Letter: Securing the Future with Financial Literacy

Knowing how to manage money, use credit effectively, and make sound financial decisions makes an individual financially literate. In turn, a community with financially-literate citizens is more stable, has a higher standard of living, and has a greater capacity to be civically charitable. Seems straightforward. However, gaining financial literacy is a long-term process, one that should begin in school. In fact, the first major recommendation in the final report of the President’s Advisory Council on Financial Capability, issued on February 19, 2013, is to incorporate personal finance teaching into the Common Core Standards for K-12 education. The Council noted that “empowering every individual with the knowledge, skills, and access to tools to manage their finances effectively for long-term well being” is central to restoring America’s economic security.

U.S. debt metrics show student-loan debt at $975 billion, outpacing even credit card debt, which is topping $850 billion (usdebtclock.org). Rhode Island students have the fourth highest accumulated undergraduate debt, averaging $29,097 per student, and a default rate in excess of 11 percent according to the Institute for College Access and Success. Despite these facts, the 2014 National State of Financial and Economics Education survey reports that only 19 states require personal finance instruction to be offered at the high school level, with 17 requiring it as a graduation requirement. Rhode Island is not one of those states, and it should be.

Common Core instruction and assessment is designed to position students to be productive, contributing members of society. Yet, without basic financial literacy and capability, Rhode Island high school students are not receiving an adequate education. According to National Jump$tart Coalition and DoughMain’s 2013 survey, only 63 percent of students under the age of 18 have a savings account and only 43 percent of parents review bank statements with their students monthly. Only 28 percent of students have used online banking and only 30 percent of students give some of their savings regularly to charity. Nearly 81 percent of parents felt it was their responsibility to teach their children about money, but only 37 percent felt qualified to do so.

The US Household consumer debt and total American consumer debt profiles, as well as bankruptcies, default, and foreclosure statistics echo these sentiments. A study of financial literacy conducted by VISA and Kiplinger’s Magazine revealed that only 29.5 percent of respondents felt teenagers understood basic money management skills, such as budgeting, savings, debt, and spending responsibly. The study went on to recommend that students should be required to start learning about money by age 12, as the average age that a child starts to purchase items online is 10. This makes the high-school years essential to developing money management skills, especially given Rhode Island student loan burden and default rate. Rhode Island high schoolers are poised to make crucial decisions about spending, saving, applying for student loans, getting a job, and living independently with little to no personal finance education.

Rhode Island high school students are ready and eager to become productive, contributing members of society, but limited financial knowledge and capability will hinder our ability to do so. Understanding money becomes a necessary and empowering tool not only for ourselves but for our ability to impact our communities and the wider world. Our ability to manage our finances will not only allow us to achieve our own personal goals, but enable us to give charitably to support our communities and make a lasting impact on the world.

The National Endowment for Financial Education’s Smart Choices program links financial literacy together with philanthropy, demonstrating financial literacy as an essential ingredient in not only aiding young people to lead productive lives, but also empowering them to change their communities through civic charitable engagement. As Rhode Island high school students, we believe that consistent, quality personal finance education instruction should be part of our core curriculum. Financial literacy is a necessary tool to fully securing the bright future Rhode Island high schoolers are working for. Won’t you invest in our future?

Andrew Miner is a senior at East Greenwich High School. Andrew was named the national Wendy’s High School Heisman award winner in December of 2013. He is a member of the National Honor Society, a National Merit Finalist, president of the senior class, editor of the school newspaper, quarterback and captain of the football team, captain of the baseball team, and an All-State Jazz musician. Andrew will attend Harvard University in the fall. As part of his high-school studies, Andrew took a Personal Finance elective course with the 2014 RI Teacher of the Year Patricia Page. He also co-founded @realEdRI because “high-school students need a real and relevant education to meet the changing needs of the world and the workforce.”