April is National Financial Literacy month

Sissy Osteen, Oklahoma State University Cooperative Extension Service resource management specialist, said research shows that individual financial practices and habits begin early in life and understanding and establishing them is essential to achieving monetary goals.

“Young people are particularly vulnerable to making financial mistakes. Learning through trial and error and observing consequences is a very powerful way to learn,” Osteen said.  “But when we are talking about learning new financial behaviors, these trial and error consequences actually cost money.”

The Jump$tart Coalition for Personal Financial Literacy, which promotes the teaching of personal finance in kindergarten through 12^th grade, conducts a nationwide survey of high school students every two years to measure the 12^th-graders’ knowledge of personal finance.

The results of the 2006 survey were compared to surveys done previously and show a slight increase in scores over the 2004 survey, from 52.3 percent in 2004 to 52.4 percent in 2006. Results of the 2008 survey will be released during Financial Literacy month this year.

The survey found that:

• Parental involvement plays a great role in the financial education and literacy of young people. The vast majority of students say that they learn their money management skills at home.
• Students with family incomes in excess of $80,000 per year outperformed all other groups.
• Students who intend to further their education tended to do better than those who do not with scores of 54.9 percent vs. 41 percent.

Osteen said Congress established a Financial Literacy and Education Commission to coordinate efforts of federal agencies concerning educating youth on finances as part of the Fair and Accurate Credit Transactions Act of 2003.

“With this move by Congress, the emphasis on the need for all Americans to become financially literate will expand and lead to increased awareness about the need for financial literacy education in our nation’s schools,” she said. “Economic times are changing, calling for more personal responsibility in managing finances from cradle to grave. We need to do all we can to ensure that we know what we are doing.”

Osteen suggests the following strategies to help increase awareness of the benefits and need for financial literacy for youth:

• Increase public and educator awareness about the need to improve financial practices;
• Facilitate business community involvement in activities;
• Promote the teaching of personal finance by demonstrating how personal finance topics relate to existing benchmarks and educational standards;
• Promote teacher education workshops and conferences that increase educator awareness of personal finance; and
• Promote the use of technology by teachers and students in order to gain personal finance knowledge and skills.

“It’s important for youth of all ages to be aware of finances and know how to make informed financial decisions,” Osteen said.  “By educating youth today, hopefully they will be better prepared to make important choices about finances in the future.”

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Katie L. Reim
Communications Specialist
Agricultural Communications Services
140 Agriculture North
Oklahoma State University
Stillwater, OK 74078
405-744-6792 (Phone)
405-744-5739 (Fax)
katie.reim@okstate.edu

Oklahoma State University, U.S. Department of Agriculture, State and Local Governments Cooperating: The Oklahoma Cooperative Extension Service offers its programs to all eligible persons regardless of race, color, national origin, religion, gender, age, disability, or status as a veteran, and is an equal opportunity employer.