One cannot open a newspaper or turn on a television today without reading or listening to the growing concerns regarding wealth and the economy. Educators, news correspondents and politicians are going so far as to call our lack of financial education and debt accumulation a growing national epidemic and concern.
Scott Pelley of CBS’ “60 Minutes” ran a story on October 28, 2012 called “The Death and Life of Asheboro” which shared that since the year 2000 the number of Americans who worked in the U.S. manufacturing sector has declined from 17 million Americans to just over 12 million. That’s five million jobs lost in manufacturing alone in just the last 12 years to either jobs shifted overseas or closures due to the changing economy. Either way, many Americans in all sectors of the economy are now finding themselves down on their luck and forced to seek other means for financial survival due to these same reasons and others.
In my blog, “Can Making Mistakes Enhance One’s Success?”, I discuss how many adults currently between the ages of 40-60 find themselves in financial and personal turmoil, largely due to a lack of financial knowledge and planning created by their own teachers and parents before them.
In conjunction with current economic events and this lack of knowledge many in the Baby Boomer and Generation X groups acknowledge and fear, I have identified and continue to speak about a concurrent national epidemic which I call “financial obesity”: one’s obsessive and self-sabotaging need to constantly overspend and remain financially unhealthy. Like overeaters, the financially obese allow fear to prevent them from achieving the personal and financial success they desire. They simply cannot get out of their own way, and even more alarming, they are now also getting in the way of their children’s own futures. Many of these financially obese parents lack the knowledge and skills to navigate their own lives, so how can they possibly expect to be a productive resource for their children’s financial literacy and personal development?
It should come as no surprise then that like most middle-aged adults today, young and emerging adults who are now graduating college are also finding it hard to find work in the marketplace after graduation. Even worse, most are not prepared and feel ill-equipped to become financially independent, since the majority of their parents and teachers lacked the knowledge required to impart this crucial financial information to these emerging adults.
The U.S. Treasury Department and the Department of Education teamed from 2010 to 2012 to assess financial literacy in U.S. high schools, and the results weren’t pretty: the average score of almost 76,900 students in 2010 was 70 percent. 2011’s testing of about 84,000 students and 2012’s of about 80,000 students were both a point lower: 69 percent. Though young people in America have struggled for decades with financial literacy, state curricula has not shifted much to address the gaps. Fewer than half of states make high school students take an economics class, and just 13 require a personal finance class, according to a 2011 survey by the Council for Economic Education. The biennial survey also shows that just 16 states require testing in economics, three fewer than in 2009. This regression is noted in the survey summary, which points out that over the past two years, the trend toward teaching on these subjects has slowed, and is “in some cases moving backwards.”
“We have a long way to go as a country,” said Secretary of Education Arne Duncan in assessing the test results from these three years. “There has been a devastating cost to a lack of attention, urgency and seriousness of taking this on,” he said, noting that the housing crisis, low savings rate and poor retirement planning all flow out of the financial literacy issue.
Yet despite all of the ongoing research and statistics, little effort or action has been taken by Washington and the nation’s Department of Education or the state Boards of Education across the country toward changing or addressing the way schools should be educating children to properly prepare them for the new financial and societal challenges that have been created by the current economic and social changes.
Back in the 1970s and 80s, young adults were required to take home economic courses as part of their junior high and high school curricula with the belief that a foundation for good economics began in the home. However, according to Karen Leonas, an expert in textile chemistry and chair of Washington State University’s Department of Apparel, Merchandising, Design and Textiles, over the past few decades many young adults have lost touch with these basic skills and principles that were once taught in many high school home economics programs around the country. She now sees many students that do not know the essentials—like balancing a check book or sewing on a button. She also believes reintroducing home economics skills back into the current curricula may be valuable in surviving the current economic situation.
In my new book, Demystifying Success: Success Tools and Secrets They Don’t Teach You in High School, I have chosen to proactively educate today’s emerging adults to avoid the very financial pitfalls that are currently paralyzing and plaguing so many older adults. These young adults must be educated now with the appropriate information, tools and resources so they no longer follow blindly in the footsteps of the generations before them and perpetuate the continuing cycle of financial illiteracy in the United States. We must encourage them instead to develop new and self-reliant ways to succeed on their own terms. Moreover, we can positively impact their future personal and financial success by empowering emerging adults during their early, formative years to begin to think entrepreneurially and independently toward make better financial decisions earlier in their lives.
Like the home economics and typing classes of the 1960s and 70s that were designed to prepare young adults to enter the next phase of their lives following graduation, there must now be a concerted effort by lawmakers, educators and communities to join the movement to shift the misguided focus away from the overburdened “No Child Left Behind” standardized testing efforts toward a more productive and effective enhancing high school and college curricula that I have dubbed “Self-Economics”, which should include financial literacy (that promotes personal finance and investing and the avoidance of “financial obesity”), personal development (that promotes a more theoretical approach (“the power of why”) to learning and decision making, and entrepreneurship (which encompasses many of the elements of my T.I.M.E. Model) in an effort for emerging adults to better compete in a new century of global uncertainty.
In order to change the future outcomes for our children today, the 2001 “No Child Left Behind” Reform Act can no longer ignore ongoing issues surrounding financial illiteracy among young and emerging adults. Lawmakers and educators must step up and take action to introduce new educational concepts, techniques, and tools within the U.S. school systems that address this erratic financial ignorance that has plagued so many older adults.
In the April, 24, 2012 USA Today article by Hadley Malcolm, “The Cost of Financial Illiteracy”, Annamaria Lusardi, an economics and accountancy professor and director of the financial literacy center at George Washington University, said, “If we live in a world where people are in charge of their own financial well-being … we have to equip people to deal with this individual responsibility.”
“Only about two-thirds (more than 2,000) of the total college and universities in the United States now offer a course in entrepreneurship. A smaller but growing number have entire sequences leading to an undergraduate minor, a master’s in entrepreneurship, or something similar,” said Judith Cone, Vice President of Entrepreneurship, Ewing Marion Kauffman Foundation.
Scott Pelley explained, during that same “60 Minutes” segment I mentioned earlier, that many of these economically affected communities like Asheboro, North Carolina, are starting to re-build themselves—not because new big companies are beginning to move back in, but because “dozens of new entrepreneurs are setting up shops because a lot of them were down on their luck and had no choice but to cook up new ideas.”
I completely agree, in this new era of “Self-Economics”, that adults of all ages must now learn or re-learn and realize that they can no longer rely on others to solve or create their desired futures.
Jeffrey Arnett, author of the 2007 book Emerging Adult: Coming of Age in the 21st Century and When Will My Grown-Up Kid Grow Up? (May, 2013), believes, “If you provide emerging adults with resources, they’re much more likely to say, ‘How can I improve my life?’”
Like Arnett, it is my intention to help raise the awareness and needed change in our schools and society so that future generations of young adults can successfully manifest and grow their own future success.