PERSONAL FINANCE/JOHN NINFO: Let’s finally end financial illiteracy – MPNnow.com

With the end of Financial Literacy Month (April), I wanted to share with you my most recent piece on the needs for a required one-semester high school personal finance class, and for parents to be more proactive about teaching their children about personal finances:

April is Financial Literacy Month. As a retired Federal Bankruptcy Judge, and the Founder of the CARE National Financial Literacy Program — which sends bankruptcy professionals into middle schools, high schools and colleges, in order to share their unique knowledge, experiences and stories from the courts, in the form of important personal finance lessons, tactics and techniques — I have been working to end financial illiteracy in this country for over 23 years.

I have become convinced that the best ways to do that would be, first, to have a requirement that every high school student take a dedicated one-semester personal finance course in order to graduate. Then, second, to have families work with their children to build on the lessons covered in that course. Granted, Americans might continue to make many of the incredible mistakes with their finances that I saw firsthand in my 40 years in and around the bankruptcy courts, but it would no longer be because of a lack of financial education.

I have been and will continue to advocate for this requirement, along with so many other organizations, teachers, school administrators and enlightened citizens, working to promote more financial education. Unfortunately, it is a long, uphill battle. The last time I checked, 21 states required some financial education course work in order to graduate, but only six states required a full-semester dedicated course. On the other hand, the good news is that the number of states requiring at least some course work is increasing, and there are many more individual school districts that have overcome the often cited obstacles of having qualified teachers and the money, and have established this requirement.

The pandemic has highlighted the need for Americans to save more for emergencies and retirement, and how much Americans have been spending on unnecessary wants, wishes, luxuries, and conveniences, often going into unaffordable debt for them. It has also highlighted the student loan debt crises, and how important it is to understand how to minimize college costs and student loan debt. All of these subjects would be covered in detail in that required course, along with other important topics, like insurance, investing, and using technology for your financial benefit. It would also level the playing field for students of all demographics, partially addressing some important inequality issues.

All the research shows that students who passed required personal finance courses have better-than-average credit scores and are less likely to be in debt as young adults.

If your state or school district doesn’t have this requirement, advocate with your state legislators or school district officials, and help them to overcome whatever practical or fiscal obstacles they feel they are facing. At a minimum, make sure that your high school has a one-semester personal finance class as an elective. Have your child or grandchild take that course, and then work with them to share with them your personal finances life experiences.

As President Biden would say, “We can do this!”

As is our tradition, here are some National Days that I will be celebrating in May: International No Diet Day, May 6; National Moscato Day, May 9; National Eat What You Want Day, May 11; National Chocolate Chip Day, May 15; and National Wine Day, May 28thYes there is a theme, and it’s not personal finances.

On a different subject, taxes, which definitely would impact on the personal finances of many Americans in highly taxed states, like New York, there is the question of the possible elimination of the $10,000 cap on state and local taxes that was part of the 2017 federal tax reform legislation. After the lawsuits by several of the more affected states failed, we are now hearing talk from leaders of the Democratic-controlled Senate and House that the elimination of the cap may be included in the upcoming proposed infrastructure bills. Aside from the ongoing questions of whether that elimination could be characterized as infrastructure, or whether it would create jobs, given the possible dollar amount of the proposed bills, wouldn’t the added revenue from this cap, which some estimate as being $80 billion per year, help reduce the certain federal deficits and debts that will result from the proposed bills? I know that the elimination of the cap would help many New Yorkers, but what is better for the country and its taxpayers? I, for one, look forward to the negotiations and the justifications on all sides.

Speaking of legislative negotiations, we have recently watched “the sausage being made” in connection with the New York state dudget, as essentially described by several New York legislators, who themselves described how even they were surprised by some of the “stuff” in there. It seems clear that we will soon see this again when the federal infrastructure bills are finalized. By the way, the origin of the “how sausage gets made” idiom may be the proverb/quotation, “Laws are like sausages, it’s better not to see them being made, ” which, according to Quote Investigator, dates back at least as far as 1869.

Let’s finish up our discussions for Financial Literacy Month by looking at where Americans get their financial advice. According to a survey by creditcards.com, “American’s top financial advisor is their friends and family (37%). However, overall, nearly one third (31%) say they do not get any financial advice at all.

“Overall, a greater percentage of respondents found financial advice to be more trustworthy from financial professionals as well as friends and family, but less trustworthy from the media.

“When asked who had taught them the most about how to manage money, the most common answer was, ‘myself’ (43%), followed by mother (19%) and father (17%).”

We need that required course and for parents to teach more!

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo

John Ninfo

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