By Christy Brady
Former Federal Reserve Chairman Alan Greenspan’s adage, “The No. 1 problem in today’s generation and economy is the lack of financial literacy,” continues to ring true today. Understanding how money works is a fundamental life skill that does not come easy for many. In fact, it’s a matter that becomes exacerbated when there’s little to no educational support. We need to raise awareness about this important issue as part of Financial Literacy Month in April.
With a career rooted in finance, I have often been surrounded by people who were savvy with money. Many of my colleagues would talk freely about saving, investing, contributing to a pension or 401k, and more. When I first started working, while trying to balance paying student loans, rent and other bills – they encouraged me to start saving $25 from every paycheck and increase that amount when I could afford it.
Looking back, I was fortunate to have access to education, work experience and mentors who taught me about financial systems and how to establish healthy habits with my money. With a career built on almost 30 years working in the City Controller’s Office, I’ve learned that exposure to, comfortability with, and investment in personal finance education is far too uncommon for most.
Philadelphia is the poorest big city in the country. As we work tirelessly to lift people out of poverty, we need to invest and implement social programs that can create family-sustaining jobs and a sense of self-sufficiency. Financial literacy needs to be incorporated into these programs with every available opportunity.
Beginning in the 2026-27 school year, Pennsylvania’s public and private high schools will be required to offer a course in personal financial literacy that students must complete to graduate. This is a giant leap forward in setting the next generations of Pennsylvanians up for success when it comes to finances. I applaud our elected state leaders for reaching this milestone and aligning the commonwealth with many other states that have already implemented a similar mandate.
Gaps in financial literacy follow most of the dynamics we see all too often in society. Creating generational wealth within the underserved communities and those with the lowest levels of financial literacy rates who, out of necessity, are more likely to make risky financial decisions and/or fall victim to predatory financial institutions or practices should be our mission.
In 2023, lack of financial literacy cost Americans a total of more than $388 billion, according to National Financial Educators Council. Furthermore, WalletHub reported that of all 50 states, Pennsylvania had the highest total outstanding college-loan balances at $37,000. Bringing financial literacy courses to high schools will prepare students with how to deal with the cost of continuing education. But, for folks who are saddled with the debt now, learning to navigate that debt on the way to homeownership, business ownership or other ventures is just as important.
If we want to make a worthwhile investment in the long-term wellbeing of Philadelphians and keep them out of poverty, we need to give them access to financial literacy resources.
The Community Affairs Division in my office disseminates financial literacy education almost daily. By request, we visit with high school students and senior citizens to offer resources on financial planning and avoiding common money-related scams. Soon, we hope to partner with local Boys and Girls clubs to build a foundation of financial education for young people, so high school is not the first time they are exposed to these lessons.
People of all ages in Philadelphia deserve access to financial literacy education. It will empower them to make smart money decisions and set them up for short- and long-term success. ••
Christy Brady is the city controller.
FAQs
Financial Literacy was emerged as the most needed Life Skill for students. Task Force brainstormed various ways to offer information on Financial Literacy. Explored various marketing formats to spark students' interest in the opportunities to learn and develop Financial Literacy.
What is financial literacy quizlet? ›
What is financial literacy? the ability to use knowledge and skills to make effective and informed money management decisions.
Why is financial literacy important for your life? ›
A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending.
What is financial literacy in your own words? ›
What Is Financial Literacy? Financial literacy refers to the ability to understand and apply different financial skills effectively, including personal financial management, budgeting, and saving.
What are the four main types of financial literacy? ›
Financial literacy is having a basic grasp of money matters and its four fundamental pillars: debt, budgeting, saving, and investing. It's understanding how to build wealth throughout one's life by leveraging the power of these pillars.
What are the five principles of financial literacy? ›
This article will explore the five basic principles of financial literacy: earn, save & invest, protect, spend, and borrow, providing you with actionable insights to enhance your financial knowledge and make the most of your resources.
What is financial literacy 1 point? ›
Financial literacy is the ability to understand and make use of a variety of financial skills, including personal financial management, budgeting, and investing.
Why is financial literacy important in Quizlet? ›
The benefits of being financially literate is that it gives you all the knowledge on how to handle money, helps you plan effectively with your money, makes you bankable, protects your money, and in the long term you could earn and save more money according to the financial decisions you make.
What is financial literacy group of answer choices? ›
Financial literacy encompasses understanding and effectively managing financial matters such as budgeting, investing and debt management. It involves having the knowledge and skills necessary to make informed financial decisions aligning with personal goals and values.
What is the power of financial literacy? ›
It can help you make smart decisions about where to allocate your money, enabling you to create a stable financial future. Financial literacy can also give you the confidence to explore new investments or take risks that could potentially lead to higher returns on your investments.
Empowerment and Confidence: Financially literate individuals feel more confident in managing their money. They understand concepts like budgeting, investing, and debt management, which empowers them to make informed decisions. Avoid Costly Mistakes: Lack of financial knowledge can lead to costly mistakes.
How does financial literacy impact students? ›
Simply put, financial literacy provides students with the tools and knowledge they need to make sound financial decisions. By understanding common budgeting strategies, managing debt properly, and smart borrowing, the student is less likely to become overwhelmed by potential financial concerns while in school.
What is the best way to build wealth? ›
It's really common sense, but budgeting, maintaining a consistent savings habit, avoiding or paying off debt, stashing money away in an emergency fund and spending less than you make are all pillars of building wealth. Investing is the more glamorous side, and that's also necessary, of course.
How can money affect relationships? ›
And it can create a host of tricky situations: the partner who earns more versus the partner who has to do more domestically (or the partner who does both); a welcomed feeling of financial independence after divorce; family members at odds over an inheritance; friendships or romantic relationships that feel out of ...
How to become more financially literate? ›
6 ways to improve your financial literacy
- Subscribe to financial newsletters. For free financial news in your inbox, try subscribing to financial newsletters from trusted sources. ...
- Listen to financial podcasts. ...
- Read personal finance books. ...
- Use social media. ...
- Keep a budget. ...
- Talk to a financial professional.
Understanding how money works is a fundamental life skill that does not come easy for many. In fact, it's a matter that becomes exacerbated when there's little to no educational support.
Is financial literacy a hard or soft skill? ›
Financial Literacy
Understanding financial principles, budgeting, and financial reporting are essential hard skills for roles in finance, accounting, and business management.
What type of subject is financial literacy? ›
Financial literacy refers to the skills and knowledge required to manage financial resources effectively. This includes, but is not limited to, financial competencies related to budgeting, saving, investing, and general decision-making regarding an individual's personal financial goals.
Is money a life skill? ›
Guest Column: Financial resilience is perhaps one of the most important life skills to learn. There is money well spent, and there is money well saved. Financial resilience is perhaps one of the most important life skills to learn. Many Americans find it more difficult to save today than prior generations.
