Since personal finance and our economy represent a major portion of the lives we share, it seems relevant here in National Financial Literacy Month to examine everything our educational systems and parents do to promote the vital understanding of money management and importance behind spending less than we take in.
After looking to see how our Arkansas fared, I wish I hadn't.
The website WalletHub issued its report "2022's Most and Least Financially Literate States" along with expert commentary about the status of financial education for our youth. Arkansas finished 51st.
That causes me to wonder why finance isn't part of every public school curriculum. I can't recall a single class in high school during the 1960s that educated us on how to be wise with income, invest, use credit or plan intelligent spending in relation to how much we take in.
Moreover, I was never taught these critical financial aspects of daily life at home. So where was I (or anyone else) supposed to learn them?
Several financial experts offered their opinions.
To the question "What should policymakers do to improve financial literacy?" Tahereh Alavi Hojjat, chair of economics at Desales University answered, "If policymakers are serious to prevent another financial crisis, they should take initiatives to make financial education compulsory in schools and colleges.
"This action requires funds to be devoted to the school and organizing a campaign about the importance of financial literacy. Financial literacy classes should focus on teaching students the basics of money management: budgeting, saving, debt, investing, charity contribution, and more.
"That knowledge lays a foundation for students to build strong money habits early on and avoid many of the mistakes that lead to lifelong money struggles."
Any rational adult care to take issue with that? As I suspected.
As for what parents could do, she said, "Parents are role models for their children; their behavior could influence the children, economizing and not wasting any economic resources. One of the most important lessons you can instill in kids is that money is a finite resource and they must work for their money by doing chores. Perhaps the most important thing you can do to boost your child's financial literacy is to be open and honest about your family's finances.
"Parents must show their children the importance of saving and less consumption in general. Studies support that many of our financial habits are set by age 7. If good habits are not formed early, it becomes harder ... to point your offspring in the right direction. That means parents must get an early start teaching them concepts like thriftiness and delayed gratification."
Margaret Brooks, who heads Bridgewater State University's Center for Economic Education, reinforced how parents play an important role in educating their children to think in positive ways about money and financial decision-making.
"Parents can encourage their young children to think about how they can spend or save the money left by the tooth fairy; they can provide them with a piggy bank when they are very young, and with a bank account as they get older; and they can support their children's entrepreneurial interests in setting up a lemonade stand, selling Girl Scout cookies, or performing paid chores for neighbors such as babysitting or lawn work.
"Most importantly, by having open, age-appropriate discussions about money as they grow, parents can build their children's interest, knowledge, and confidence in making their own financial decisions."
Then there's Paul F. Goebel, director of the Student Money Management Center at the University of North Texas, who said, "Any opportunity for consumers to strengthen and broaden their personal financial knowledge is good--whether the opportunity is self-education or provided by a regulated financial service provider. ...
"There is not one perfect way to educate such a broad audience as the American public. Policymakers, researchers, politicians, educators, practitioners, and parents need to work together to continue to identify and create relevant personal financial resources for all consumers to easily access and apply to their financial lives and situations."
Finally, Cristian Tiu, chair and associate professor in the Finance Department in the School of Management at the University at Buffalo, said: "I think regulations that make information easily readable and clear are welcome. I think customers should not be allowed to access products that they do not understand; we cannot keep people from being irrational (some of them might even enjoy it), but people should know when they are behaving irrationally with their finances."
I couldn't agree more. Gosh knows, I've been irrational at times when I've seen something I want, rather than need, to buy. Never has it been more important to quell such knee-jerk approaches than during National Financial Literacy Month with inflation is running amok on all fronts.
Mike Masterson is a longtime Arkansas journalist, was editor of three Arkansas dailies and headed the master's journalism program at Ohio State University. Email him at mmasterson@arkansasonline.com.