By Paul C. Atkinson
As time leads us away from last decade’s financial crisis, national economists fear that conditions may be making it easier for us to again slip into a danger zone. Serious credit card delinquencies rose for the third straight quarter, a trend not seen since 2009 – right after our economic collapse.
A recent poll – the NFCC 2017 Consumer Financial Literacy Survey – conducted by the National Foundation for Credit Counseling (NFCC) found significantly more consumers carrying credit card debt from month to month, with nearly 20 percent of respondents rolling over $2,500 or more.
Financial issues are affecting Americans’ psyche; 88 percent of millennials worry about debt some or all of the time, according to a September 2017 NeighborWorks America survey.
There is a simple way we could help future generations with their financial health – require schools to teach financial literacy. Currently, 17 states incorporate financial literacy programming in high school course work. Curriculum varies from state to state, as does grade level for the courses. Some states are integrating financial literacy as early as kindergarten, which experts believe is the best – albeit most costly – solution.
The State of Arkansas recently implemented the Personal Finance and Job Readiness Act, mandating that students in grades 10-12 receive instruction on a variety of standards related to financial literacy. We at Consumer Credit Counseling Service of Buffalo urge New York State to adopt its own mandatory financial education act. Not only will this help our students, it will form behavior that creates a lifetime of ongoing financial stability.
High school students who are required to take personal finance courses have better average credit scores and lower debt delinquency rates as young adults.
As adults, they are more likely to make on-time payments and keep up with their bills, and they understand how to manage those obligations better than students who were not exposed to personal finance and economics in school, the data show.
Most high school financial literacy classes focus on banking, credit and budgeting. Student loans are also an important topic. In days past, parents played a much larger role in shaping teens’ financial knowledge. Recent history has shown that this method is no longer effective. From the growing complexities in the financial world to the situation where many parents themselves lack fundamental financial understanding, schools can – and should – play a critical role in financial education.
At Consumer Credit Counseling Service, we see the ramifications of poor financial decisions every day. Financial distress can happen to anyone at any time, but with a solid foundation of financial basics, people can tackle issues with a resilience born from acquired knowledge.
Mandatory financial literacy classes in New York State will reap great rewards for our youth.
Paul C. Atkinson is CEO and president of Consumer Credit Counseling Service of Buffalo.