Today we approach the end of March and April Fool’s Day. April is also the start of National Financial Literacy Month! Unfortunately, the fact that these two days coincide brings to mind the old saying, a fool and his money are soon parted. With better financial literacy, maybe we can put an end to that old saying.
National Financial Literacy Month was launched in 2004. According to Wikipedia, the US Senate passed Resolution 316 to officially recognize April as National Financial Literacy Month with the goal of helping Americans establish and maintain healthy financial habits. It all dates back to 2000 and The National Endowment for Financial Education which originally envisioned a youth financial literacy day. That idea grew and by 2004, April became known as National Financial Literacy Month here in the United States. Our neighbor to the north, Canada, recognizes Financial Literacy Month in November. To our south, Mexico has a Financial Literacy Week; although, it seems to be held a different week each year.
Financial literacy is a broad category and a moving target. Consider how broad the category is; think about banking, budgeting, cash flow, different types of loans, interest rates (fixed, variable, compound, APY vs. APR), credit cards, and how to evaluate good savings and investment products. Now consider how quickly those topic areas and the various associated products change. Just when you think you have credit cards all figured out, the lending companies change-up their product offerings.
Therein lies the problem. As society’s needs change, and our spending priorities and patterns change, so do the financial services and products we rely on. What we learned, or thought we knew, may no longer be valid. We all need to know the basics, but too many Americans are not even receiving the basics in school. Learning from our parents may not be any better – if no one taught them! According to Forbes, only 17 states require a single personal finance course for high school students! Of those, there are only FIVE states that require that the course goes for two semesters versus one. This is one of the many reasons we need we need National Financial Literacy Month.
This entire month, our team at InVestra challenges you to go out and spread the word. Tell people that April is National Financial Literacy Month. Ask questions and be curious about personal finance. Do you have children? Find out what is being taught in their school system about personal finance. Ask detailed questions about the curriculum and make sure your student is getting solid information. Find out if it’s one class or several classes over the course of their education.