Joe Murray: The importance of improving financial literacyBy JOE MURRAY
April 22. 2018 7:10PM
APRIL BRINGS many things: spring, baseball, flowers and taxes to name a few. What we at Fidelity Investments hope is that April also brings a greater level of financial literacy to everyone.
It’s National Financial Literacy Month, which highlights the importance of knowing the ABCs of financial literacy, which touch every facet of life. Studies show that people with low levels of financial literacy tend to be less financially secure and less confident in all matters – both personal and family oriented – related to financial decisions. And, it appears the problem is getting worse.
The percentage of people who could answer four out of five questions about basic financial know-how dropped from 42 to 37 percent from 2009 to 2015, according to the most recent Financial Industry Regulatory Authority (FINRA) study.
Far too many individuals lack the basic skills necessary to develop and maintain a budget, to understand credit and investments, or to effectively use our banking systems. There is clearly a critical need to lay a foundation of economic and financial education in classrooms at an early age to positively impact peoples’ decision-making skills and habits.
By giving back to the communities where we live and work, Fidelity’s mission is to ensure today’s youth have the financial foundation they need to be successful in life. At Fidelity, we collaborate with local nonprofit partners such as Junior Achievement, the SIFMA Foundation, the National Council for Economic Education, and Jump$tart to teach students financial basics – such as spending, saving, budgeting and interest rates — to empower them to make smart financial decisions. Our 1,000 volunteers nationwide and 27 locally bring their financial know-how to in-classroom discussions and hands-on simulations with teachers and students to help improve their financial literacy.
Our Fidelity Cares Teacher Personal Financial Literacy Training program — or “Teach the Teacher” — has reached more than 1,100 teachers nationwide and 150 teachers here in New Hampshire since its 2015 inception. Those teachers have, in turn, reached 16,000 students, reporting a 20-25 percent increase in confidence of topics covered.
These programs enable our youth to better understand the relevancy of personal finance and help prepare them for economic success. Research shows financial planners accumulate approximately three times the amount of wealth of non-planners.
We can all make a difference when it comes to financial literacy and preparing students for the future. We encourage families to talk to children about how to handle money, stressing the importance and benefits of saving responsibly and helping them set their own financial goals. Together, we can all help prepare students in New Hampshire to make better financial decisions to improve their lives.
Joe Murray is vice president of public affairs for Fidelity Investments.