In my series on youth and finances, I try to share many ways to give young adults tools to make sure they keep their financial life as stable as they can while navigating high school, leaving home for University and, eventually, their first career building job choices. However, for many students, personal financial stability has never been a reality, even if they have come from a family with that stability. There are many reasons for this, but the most prevalent is lack of education.
As I have mentioned in other blogs on youth and financial health, only 14 states require any type of financial lessons before graduation. This is particularly distressing for youth in areas where financial literacy topics, such as mortgages or retirement options, are overshadowed by the more pressing needs of day-to-day budgeting. While I am a firm believer in teaching kids budgeting at an early age, I also believe they need to learn the larger lessons as they enter high school and college. This doesn’t seem to be happening as much as it needs to, but there are organizations out there that dedicate themselves to helping fix the problem. One of these organizations is Moneythink, and while I am not endorsing the organization, I think it’s an interesting model for financial education.
Moneythink recently shared some disturbing statistics, including that only five states requiring financial classes actually test youth on the understanding of that information and that 18- to 24-year-olds are the fastest growing number of those filing bankruptcy in the United States.
Here is how Moneythink is approaching the problem. Launched in 2012, Moneythink hopes to, as they put it, “pave the way” to more solid financial stability by recruiting college volunteers “to serve as near-peer role models, college mentors, and financial coaches” in high school classrooms in communities where financial education is lacking from other volunteer groups. Moneythink volunteers are tasked to aid high school juniors and seniors through a 21-week course focused on real-world financial decisions that are being faced in their community every day.
It seems like Moneythink’s model is having some success. They surveyed 350 students from their launch year and reported these results:
65 percent of students felt more prepared for financial independence.
62 percent of youth felt they understood the detriment of high credit card debt.
31 percent more students engaged in money management conversations with their parents.
30 percent more youth showed knowledge of financial aid processes for college.
The organization credits their success to the teaching of core financial principles, including sound budgeting and proper saving. INC. Magazine also credits Moneythink with teaching youth how to avoid money traps such as predatory lending that targets the financially illiterate, as well as young adults and university students.
In March of 2017, Moneythink announced they finished the 2016 fall semester working with 600 volunteer mentors on 25 college campuses. Over 2,000 high school students in their local campus communities were mentored. More campus chapters launched winter and spring in classrooms across the nation in February 2017.
I think there are many ways to educate youth about finances and money management, and it’s great that young people are stepping up to help their peers in this sorely lacking area. Hopefully through their efforts and the efforts of those involved in other programs, we can reach more youth before they find themselves in financial difficulties. When they succeed, we all do.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.