Learning First Alliance

Strengthening public schools for every child

Beyond the Individual: Financial Literacy Fosters Civic Engagement

Tarsi Dunlop's picture

Do you remember when you learned to balance your checkbook, plan a monthly budget, manage credit card use, or perhaps invest wisely for retirement? Did you learn from parents, an older sibling, a seminar, or perhaps a bit by trial and error? In these times of economic uncertainty, responsible money management is an essential skill that the younger generation would do well to attain. April is National Financial Capability Month (also popularly known as financial literacy month) where, according to Presidential Proclamation: “We recommit to empowering individuals and families with the knowledge and tools they need to get ahead in today's economy.” 

What is the state of financial literacy among young people? Junior Achievement asked approximately 1000 teens between the ages of 14 and 18 a series of questions in their  14th annual Teens and Personal Finance Survey (sponsored by the Allstate Foundation) to assess teens’ attitudes about money management, financial uncertainty, planning for their financial future and paying for college. Key findings include: the teen population is more optimistic now than in past years about their financial future, but more teens say they will remain dependent on their parents for a longer period of time. The percentage of teens who feel they will be financially able to support themselves between the ages of 18-24 has fallen from 75 percent in 2011 to 59 percent in 2013. What’s more, concerns about their own abilities may be driving this uncertainty: 23 percent of teens are somewhat or extremely unsure about their ability to budget successfully; 20 percent are somewhat or extremely unsure about their ability to use credit cards and 34 percent are somewhat or extremely unsure about their ability to invest money. To empower young people with the skills to plan for their financial security, it seems that the earlier they are exposed to the information, the better. And schools can have a role to play in teaching it.

Financial literacy, or capability, is a prime example of a 21st century skill and offers the perfect opportunity to connect student learning with daily life and personalize learning. Writing in the Middle School Journal in May 2009, Ken Kay – then-director of the Partnership for 21st Century Skills (P21) - described how a middle school math class might integrate twenty-first century skills into the classroom: “students are challenged to open an online savings account and plan for college. They learn about money management and how important it is to start saving and budgeting when they are young. They begin to learn financial literacy, ICT literacy, and life and career skills.” In August 2010’s issue of The School Administrator, an American Association of School Administrators (AASA) publication, Gerald Lauber makes the case for teaching financial literacy, connecting between schools and a future informed citizenry as he advocates for professional development to help teachers: “build a citizen base of informed consumers who will avoid the excesses that led to our current fiscal crisis.”

Individual empowerment has broad societal benefits because it facilitates engagement and democratic participation. As we debate government spending and taxes, budget management, and fiscal responsibility we grapple with larger issues on the role of government and its responsibilities to citizens. The current Sequestration has a potentially devastating effect on our nation’s public schools. As citizens, we need to understand and own the decisions that ultimately affect us profoundly. Yet, without knowledge and understanding, we can’t hope to participate in a complex democracy. Understanding our personal financial circumstances and options brings us a step closer to participating in important national conversations around decisions that will shape our individual choices in the future.

For more information on events and workshops during financial literacy month, as well as resources, please check out this page, via the U.S Department of Treasury. If you’re interested in learning about and participating in the conversation around federal budgeting and national priorities, please visit The National Priorities Project.