New Bill for Financial Literacy in Connecticut

money jim stigmanThe Department of Education in Connecticut is now required to offer a course dedicated to financial literacy in the state’s high schools and colleges. While there was a bill approved by the House of Representatives, there was no mandate put in place. This means that educational institutions will be required to offer the class, but students are not necessarily required to take it.

Connecticut high schoolers are currently required to take credits in career and life skills. As of the class of 2020, courses in financial literacy will begin to count within the career and life skills area. Present law instructs schools to teach personal finance, as far as proper usage of credit and debit cards. However, the new regulations will require the inclusion of the background of the labor movement and free-market capitalism to be counted too.

The financial literacy curriculum will be developed with the help of the state’s Department of Education, the board of regents of higher education, and the board of trustees for the University of Connecticut. Topics will include personal finance, the banking system, savings, and investments. Votes from the House of Representatives were in favor at a difference of 144 to 2. Rep. Bill Simanski points out the value in the type of curriculum. He shared that financial literacy is a key to success especially for young adults. He wishes that something like this existed when his children were in college and high school.

To learn more about this curriculum bill passed for Connecticut, visit the Courant online here.

How to Spring Clean Your Finances

brush-jim stigmanThe seasons have changed and those on the east coast of the United States are finally catching the feeling. During this time, It is not uncommon to use the warm weather to your advantage by cleaning out the things you no longer need. You may be cleaning out your closet, your dresser, or car. However, don’t forget to pay special attention to those finances. After a short assessment, you will most likely realize that those need some cleaning love too. Try implementing these steps for a more minimalistic financial picture.

Before you decide what to get rid of, take the time to define the word clutter. Stress may be a good indicator of what items are a burden. If it functions, leave it alone, but if it causes distress, deal with it.

Gather everything in one place and create a sorting system. Separate the documents from temporary to permanent. Also, acknowledge what things appear online. If there is a digital copy, a hard copy will be unnecessary. Some examples of categories may be pay stubs, tax forms, and bills.

After identifying the permanent documents, develop an emergency kit to house everything in one spot. You may need to access any variety of paperwork in case of an unexpected situation. Examples of documents to keep in case of emergency include birth certificates, deeds, marriage licenses, and records of paid mortgages.

There is an appropriate timeline for certain articles of paperwork After one year, pay stubs, utility bills, quarterly investment statements, and cancelled checks or bank statements can be shredded. Certain steps and check should take place before discarding items, but once you are sure, discard and don’t look back. Items to keep for at least three years include home improvement records, medical bills and cancelled insurance policies, and income tax returns.

Those are just a few tips to consider this April, which is National Financial Literacy Month. To learn more from Penn State’s financial literacy expert, Daad Rizk, see the PSU article here.

Teens Need Financial Literacy Too

After the market crashed in 2008, the Program of International Student Assessment (PISA) took it upon themselves to test and teach the worlds youth financial literacy. The test was conducted in over 18 countries and roughly obtained data from thirty thousand 15 year-olds according to The Huffington Post. As for America, they ranked about dead center in terms of results. On average, American students answered 492/700 questions correct.

Jim Stigman Financial Literacy in TeensRoughly, one in every ten American scored in the ‘top performance’ tier. The report released by the Organization for Economic Cooperation and Development (OECD) concluded in their report, “they (American students) can look ahead to solve financial problems or make the kinds of financial decisions that will be only relevant to them in the future.” Even though American students did rank fairly average compared to the rest of the world, almost 20% of the students did not reach the ‘baseline level of proficiency in financial literacy.’ Surprisingly enough, 50% of students who have claimed to have a bank account scored higher than students who do not have any accounts.

The United States Department of Education has seen the problem at hand and understands actions need to be taken in order for these students to be financially literate. The Department of Education explained, “there’s a clear opportunity for more states to require personal finance training as part of a high school degree. The Council for Economic Education reported that as of 2014, 17 states required students to take a high school course in personal finance or that personal finance be included in an economics or civics course as a graduation requirement.”

Even though it is great that the United States is beginning to implement required classes in their curriculums, the leading countries, in particular, Shanghai, China has required students since the early 1970’s to take classes in finance in their primary and secondary schools. These leading countries focus on financial excellence in their school systems. The majority of the time, business and finance drive the entire economy so it makes sense that these nations would want to develop the financial knowledge of their students.

Being the first test that PISA conducted on financial literacy, the Huffington Post states the students of America are headed in the right direction thanks to the National Jump$tart Coalition for Personal Financial Literacy and the Practical Money Skills website, which will be available to students in schools across the country. For students looking to find out more about how to prepare for their future, read this post on how to save for college.

Teaching Financial Literacy

Americans are lacking basic financial knowledge and they know it. 40% of the Americans polled by the NFCC admitted they would grade their understanding of financial topics average; C’s, D’s, and sometimes even assigning themselves F’s. So, we know we don’t have the knowledge we need to make sure our future, and the future of our children, is secure. And we also know the topics that people need to learn in order to be more financially responsible. Now, the question is, what can we do to improve the level of knowledge in our country?

Don't let your money fly away! Follow these steps!

Don’t let your money fly away! Follow these steps!

Teach It in Schools

Almost all of the Americans polled (85%) said they believed passing basic courses in basic household finance should be a requirement for graduation from high school. This would make a huge difference in the knowledge of our nation and should be considered by the Department of Education on a federal level.

Set Up a Budget

No matter what your income, it is imperative that you at least track how much you spend on a monthly and yearly basis. Little transactions add up and sometimes this is hard to see; kind of like the opposite of the classic adage, you miss the forest for the trees, in this case, you see the forest but can’t figure out where it came from! If you are looking down the barrel of a huge credit card bill each month and can’t figure out why, take some time to catalogue everything you spend. Take a look at what your daily habits are and try and save here and there. A classic example comes in a cup. Buying a cup of coffee every day seems like it would be pretty innocuous, hey, it’s just 3 or 4 bucks, right? Well, that 3 or 4 bucks adds up over the course of a week, month and especially a year. Four dollars a day becomes a little over one thousand dollars over the course of a year. I bet you could find a better use for that $1,000, don’t you?

Educate Yourself

Banks hold free seminars from time to time on the topic of financial literacy. Go and listen on night. Borrow a book about the basics of household finance from the library and read through. Take notes and implement the strategies discussed in the book for at least a month before you decide if they work for you!

You Can Do It

Everyone deserves the chance to retire and take care of their families without having to worry about living paycheck to paycheck. The great news is, with careful planning, dedication, and a little bit of financial knowledge, everyone can!