April is Financial Literacy Month - a month dedicated to raising public awareness of the importance of financial literacy and maintaining smart money management habits. At Junior Achievement, we view financial literacy as “the other literacy.” Just like reading or writing, we all deal with money on a near daily basis. Yet too often, financial literacy programs consist only of a one-semester elective course in middle or high school that skims the surface of basic concepts. At JA, we think differently. We believe in taking students through a financial literacy pathway where JA programs are designed to engage all students on the subject.
The Impact of Financial Insecurity
Nearly a third of Americans (29%) say they lack savings to cover one month’s expenses. With inflation near a 40-year high, 56 percent of Americans report that rising prices are causing financial hardship. Even before recent cost increases, 40 percent of Americans said they struggled to pay for healthcare and food, including households making more than $ 50,000 a year.
While real earnings have remained flat or declined for many U.S. workers in recent years, even those considered “high-income earners” have struggled to pay bills, save for retirement, and be prepared for financial emergencies, according to a report by NPR.
Though real wages not keeping pace with the cost of living is an ongoing challenge facing too many U.S. households, research shows that only a third of Americans understand interest rates, mortgages, or financial risk. In fact, 4 out of 5 workers admit to being financially stressed, which may contribute to the severity of illnesses like heart disease, diabetes, and depression.
Even if people have limited means, a better understanding of how money works and how one can use budgeting, cost management, and credit as a tool can help lead to better financial outcomes, which can contribute to a greater quality of life and financial wellness.
A Lack of Literacy Impacts Capability
According to research by the Milken Institute, only 57 percent of adults in the U.S. are financially literate. Additionally, the problem appears to be growing as Generation Z scores worse than other generations on financial literacy tests. While a recent survey shows that 80 percent of American adults wish they had a financial literacy course in school, about 25 percent of current high school students have access to one of these programs.
However, mandated or required financial literacy courses are often available for only one semester in later grades and focus on knowledge gain only. They may not impact the attitudinal perceptions that are necessary to foster intentionality resulting in the behavior change needed to transform financial literacy lessons into the financial capability of the student.
Junior Achievement: A Pathway to “The Other Literacy”
Junior Achievement employs a pathways approach to teaching financial literacy to young people. By “pathways,” we mean that JA programs are designed to engage all students on the subject over multiple grades preparing them for the transition to post-secondary education or work.
What the Research Says
Our approach gives students the tools to increase their chances of achieving economic security as adults. Research results14 include:
82 percent of Junior Achievement alumni agree they have a strong financial footing.
84 percent of JA Alumni agree that their Junior Achievement experience helped with their financial literacy.
68 percent of JA Alumni between the ages of 18 and 29 say they are financially independent of their parents. According to the Pew Research Center, 34 percent of Americans in that age range say the same.
The average age JA Alumni report paying off student loans is 30.
JA Alumni report purchasing their first home at 29. The National Association of Realtors reports the average age Americans purchase their first home is 33.
The research also shows that JA alumni are more likely to finish college, find a satisfying job or career, and start a business. Lear more about our programs here: https://www.myja.org/programs.