Hey Pa. legislators: It's time to address financial literacy in the classroom

Category: Basic Money Management Published: Saturday, 20 December 2014 Written by Admin

The CPA profession has been championing the cause of financial literacy for more than a decade. Through volunteer programs, the Pennsylvania Institute of Certified Public Accountants (PICPA) has partnered with libraries, schools, local media and legislators to provide guidance on basic personal financial planning principles. We have reached thousands of individuals through these efforts, but this is not enough. A more integrated education plan is needed to teach consumers, at a very early age, some basic money management principles.

The numbers tell a frightening tale. Consider the following:

  • According to the Project on Student Loan Debt, the majority (69 percent) of students graduating from public and nonprofit colleges in Pennsylvania had student loan debt with an average of $28,400 per borrower in 2013.
  • In a survey conducted for the American Institute of Certified Public Accountants by Harris Interactive, 75 percent of respondents said they or their children have made personal or financial sacrifices because of monthly student loan payments. Only 39 percent said they fully understood the burden student loan debt would place on the future. Plus, a whopping 60 percent now have at least some regret over their choice of education funding.
  • According to a study by Moodys Analytics, people under age 35 have a negative 2 percent savings rate, meaning they are spending more than they have.
  • The most recent Survey of Consumer Finances by the Federal Reserve Board revealed that the lowest quartile of net worth is less than $50, and the mean net worth of the lowest quartile is negative $13,400.
  • The Employee Benefit Research Institute 2014 Confidence Survey reports that 24 percent of workers are not at all confident of having enough money for a comfortable retirement. Fifty-eight percent of workers and 44 percent of retirees report having a problem with their level of debt, and 36 percent of workers report they have less than $1,000 in savings and investments.

Hits: 806