Several years ago when I tutored high school students, I met a young woman who needed math credits.
As I worked with her for a few weeks, I learned about her life – it seemed pretty tough for a student. For some reason, she no longer lived with her parents, but rather, shared a cheap motel room with another student. She worked at a minimum wage job and still managed, barely, to continue in high school. I was impressed with her perseverance, yet terrified for her future.
I knew from our work together that she struggled with basic concepts related to money. We worked on math word problems that required her to estimate a paycheck total when given a pay rate and number of hours worked. She rarely got the right answer. I realized how vulnerable she was out there in the tough world – someone could take advantage of her by underpaying, and she would not know it. Unless she gained more understanding, her ability to ever be financially stable was unlikely, and she faced a tough future.
If you are like most Americans, you probably received little or no formal education related to financial literacy, which includes a variety of topics including currency, saving, debt, credit, investments and more. For years, we have neglected teaching these skills to kids, somehow hoping that everyone would figure them out along the way.
Given that backdrop, the headlines should not surprise us – according to a study by the Urban Institute, more than 35 percent of Americans had some debt reported to collection agencies. The biggest percentage of that debt was from health-care bills, followed by student loans and credit card bills. Early financial education probably could have helped more people avoid excess debt and instead use financial tools to grow assets for the future.
We have some great local organizations that are stepping up to tackle this issue. Many local banks have offered free education programs and advice, and the two local colleges have added financial literacy options for students. Perhaps most impactful, the Colorado Department of Education adopted state standards in K-12 for “Personal Financial Literacy.”
Now, graduates can get a job and also manage the paycheck that comes with it. Durango schools have partnered with a nonprofit named “Know Your Dough” to teach financial basics to graduating seniors. In the future, there is hope to expand the program into lower grades to introduce critical concepts at an earlier age.
One of United Way’s bold goals for America is to reduce the number of families that are financially unstable. In order to do this, we need to continue to teach financial literacy and help people build assets for the future. These programs in the schools are great, but it is never too late to learn and improve. You can find options to build your own financial literacy at local colleges, banks, education centers, online and more. To all who are building, supporting and learning from these programs, thank you for Living United.
Lynn Urban is president and CEO of United Way of Southwest Colorado.