April is Financial Literacy Month
Financial Literacy Month is recognized each April in Michigan, and encourages families, classrooms, and youth organizations to reflect on how young people can establish and maintain healthy financial habits.
Jump$tart Coalition will champion a month-long campaign in April to raise public awareness about the importance of financial literacy. Included in their initiatives and events is Money Smart Week (April 23-30).
Here is a complete list of Michigan's Money Smart Week events.
Why do we need a whole month dedicated to financial literacy?The National Financial Educators Council (NFEC) recently released the results of their National Financial Literacy Test. Forty-five percent of participants failed the 30 question test. The test was designed to measure young adults’ ability to “earn, save, and grow their money.”
American college students are racking up more debt than ever and they’re lacking in basic financial literacy. According to Reporter, “a survey of 42,000 American students entering college showed that only 34 percent had taken a class on personal finances in high school, leaving the majority unprepared for what is soon to follow.”
Nearly 40 million people carry student loan debt and that number is rising. Approximately 15 percent of borrowers are defaulting on this debt within the first three years of graduation. This increases the difficulty of buying homes, purchasing cars, or even getting a job.
Roberta Klein, professor of Personal Financial Management, says “there are large knowledge gaps.” Many students don’t keep a tally on how much money they owe or the interest on their loans, which can be higher than rent.
Maybe a month dedicated to financial literacy will put a dent in student loan defaults. Maybe it won’t. At the very least, maybe it will help more people answer this question correctly:
If I invest $100 per month starting at age 21, and that money earns a 7% return, how much will I have after 70 years?
B) Between $150,000 and $225,000
C) More than 1.5 million dollars
D) None of the above
Only 28 percent of NFEC’s test takers chose the correct answer.
Correct Answer: C
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