What's so important about financial literacy?

Jul 26, 2013

You don’t need to look much farther than our country’s current financial situation to see the value in a basic knowledge about personal finance. At Washington Federal, we know understanding finance can be tricky; money management can leave many of us feeling confused and a little overwhelmed. Sure, we've all heard about ever-changing rates, the concept of “saving more” and the idea of avoiding excess debt – but what does it all mean? As practical consumers, how can we improve our financial literacy and educate today’s youth about fiscal responsibility?

Recently, the Consumer Financial Protection Bureau (CFPB) addressed some of these very issues. This got us thinking. As a bank, we take financial education especially seriously. So what are we doing about it? Washington Federal continues to make educating today’s youth about money a top priority. We've been working with elementary schools for several years and are excited about our recently-launched program for high school students.

Financial Education in America

According to the CFPB, “Americans simply are not well equipped to fight through the complexity to make sound and sensible decisions.” By educating people about how to make smart decisions with their money, a lot of headache and stress can be avoided in the future. And there’s no better place to start than with young people. “By overwhelming numbers – 89 percent of those surveyed – Americans recognize and acknowledge that financial education should be taught in schools.”

The CFPB goes on to recommend youth financial education beginning in kindergarten and continuing throughout middle and high school. “If these policy recommendations are broadly embraced around the country, we will be better prepared to cope with the kinds of problems that arise in our lives and to help starve off the threat of the next financial crisis,” said CFPB Director Richard Cordray.

Starting Financial Education Early - Save at School

In order to start educating elementary students about money management, Washington Federal launched the Save at School program in 2009. Through Save at School, elementary schools within our eight-state footprint can partner with their local branch to teach the kids about smart financial choices.

With parent permission, students are able to open a savings account right from their classroom. On the school’s “Bank Days,” students can bring in small deposits and thus learn the good fiscal habit of “thrift,” making regular contributions to a savings account. Washington Federal representatives are onsite to teach students how to use an account register and other banking basics.

Teenage Money Management - WaFed's Partnership with EverFi Financial

Starting financial education early is ideal, but the learning shouldn't stop there. As students transition from elementary and middle to high school, we think it’s especially important to start teaching students about taking personal responsibility for their finances.  With high school graduation looming and college approaching, credit cards and student loans will quickly become a reality for many students.

We've compiled some startling statistics about students and money. Here are just a few:

  • 60% of high school students agree they worry about money
  •  44% of high school students who report that they do NOT know what a credit score is still plan to get their own card in the next year
  • 61% of teens say they should make better decisions about what they buy.

How can we help students become more informed? To start with, we've partnered with the experts. In March, we joined with the United Way of Southern Nevada, Citibank and EverFi in announcing a new initiative to bring financial literacy education to high school students in the Las Vegas area. This new initiative provides students with access to the EverFi – Financial Literacy learning platform. This web-based program uses the latest in new media technology – Level 4 simulations, avatars, gaming and adaptive-pathing – to bring complex financial concepts to life for today’s digital generation.

Through this platform, students will become certified in hundreds of topics in personal finance, allowing them to become more informed, responsible citizens. The 10-unit course aims to teach, assess and certify students in a variety of financial topics they’ll soon face post graduation, including credit scores, insurance, credit cards, student loans, mortgages, taxes, stocks, savings, and 401K’s. Through our corporate sponsorship, the program is offered at no cost to the schools. Washington Federal plans to bring the Everfi program to over 20 additional schools in the fall of 2013.

What's next?

Our Save at School program and partnership with EverFi have created opportunities for Washington Federal to help educate the next generation of savings account owners,  loan applicants and financial decision makers. We’d love to hear your suggestions and feedback about this topic! How is your school, community or organization empowering individuals to make wise, educated financial decisions?

Financial Literacy for Students [INFOGRAPHIC]