generation that has just gone out into the real world and still has time to think about money and saving for the future.

But it's never too late to save for the future. If this generation should know anything, it's that tough economic times are always around the corner and the only way to avoid a real financial crisis is to be smart with your money.

Speaking with teachers and financial education advocates, it's disheartening to hear how current generations are clueless when it comes to their finances. This even with all the new laws passed after the real estate bust and accounting scandals of the century to help consumers manage their money wisely. Many college students are strapped for money, either overcharging their credit cards or not making enough to pay their way through school.

What is known is that exposure to financial literacy at a young age is the best way to raise financially intelligent children. Some research disputes this, but in the past the goal was only about exposure and not making financial literacy a critical part of a child's curriculum. It's very similar to what we see happening with our children's' math skills: they plummet when they're not using them because after a while we all believe that they're not needed.

In 2007, the Oklahoma state legislature passed the Passport to Financial Literacy act. It requires that children in grades 7 - 12 learn 14 financial literacy standards before heading to college. These require children to comprehend the basics about budgeting, the economy, and finance. Oklahoma is the only one of two states in the nation to adopt such standards.

While the goal is to raise the next generation of budget savvy consumers, there are still challenges. The standards are incorporated into regular classes, taught by teachers who lack the formal training and expertise in anything financial or economic. Some training is provided, usually by groups and individuals within the financial literacy profession, but not by respective schools or the Board of Education. This leaves another huge gap between intent and practice, one that is bound to regress from its original purpose if not addressed promptly.

The good news is that financial literacy advocates are now working closely with state legislatures to address this problem now, as opposed to burdening future generations. At today's meeting held by the Oklahoma JumpStart Coalition with state legislatures, concerns were raised and goals set as to how to continue the fight for our children's financial future. What is clear is that while there was still plenty of work to accomplish, there were many determined to fight for real accountability and policies to make financial literacy a part of Oklahoma's children's lifestyle, one our children can carry with them to adulthood.

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