Blog Article

What is Financial Literacy?

The phrase “financial literacy” is becoming more and more common in today’s society, but what exactly is “financial literacy”? In a 2008 annual report to the President from his Advisory Council financial literacy is defined as "the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being."

In it’s most basic form, financial literacy allows you to do comparison shopping, balance your checking, and even get a job. But beyond that financial literacy skills will help you create a long-term plan for the future. Skills like buying a car, moving out on your own, buying a home, starting a business, or investing for retirement.

Financial literacy skills give a person the ability to manage their own money instead of the money managing the person. When you get in over your head financially, debt can control your life. Being financially literate can help you avoid the debt trap. Having strong financial literacy skills creates a sense of independence and empowerment within a person.

And although schools teach students about reading, writing, and arithmetic, financial literacy classes are not as common and not as thorough as they should be. This results in many young adults who are unable to manage their personal financial lives. Students graduate and start their lives with large amounts of debt in the form of student loans and consumer credit debt.

Even though about half of the US states now have some form of financial literacy courses as part of a high school education, we still have a long way to go. Schools need better resources and teachers need additional training in order to confidently teach students these important life skills.
In order to assist schools in meeting the 2.5 high credits for financial literacy, a New Jersey non-profit called DoughMain Education Foundation is creating fun, interactive tools available to teachers and students across the country. Through the support of non-profits like DoughMain, schools are better equipped to properly teach students financial literacy skills.

For more information on how you can help create financial literacy in all communities across this nation, please visit http://doughmaineducationfoundation.org.