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Poverty can be changed with financial literacy

· FinLitMonth,mindset

One of the reasons I did not want to teach in the public school was because I did not think the curriculum was relevant. Apparently, I am not the only one who wants CHANGE. Councilman Allan Domb tweeted "On moving the needle on poverty, “We need to require K-12 financial literacy,” #CountingonYou


Forbes in…/addressing-poverty-through-digit…/… wrote "Many experts concur that two of the challenges keeping people underserved, underbanked and underemployed are a lack of digital skills and financial literacy. Seventy-five percent of Americans live paycheck to paycheck and 25% have no savings at all; nearly half of all Millennials have too much debt, and many borrow from predatory lenders."

Locally, The Philadelphia Tribune,…/article_b792b1c2-ac48-5bfc-9773…, wrote "In Philadelphia, 14 percent of city residents are “un-banked,” which means they do not have access to banks and other mainstream financial institutions and an additional 22 percent of city residents are “under-banked,” which means they do business with credit unions but still go to check-cashing services, with costly add-on fees, for other transactions, officials said. Negative credit reports for late or missed payments can result in denials for loans or higher interest charges."


David Ramsey in…/should-financial-literacy-be-t…, wrote "Anyone who’s ever struggled with a difficult class in high school has asked the question, Will I ever actually use this stuff after I graduate? Now that you’re on this side of graduation with high-school-aged kids of your own, you know they probably won’t factor equations, diagram sentences, or need to remember what E stands for in E=mc2 on a daily basis. But one thing is for sure: They will need to know how to handle money wisely—and the sooner the better! That’s why we’re such huge fans of teaching financial literacy in schools."

Poverty is a function of financial illiteracy. Education is the cure to ending poverty in this city. This is the next big challenge for our education system to emPOWER students before they sign on the dotted line for bloated student loan debt.

Dave Ramsey went on to write "Financial literacy classes teach students the basics of money management: budgeting, saving, debt, investing, and giving. That knowledge lays a foundation for students to build strong money habits early on and avoid many of the mistakes that lead to lifelong money struggles.


Why We Think Personal Finance Belongs in High Schools

As a country, we’ve seen where a lack of personal finance education can lead. Millions of Americans struggle every day with their money, living paycheck to paycheck and relying on credit cards for necessities, only to wind up deep in debt and short on hope."

Dave Ramsey continued "Beyond that, many Americans are finding that they can’t buy homes, invest for retirement, or save for their child’s college fund because of their own student loan debt, massive car payments, and general lack of financial planning.But it doesn’t have to be that way. A lot of the money problems Americans are facing could have been avoided if financial literacy was taught earlier, in school. That’s why we think more schools should offer financial literacy courses as part of their graduation requirements." I personally benefited from understanding money at a young age which enabled me to become a homeowner. The equity I earned in just 3 years of home ownership in Washington DC allowed me to start a business in Philadelphia.


WHYY,…/competition-money-enhancing-financial-l…/, wrote "Nationally, 17 states, including New Jersey, require students to take a financial literacy course; 20 states require a course in economics. Pennsylvania isn’t in either camp, according to the Council for Economic Education. In Philadelphia, Councilman Allan Domb has pushed for more financial-literacy classes in public schools. Earlier this year, district officials said they’re working with the Federal Reserve Bank of Philadelphia to develop workshops and curricula around personal finance."


Dave Ramsey continued with "So what advantages are there to learning money principles as a student rather than as an adult? Well, students who learn personal finance principles early have the most time to apply what they know, getting the most out of their knowledge. Even better, many personal finance students apply what they learn right away—while they’re still in high school. For example, according to a survey conducted by Ramsey Research in 2016, nearly two out of three high school students who had taken a personal finance course reported they were already earning an average of $3,000 a year.


A high majority of the same group said they were in the habit of making monthly budgets for their money. And 20% already owned a car they paid for themselves! That’s why the basics of personal finance should be taught in high schools everywhere, right alongside other basics like reading and math. Think about the jump start your child could get on life if, when they graduated high school, they were already in the habit of budgeting, saving regularly and spending wisely! They could have thousands of dollars saved in the bank as well as a paid-for car and the beginnings of a retirement fund.


And that’s not just a dream; it’s the reality for many students nationwide who are gaining important money skills at an early age. These students are the proof that as many schools as possible should be teaching financial literacy." Forbes went on to say "Understanding how to make financially responsible decisions and managing one’s credit and debt are skills that are essential to our daily lives, without which people are vulnerable to the kinds of financial predators and poor decisions that helped cause the housing crisis. Financial literacy is critical to avoiding high levels of debt, excess fees for financial products, accessing credit and saving for retirement."


Champlain College,…/the-case-for-high-school-financ…, wrote "Personal finance education in high school provides students with the knowledge and skills to manage financial resources effectively for a lifetime of financial well-being. Here are just some of the reasons our young people need to learn about personal finance:

The number of financial decisions an individual has to make continues to increase, and the variety and complexity of financial products continues to grow. Young people often do not understand debit and credit cards, mortgages, banking, investment and insurance products and services, payday lending, rent-to-own, credit reports, credit scores, etc.


Many students do not understand that one of the most important financial decisions they will make in their lives is choosing whether they should pursue post-secondary education or not after high school, and if they decide to pursue additional education, what field to specialize in.

Most college students borrow to finance their education, yet often do so without fully understanding how much debt is appropriate for their education or the connection between their area of study and the income level that they can expect upon graduation. Many students attend college without understanding financial aid, loans, debt, credit, inflation and budgeting.

Employee pension plans are disappearing and being replaced by defined contribution retirement programs, which impose greater responsibilities on young adults to save and invest, and ultimately spend retirement savings wisely. If they fail to do this, they could become a significant economic burden on our society.


A recent study indicated that only 24% of Millennials (ages 18 to 34) surveyed could answer four out of five questions correctly in a financial literacy quiz.3 By comparison, 48% of Baby Boomers (born between 1946 and 1962) were able to answer four out of five of these quiz questions correctly. While Boomers should be more knowledgeable, our young citizens are dangerously illiterate in this area.


A Charles Schwab survey indicated that parents are nearly as uncomfortable talking to their children about money as they are discussing sex. Seven in 10 college students from the Class of 2013 graduated with student debt that averaged $28,400 and delinquency rates on student loans continue to soar.


Financial literacy leads to better personal finance behavior. There are a variety of studies that indicate that individuals with higher levels of financial literacy make better personal finance decisions. Those who are financially illiterate are less likely to have a checking account, rainy day emergency fund or retirement plan, or to own stocks. They are also more likely to use payday loans, pay only the minimum amount owed on their credit cards, have high cost mortgages, and have higher debt and delinquency levels. As a society, we need more training programs that increase the number of financially literate citizens who are able to make better and wiser financial decisions in their own lives." As a community, I want to see less Philadelphians living in poverty and more Philadelphians owning businesses through saving with home equity. It is time to make public school education relevant again.