As financial planners, we have witnessed Americans living under the weight of poor financial decisions made in large part to a lack of basic understanding of personal financial planning. The evidence is everywhere: the friend shamefully buried in credit card debt, the couple approaching retirement who have not saved enough, or the neighbors living paycheck to paycheck.
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The evidence of poor stewardship of personal finances in the U.S. is dreadful. About 40% of senior citizens live entirely dependent on Social Security and Medicare, young adults hold $1.5 trillion in student loan debt, and three-quarters of Americans live from paycheck to paycheck.
It is my belief that poor knowledge in the basics of personal finance contributes to those statistics. As a country, since we possess one-third of the world's wealth, we should be better at educating our young people on financial matters.
New law
Through the advocacy work of the Financial Planning Association of Florida, I learned about a proposed law that would require all Florida public high school students to take a one-semester course in personal financial literacy. The primary sponsor was the nonprofit Florida Council on Economic Education, which would provide the course curriculum and teacher assistance for free.
After six years of advocating for the graduation requirement, Florida lawmakers presented a compromise bill that required all 550 Florida public
high schools to offer personal financial literacy as a one-semester elective course. Gov. Ron DeSantis signed the bill into law in June and it became the first required elective in state history.
Our immediate challenge is to promote the course to students, parents, guidance counselors and teachers as an elective for the 2020-2021 school year.
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How can financial planners help?
1. Advocate — Changing laws is difficult. We encountered years of opposition. One thing I have learned in my 12 years of advocacy in Tallahassee is when voters from a legislator's districts come calling, legislators listen. If you have never done this, I encourage you to try. Find a fellow financial planner who meets with state legislators and tag along. It's easy, and you will be surprised by the difference you can make effecting public policy. Worth noting is that as of 2018, only 17 states had laws mandating a financial literacy course for graduation.
2. Volunteer — There are numerous nonprofit organizations providing personal financial literacy materials and education. A simple Google search turns up dozens. More than anyone, we understand the language of money. We should be teaching the merits of smart money decisions to anyone willing to listen. Offer your expertise to a local high school economics teacher and volunteer to lecture on a personal financial planning topic.
3. Donate — Financial literacy nonprofit organizations need our financial support. Please consider donating to advance this cause.
There are 300,000 financial advisers in the U.S. If we could use our resources to teach young people the importance of smart money management, it could offer an enormous advantage in helping them ascend the economic ladder on their way to realizing the American dream.
Charlie Fitzgerald III is a principal at Moisand Fitzgerald Tamayo.
