Few Americans are adequately saving for retirement. Credit card debt is more than $1 trillion — or nearly $4,000 per adult. And the federal government in fiscal year 2023 had a deficit of $1.7 trillion.
Whether at the individual, family or government level, Americans are not very smart with their money. Now, some Washington lawmakers would like to start doing something about it.
“Teaching financial literacy is one of the best ways we can improve opportunity for our students,” state Rep. Skyler Rude, R-Walla Walla, said. “While some school districts have already prioritized financial education, many students aren’t receiving any instruction before graduation. It is time all students receive this crucial education regardless of school district. This has to be an even greater priority for the Legislature.”
Rude has pre-filed a bill for next year’s legislative session that would require students to pass a financial literacy course in order to graduate high school. The proposal has bipartisan support.
None of the school districts in Clark County include personal finance among their graduation requirements, but evidence suggests there is a need.
According to a recent poll from YouGov for Bankrate, 56 percent of American workers say they are lagging in saving for retirement; 37 percent describe themselves as “significantly behind.” Perhaps most important, the shortfall crosses generations. A majority of respondents from the baby boom and Generation X cohorts feel they are not saving enough, as do at least 40 percent of people from younger generations.
Meanwhile, Americans continue to rack up personal debt. In August, the Federal Reserve Bank of New York reported that U.S. credit card debt had surpassed $1 trillion; that debt increased by 4.6 percent between April and June alone. A survey conducted this month for Newsweek found that 46 percent of Americans with credit cards are “very” or “fairly” concerned about their ability to pay that debt.
That is not surprising, given the decadeslong example set by the federal government. According to Investopedia.com, the federal debt increased by $1.6 trillion under Ronald Reagan, $4.2 trillion under George W. Bush, $7.7 trillion under Barack Obama and $6.7 trillion during four years under Donald Trump. Continuing that bipartisan trend, it has further increased under President Joe Biden; the national debt is now more than $33 trillion.
The bookkeeping of the federal government is much different from the finances of an individual or a family, but a lack of financial literacy is endemic. Fixing it should be a priority; as Investopedia.com writes: “When you are financially literate, you have the foundation of a relationship with money, and it is a lifelong journey of learning.”
Instruction in financial literacy also would address a common complaint about school curriculums: Students would, indeed, use those skills in the real world. They could develop a better understanding of loans for higher education, the process of buying a home and the basics of saving and investing — items that are essential for achieving financial goals.
As state Treasurer Mike Pellicciotti told The (Spokane) Spokesman-Review: “Folks need to have financial education to be able to understand the complexities of the economic realities that exist today. Without that foundational education, folks would not be able to have the tools necessary to really economically thrive.”
And helping students to eventually economically thrive, after all, is one of the primary purposes of education.
