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American adults have not mastered basic economic skills and are considered financially illiterate. When it comes to the financial literacy of America’s young people, the news is equally disturbing. In 2006 former Federal Reserve Chairman Alan Greenspan stated that “our children are financially illiterate and are unable to inherit the global economy unless we start to educate them in elementary school.” Seventy percent of the parent’s surveyed state that most children feel a sense of entitlement and expect to have whatever it is they want, whenever they want it. From more than 46,000 high school students surveyed nationwide in May of 2008, the average financial literacy score was 56%. Gavigan (2010) noted that even with 10 hours of financial literacy training significant change in behavior happens. The challenge is getting a core course incorporated into the school system. Additionally, he lists many curricula that are already tested and available for use, but fiscal constraints strap educators who are reluctant to add more to the curriculum.

The need to develop more adult financial literacy education has become more urgent due to the number of people who are now encountering financial distress. Chinen and Endo (2012) investigate how personal finance is affected by age, gender, and education of parents using samples of college students measuring attitudes of financial education while attending high school. Students were from different academic majors and were measured on basic financial education and advanced knowledge. They found a positive correlation of financial literacy and recommended that a basic structure of finance and economy be included as a requirement for high school students. The authors used questions designed to measure financial literacy on general knowledge to support the argument that in today’s society there is an increased demand for financial literacy at younger ages to better prepare people for the future. A multivariable analysis by Lusardi (2010) concluded that there is a difference in financial literacy by gender, ethnic and social background and parental role influences. Teachers’ influence had a small impact on the results but was apparent.

There was a direct correlation between level of education of parents and the financial literacy among young adults who also furthered their education; whereas, peer influence happens later in life. There are some limitations to the study but overall conclusions supported the need to incorporate financial literacy within the family unit concentrating on lower income areas. The study did show that parents greatly influence the financial literacy of their children, so a holistic approach is desirable if we are to educate our society as a whole. Ford, Matthew, and Kent (2009) sought answers to several hypotheses: female college students are more intimidated by financial markets than their male counterparts; female college students are less interested in financial markets than their male counterparts; female college students possess less financial market awareness than their male counterparts. An isolated study of 157 undergraduate business students consisting of 81 male and 76 female students focusing on age, GPA, gender, and financial experience was conducted. The results support the hypothesis that woman are less in tune with the market because of risk aversion.

Females also exhibited lower levels of rated market awareness, less familiarity with market terms, and less understanding of current market. However, the difference was not significant and further research warranted. Findings did suggest that gender-related differences in market attitudes and awareness extend in some degree to education level and course curriculum. A financial educator, Page (2011), developed many ways to teach students about financial literacy. He states that, with the increase in student loan debts, it is very important to teach students the right way to obtain a college education without living the remaining years in debt. He has developed a tool that can be used in schools so that students interact with one another and talk about finances, such as how they plan on funding college. He found that when students are empowered to create, within certain parameters, they manufacture products that are more meaningful than a score on a standardized test.

So by allowing young adults to be creative they have to build on tools given in order to succeed. Personal finance was once a personal need that has evolved to a national need as recognized by Way and Holden (2009). Because of the push to make this a part of curriculum in the schools they looked at the ability of teachers to instruct K-12 personal finance. Findings were that teachers have limited knowledge base and are ill prepared to lead in the fight to educate our society on personal finance. A noteworthy finding is that teachers in some subjects are better prepared than others. Teachers who have taken a personal finance-related course in college were more likely to feel competent to teach five of the six subject areas examined. The study also showed that much has changed over the last 30 years in finance but the basics remain the same. An important note is the variation in levels of overall preparedness in various disciplines, and those in vocational education are best prepared. One of the main points of the study was that there is a greater need to expand personal finance educational opportunities.

Education Secretary Arne Duncan made a plea to a special advisory council to improve Americans’ financial literacy though education and training programs, arguing that personal finance needs to be integrated into early curriculum as a core subject. As reported by Corbin (2011), Duncan states that too many people are either “underbanked” or without a bank account altogether, let alone equipped to make longer-term planning decisions about investments and retirement. Adding a financial planning component to the public-school curriculum would instruct students about common retirement plans and attract broader investment in the stock market. It would also cover the nuts and bolts of personal finance such as credit cards and loan offers. The earlier the lessons, the better, because Americans would bear more personal responsibility for funding their retirements, elevating financial literacy to a high priority on a social welfare front, and give a good explanation of why the subject has never been integrated into the standard K-12 curriculum. Studies conducted by the YMCA and Citigroup Australia took the whole family approach.

University of Australia (UTS) personnel and the Department of Education (DET) worked together and combined both studies, EvenStart for parents and MakingCents for children. Although both studies were conducted separately, DTS and UTS shared research and developed materials to further research. This 2004 study conducted by Chodkiewicz, Johnston, and Yasukawa (2005) is relevant today. Participating schools were located in lower income areas and the data provided was qualitative. Challenge noted was broadening the scope to meet everyone’s needs due to different levels of understanding and financial wellbeing. A suggested pilot program was addressed to strengthen the connection between parents and children. Jorgensen and Savla (2010) tested to see if parents influenced children’s financial knowledge, attitudes, and behaviors; and if so, the degree financial attitudes mediated financial knowledge and perceived parental influence on children’s financial behaviors.

The sample consisted of 420 college students and indicated that perceived parental influence had a direct and moderately significant influence on financial attitudes but did not have an effect on financial knowledge while having an indirect and moderately significant influence on financial behavior, mediated through financial attitude. This is also a current study and continues to show that young adults are more knowledgeable on things with which they are familiar, such as savings and debt: but that they struggle when not exposed. The limitation of the study was that parents were not part of the survey and are only perception. Additional data is needed in order to solidify the results. At the same time Shim, Barber, Card, Xiao, and Serido, (2010) conducted a cross-sectional peer reviewed study that tested a conceptual financial socialization process model specifically connecting anticipatory socialization during adolescence to young adults’ current financial learning to their financial attitudes and behavior.

Findings of the study concluded that in today’s society of self-discipline it is more imperative than ever to educate society as whole on personal finance and this will influence behavior. The author talks about the crucial need to start young and build a social network. Also, the impact parents have on children suggests a broader circle of education. Although children learn money management in school, it is what they observe at home that has a bigger impact. Parents who know little of financial literacy should learn alongside the child for a more open dialogue throughout their adolescence to independence. As an Accredited Financial Counselor with the Army, a majority of clients seen are ages 18-35 and have no written plan in place during the first meeting. Clients know what they have to pay every month and live pay check to pay check. Over 90% have no savings outside of Thrift Savings Plan and consider this as an emergency fund. A common response from clients during the onset is that they do not have enough money to cover bills and fall short more often than not. After putting pen to paper and mapping out a plan, clients are able to immediately save $1,000, pay off debt, and get financially on track.

The key is to have a plan. By the final meeting, most clients have built confidence and are able to self-manage household finances. Many are overwhelmed and find themselves running in circles but once they are able to organize household expenses are more relaxed and able to make financial decisions. Adults can be taught how to handle money but need the support to make this happen. On average clients are seen three to six months and delivery differs based on capacity. Just as with teaching youth, it must be recognized that adults face the same educational challenges. A person who grew up in a fiscally responsible family learns a little faster than someone who grew up in a low income family and was given no fiscal responsibility. State financial literacy is present and available for use but, again, funding for printed material becomes an issue. Local government relies on private organizations conducting studies to offer programming on personal finance and could fail if funding is not available.

The Federal Government recognizes the problems consumers are having and recently implemented the Consumer Financial Protection Bureau. This is great but the average person is overwhelmed on the internet, may become a victim of fraud if financially uneducated, and in dire need of assistance. So this falls to the local level for help and the Federal level to regulate. The biggest challenge is an adult has to want the help. Children are a captive audience in school and will only retain what is reinforced. Allen and Miller (2010) incorporated financial literacy agendas in conjunction with reduced child care cost during employment and found improvement in the wellbeing of the family unit. Research focused on parents and not children. The quantitative data obtained at the end of the independent study came from different agencies within the community and all responses indicated a change in behavior and came with an understanding of personal finance. The study affected 367 parents and 598 children from low income areas in several locations. Completion rate of the study was 96% and it revealed that the course content was too basic but was beneficial in other means.

The focus group data produced results of 63% paying bills on time and 82% comparison shopping once they completed the curriculum. Even though curriculum was basic, the objective to get families working together financially was obtained and noteworthy. In my current job, I led 30 families in this type of workshop. It was run in conjunction with the Chaplains Office which offered “Financial Peace University” by Dave Ramsey, and it resulted in a 90% completion rate. Because the children needed child care while parents attended the workshop, we conducted a children’s program called “Fun with Finance” which was independently developed and run in conjunction with the adult education. Findings over the 12 week session concluded that all parents who completed the course were able to talk to their children about money. Also, the family unit was less stressed and in better control in many other areas of their lives, including social and physical pillars as defined in comprehensive soldier fitness.

The children had exposure to financial literacy in school but were more in tune once parents came onboard with learning. Focus over the years has been on the children and on low income families, but this is not enough. This is because, as most behavioral habits start at home, now all income levels are affected. When a child is young the parent stands with them while teaching how to brush their teeth and provides the resources to be self-sufficient. The child then learns the importance of good oral hygiene in school and the success is measured when they regularly see a dentist. The outcome is a habit that carries on from generation to generation and continues to be measured during checkups. Today we teach children the importance of saving money but have fallen short in our actions because children tend to learn from example. So if the parent is not practicing what they preach, a child is less likely to go with word alone in the future. By teaching parents and by helping them to change behavior, children will see actions along with words and will be more likely to retain positive change mastering financial literacy, in turn building wealth as a nation.


Allen, Susan and Miller, Jerry. “Community Initiative to Support Family Financial Well- being.” Community, Work & Family 13.1 (2010): 89-100 UMUC Library. Web. 11 Apr 12
Chinen, Kenichiro and Endo, Hideki. “Effects of Attitude and Background on Personal Financial Ability: A Student Survey in the United States.” International Journal of Management 29.1 (2012):33-45. UMUC Library. Web. 11 Apr 12 Chodkiewicz, Andrew and , et al. “Educating Parents: The EvenStart financial literacy program.” Literacy & Numeracy Studies 14.1 (2005): p33-47. UMUC Library. Web. 11 Apr 12

Corbin, Kenneth “Education Secretary Appeals for Financial Literacy, Planning Instruction in Schools.” 8 Nov. 2011. http://www.financial- planning.com/news/education-secretary-duncan-financial-literacy-education- 2675914-1.html 19 Apr 12

Ford, Matthew and Kent, Daniel. “Gender Differences in Student Financial Market Attitudes and Awareness: An Exploratory Study.” Journal of Education for Business 85.1. (2009): 7-12. UMUC Library. Web. 11 Apr 12 Friedman, Pamela. “Providing and Funding Financial Literacy Programs for Low-Income Adults and Youth.” Economic Success for Families & Communities (2005). http://www.financeproject.org/publications/FESfinancialliteracy.pdf 20 Apr 12 Gallo, Eileen. “The Young Adult: Financial Education, Social Networking, and Internet Security.” Journal of Financial Planning 24.10 (2011): 36-37. UMUC Library. Web. 21 Apr 12

Gavigan, Karen. “Show Me the Money Resources: Financial Literacy for 21st-Century Learners” Library Media Connection 28.5(2010): 24-27. UMUC Library. Web. 11 Apr 12
Jorgensen, Bryce and Savla, Jyoti. “Financial Literacy of Young Adults: The Importance of Parental Socialization.” Family Relations 59.4 (2010): 465-478. UMUC Library. Web. 11 Apr 12

Lusardi, Annamaria and , et al. “Financial Literacy among the Young.” Journal of Consumer Affairs 44.2 (2010): 358-380. UMUC Library. Web. 11 Apr 12 Page, Brian. “Financial Literacy for High School Students.” Edutopia. 11 Nov. 2011. http://www.edutopia.org/blog/financial-literacy-high-school-students-brian-pa
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Shim, Soyeon, et al. “Financial Socialization of First-year College Students: The Roles of Parents, Work, and Education.” Journal of Youth and Adolescence 39.12 (2010): 1457-1470. UMUC Library. Web. 11 Apr 12

Way, Wendy and Holden, Karen. “2009 Outstanding AFCPE Conference Paper Teachers’ Background and Capacity to Teach Personal Finance: Results of a National Study.” Journal of Financial Counseling & Planning 20.2 (2009): 64-78. UMUC Library. Web. 11 Apr 12

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