Get schooled in financial education

The lack of financial literacy in the country is no surprise. However, the extent to which people are unaware of common financial terms is something I find shocking.

During a conversation with my sister the other day, it became increasingly apparent that our nation’s young people are no better equipped to handle their finances than the people who are currently drowning in debt. The conversation went like this:

    My sister: “Well, her house is paid off so they are just paying the mortgage and other bills.”
    Me: “What? That doesn’t make sense. Why is she paying a mortgage if her house is paid off?”
    My sister: “Umm ... hmmmm ... Wait! What’s a mortgage?”

Despite the overwhelming national debt discussions, and a crisis that continues to grip the housing market, the people who should be learning lessons from these situations simply aren’t paying attention.

At least my sister isn’t.

This question may be understandable if my sister were, oh I don’t know, in middle school, perhaps. But she’s not. She’s not even in high school. She is a college graduate who recently completed a thesis on the topic of conflict resolution in Telangana, India.

Pretty scary, isn’t it?

Luckily, there’s some good news.

Beginning this school year, four states – Utah, Missouri, Tennessee and Virginia – are requiring high-school students to take a course devoted to personal finance in order to graduate.

In addition, twenty other states will now require that personal finance to be incorporated into other subjects, such as math.

According to a 2011 Teens & Money Survey, 86 percent of 16-to-18-year-olds said they would rather learn about money management in a class than make financial mistakes in the real world.

So as the new school year begins, make financial education a priority for yourself and your family. You’re never too young – or too old – to learn more about responsible money management.

Head over to MMI’s financial education and budgeting tools sections and start studying!

(It’s actually kind of fun.)

Jessica Horton is a former copywriter and community manager at MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.