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| Source: www.pexels.com |
By Sam Piha
Financial well-being is a growing problem for today's youth. For instance, today’s youth can amass debt quickly, often in the form of school loans or credit card debt.
We know from research that young people who are financially literate make much better decisions regarding their future finances. However, most young people, especially youth of color, lack access to financial literacy information. This is referred to as America’s financial literacy gap.
“Access to financial literacy is also an equity issue that is directly reflected through racial wealth gaps. Only 27 percent of California high school students attend schools that offer personal finance classes. Ensuring that all young Californians have exposure to financial literacy is a vital step in closing inequality gaps and providing the skills and resources to improve their lives overall.” - Tony Thurmond, California State Superintendent of Public Instruction
Every child and adolescent should be exposed to financial literacy education. One would think that schools are the obvious place for this, which would also address the financial literacy gap. However few states require this as part of their requirements for high school graduation. And because of the concern around COVID learning loss, low test scores in math and reading, and other pressures, many schools are not in a position to add financial literacy to their curriculum.
“While financial education is a growing priority for more schools, districts, and states than ever, gaps in guaranteed access still persist along racial, socio-economic, and geographic lines.” – Next Gen Personal Finance’s 2023 State of Financial Education Report
According to the U.S. Financial Literacy and Education Commission, financial literacy encompasses the skills, knowledge and tools that people need to take action and make financial decisions that will support their personal goals.
“Schools teach kids the principles of mathematics but very rarely how to implement those learnings for financial planning. Kids may be good with numbers by the time they graduate, but financial planning has many more concepts such as managing debt, profitable or emergency savings, the time value of money, and efficient budgeting. From counting coins in kindergarten to managing the finances of their own business in the future, the price of money needs to be explained to the young minds being nurtured at present.” – Dr. Nidhi Duggal, Principal
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| Source: Vermont Afterschool, Inc. |
Financial literacy is key to helping young people manage money effectively so that they can become financially stable, build assets and achieve their personal goals. The mistakes that youth make can have a great impact in adult life.
“Research shows that students who have access to high-quality financial education have better financial outcomes as adults that result in less debt and a higher quality of life.” – Tony Thurmond, California State Superintendent of Public Instruction
There are many benefits to being financially literate. According to Financial Coach, Sharath Mascarenhas in Top 5 reasons why financial literacy is important for youth in 2021, they include:
- “It helps us understand the value of money. When we understand the value of money, we are able to handle our finances in a better way. We will be able to know the importance of budgeting, saving and avoid unnecessary expenditures.
- Financial literacy keeps us from being debt slaves. If you are financially literate, you will be able to cut your coat according to your cloth. That means you will only borrow that which you are able to repay.
- It empowers us on how to invest and create wealth. Being financially literate generally enlightens us in various ways through which we can invest our money and generate more wealth.
- It prevents us from making poor financial decisions. A financially literate person will not be easily lured into Ponzi schemes and gambling. This is because they understand the value of money and how difficult it is to earn it.”
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Afterschool programs are especially well positioned to address the need for financial literacy. They have the kids- nationally, 10.2 million young people participate in afterschool programs.
Afterschool programs have an infrastructure (kids, space, staff, operating protocols etc.) that is already in place to support financial literacy offerings. These programs are more flexible than schools that must get approval on curriculum at the city and district levels. Afterschool programs are also free from the pressures of standardized test scores.
Promoting equitable access to financial literacy offerings in afterschool takes work and planning. This means action at the program level and the policy level.
Program Level
- Gather ideas and feedback from youth, staff, school personnel and families.
- Confer with others in the afterschool field: Providers and national organizations can tell you a lot about how other afterschool programs are incorporating financial literacy.
- Ages served: Some afterschool providers serve both young and older youth. Children benefit from financial literacy and there is plenty of curriculum and course materials designed for young children. Dr. Nidhi Duggal, School Principal, makes the case that it’s never too early to begin financial literacy. Naturally older youth and teens should be engaged in financial literacy offerings.
- Family members: Consider offering a financial literacy session(s) for the adult family members of the young people you serve.
- Staff leading sessions: Decide if your present staff will lead the financial literacy sessions. Identify organizations that can offer a training for your staff. If you want to bring in financial literacy session leaders, you can identify an organization that provides this service.
- Identify an organization that has developed curriculum materials and program handouts.
- Money Club: The financial literacy offering can be in the form of a “Money Club” where participants can learn about ways to earn money, how to increase their income by investing the savings, the chances of losing the investment money, what to avoid and how to make good investment decisions, credit, and the financial experiences of others and the implications, etc. The Money Club can feature guest speakers from the community, such as bankers, businesspeople, and money savvy members of the neighborhood.
- Require financial literacy participation for youth who are employed through the program. Also, you may want to require this of any youth who are engaged in workforce preparation offerings.
Policy Level
If we want to see equitable access to financial literacy, we need to convince funders and policy makers to increase funding and support. Afterschool program leaders contact local state and federal policy makers, funders and afterschool networks to make a case for increased financial literacy offerings in afterschool and to ensure that financial literacy is a high school graduation requirement.
WE WANT TO HEAR FROM YOU!
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| Source: Temescal Associates |
- What is happening in your area and state regarding youth financial literacy?
- What kinds of things are you doing to support youth financial literacy in your afterschool program?
- Would you add any additional resources that would be valuable to afterschool stakeholders?
Email us at info@temescalassociates.com.
[Upcoming Webinars]
Promoting Financial Literacy for Youth in Afterschool Programs
This webinar will feature afterschool practitioners who have successfully integrated financial literacy in their programs. It will also feature financial literacy experts on why financial literacy is important for youth, available curriculum and materials, and how to get started offering financial literacy in your afterschool program.
To learn more and register, click here.
Restorative Justice Practices in Afterschool Programs
This webinar will feature afterschool practitioners who have successfully integrated restorative justice practices into their programs. It will also feature restorative justice experts on why it is important for youth, available curriculum and materials, and how to get started using restorative justice practices in your afterschool program.
To learn more and register, click here.
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