By Roberta L. Nestor
Is financial literacy an issue in this country? Just about anyone will tell you, yes, it is a problem and, one that is easily identifiable. The good news is that more programs are being developed to devise solutions that will start to ensure that more Americans understand how to make better financial decisions and lead more comfortable lives.
Let’s face it, we have all made bad financial decisions. We see it every day with ourselves, our children, and now, our grandchildren. Some of us may be victims of the Silent Generation—the generation that does not talk about money. Most families have discussions about how much things cost, but discussions on budgeting, buying on credit and managing debt are non-existent. Because the Silent Generation has been reluctant to talk about money, as a result today’s Baby Boomers and Gen Xers have struggled to make sound financial decisions. Likewise, most have not talked about money with their own children. And so, silence on this topic has been handed down creating a vicious circle of financial illiteracy.
Experion has a fair summary of financial literacy, “The goal of financial literacy is to establish a feeling of control over your finances while also using money as a tool to freely make choices that build greater life satisfaction, including the ability to navigate unexpected issues like job loss and to set and work toward financial goals.”
Think about it, if you are financially literate, you can understand how to allocate your income toward different goals simultaneously. This can mean juggling on-going expenses, savings, debt repayment, short- and long-term expenditures, and having a sufficient emergency fund. When you are financially literate, you possess the tools to evaluate credit cards, loans, mortgages, and eventually, investment opportunities.
Currently, only twenty states mandate high school classes for financial literacy (CT is not one of them). So, how do we get there and how do we guide our children? Of course, you can start by talking and having open discussions about money; however, this may be a foreign concept if you are part of the Silent Generation. Fortunately, there are increased resources that can help get the discussions moving.
Let us start with The Securities Industry and Financial Markets Association (SIFMA). SIFMA is a not-for-profit trade association that represents securities brokerage firms, investment banking institutions, and other investment firms. The SIFMA Foundation is dedicated to fostering knowledge and understanding of the financial markets for individuals of all backgrounds. They provide the essential tools to help individuals increase their understanding of personal finance and make sound decisions that underpin lifelong success.
Instead of Robinhood, point your children or grandchildren in the direction of the SIFMA Stock Market Game. This is an online simulation of the global capital markets that engages students grades 4–12 in the world of economics, investing and personal finance, and prepares them for financially independent futures.” SIFMA provides all the curriculum and activity sheets.
There are many other organizations — The Foundation for Financial Planning; Invest in Girls; InvestmentNews; BNY Mellon and Pershing – established firms offering programs that seek to break the cycle of financial illiteracy and position Americans for a more successful financial future. If you are interested in getting involved, whether through direct participation or financially, reach out to one of these groups to learn more.
Roberta L. Nestor is a financial advisor practicing at 759 Boston Post Road in Milford, CT offering retirement, long term care, investment, and tax planning services. She offers securities and advisory services as a Registered Representative and Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or firstname.lastname@example.org.