Financial literacy skills are crucial
Education reform has long been one of the most widely and hotly debated topics in political and public policy circles and with families across the country. While many discussions of education reform focus on testing, making schools more accountable and providing parents with a greater variety of educational choices for their children, it is important today that policymakers and educators also address critical gaps in educational curricula and work together to develop creative solutions that produce a future workforce equipped to meet the growing challenges of the global economy.
One of the most overlooked gaps in many school curricula today is in financial and economic education. Too many teens and young adults are entering the workforce or going to college without the basic financial skills necessary to effectively manage their money. A 1998 survey by the Jump$tart Coalition of more than 1,500 high school students from across the United States found that most students are under-informed about the basics of finance. This is troubling not only for individual young people, but for the country as a whole, because it threatens the fabric of the nation’s economic and financial health. With easy access to credit cards and other financial instruments and the ability to use them virtually unsupervised in cyberspace and elsewhere, young people are facing a new era of financial peril.
Consider this: Mired in debt, how will America’s future workers and consumers be able to sustain a healthy domestic economy and maintain our economic leadership globally? Shouldn’t this challenge be at the top of our educational agenda?
Fortunately, this is not a problem without solutions. The answers lie in approaches that are both innovative and practical. Parents, of course, should be encouraged to teach their children the value of a dollar and how to manage their money.
Today’s economy and financial markets are constant reminders. But parents are not alone. Innovative partnerships of corporations and not-for-profit organizations can offer the financial education that schools are often unable to provide. The ease of access to the Internet, coupled with the technological savvy of young people, provides perhaps the most promising avenue for reaching youth with engaging, user-friendly programs that help them understand the basics of saving and investing, spending and credit, risk management, income and wise money management. Moreover, companies that help train young people on these issues are not simply addressing unmet educational needs, but also are building a financially and economically literate customer base and talent pool. For leading corporations, this is simply good business-and a sound investment in tomorrow’s leaders.
These partnerships, including one sponsored by Junior Achievement and The Goldman Sachs Foundation, have proven to be highly successful in giving students the key personal financial knowledge they need to be more successful in life.
An independent evaluation by the Worldwide Institute for Research and Evaluation (WIRE) of the joint JA/The Goldman Sachs Foundation Personal Finance Program shows that 100 percent of participating students reported that it had made a difference in their learning and skill level. Additionally, 91 percent of teachers surveyed said that the curriculum met students’ personal needs and was directly relevant to the issues they were facing in the real world.
The active involvement of parents, teachers and the private sector can effectively address many of the unmet educational needs of young people and help ensure their-and our nation’s-financial security.
David S. Chernow is president and CEO of Junior Achievement Inc., the largest and fastest-growing nonprofit economic education organization in the world. Stephanie Bell-Rose is president of The Goldman Sachs Foundation, a global philanthropic organization dedicated to improving the academic performance and lifelong productivity of young people worldwide.