Opinion: Financial literacy is important now more than ever

Since 2004, the United States has recognized April as National Financial Literacy Month to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits. With schools closed and our local economy at a standstill, it’s clear that financial literacy is an important tool that we all need to weather the storm of this pandemic.

When Financial Literacy Month was first instituted 16 years ago, these skills were recognized as essential. Over the course of the last 10 years, each financial crisis unveiled, in painful ways, the price that individuals, families, communities and our country pay when financial knowledge is lacking. Students should be taught — both at home and in school -- how to handle money.

We live in a time when teaching financial responsibility to children and young adults is increasingly important. In fact, data from the Federal Reserve shows that 40% of American households cannot withstand a financial emergency of $400 or more. Historically, the skills of financial literacy have been taught by parents based on the family’s values and resources. What happens, however, when parents don’t have the financial literacy knowledge to pass on to their children? Many low-income parents do not understand the value of banking institutions versus check-cashing agencies or the importance of establishing a good credit score.

So, what is being done in our region to address this issue? In 2019, the Commonwealth of Massachusetts passed a law (H.438 and S262) that allows state education officials to establish financial literacy standards and encourages schools to incorporate this education into subjects like math, business, and social science. For the past several years, a group of local businesses including BayCoast Bank, Bank5, Alferes Realty, Keller Williams Realty, MassHire, Shaw’s supermarkets and even Robert’s House of Formals have come together to host Credit for Life programs at 12 local high schools. These programs have students imagine their lives as 25-year-olds and plan out a monthly budget so they can examine first-hand how financial health is related to other life decisions.

Junior Achievement has run a host of programs delivered by community volunteers during the school day starting at the elementary school level through high school that help to introduce children to concepts of money and finances. The Leduc Center for Civic Engagement at UMass Dartmouth, in collaboration with Bristol County Savings Bank, has piloted a successful financial literacy program called Money Smart in numerous schools in New Bedford and Fall River. Students learn about budgeting, credit, loans, saving and numerous other topics through curriculum designed by the FDIC and taught by university students.

While many of these programs are put on hold for the time being, there are some area schools delivering online financial literacy education through programs such as Bonzai and EverFi, which is sponsored locally by BayCoast Bank.

Financial Literacy Month is an ideal time to recognize these community programs and partnerships that are helping to deliver this important curriculum to our students in a meaningful way. Given all that is going on around us, it is also an opportunity for adults to give some thought to how we can increase our financial IQ as well. A quick Google search will uncover several strategies that we can all follow to manage personal finances during this crisis such as:

Check out online financial literacy lessons and programs and follow along with your children.
Learn what type of assistance national and local government is providing in this time of crisis.
Look into possible hardship adjustments that may be available to you with respect to financial and other contracts
Revisit and create a budget to manage new conditions imposed by the crisis.
Try to rebuild savings over time to help with future emergencies.
Take advantage of online technology to manage your money.
Manage your debt.
Watch out for fraud.

We know it’s important to teach financial literacy because good money management skills learned at an early age will transform lives for the better and position all of us to deal with emergencies and economic downturns such as what we are experiencing.

Here in the Southcoast, we are fortunate to have teachers and community members working together to deliver these vital lessons to many of our students. But, now more than ever, we need to make sure that financial literacy, just as reading literacy, becomes an integral part of the curriculum in all our schools.

Matthew H. Roy, Ph.D. is assistant vice chancellor for civic engagement at the University of Massachusetts Dartmouth. Julie M. Ramos Gagliardi is first vice president for corporate giving and community relations at BayCoast Bank. Both serve on the Greater Fall River Education Committee for the One Southcoast Chamber of Commerce.