Unfortunately, our children do not get a financial education while in high school. Those who go on to get a college education will only learn about finance in certain classes they take, and more specifically, through the degrees they earn. Most families don’t talk about money either. Today, most people want to talk about sex and politics over money!
The Financial Industry Regulatory Authority (FINRA) studies financial literacy. The National Financial Capability Study showed that 61 percent of U.S. respondents were unable to answer more than three of the five questions correctly. You may want to go to the website and take the quiz yourself.
You are welcome to request a copy of my Envisioneering Structural Assessment, which asks specific personal financial questions. Many who have taken it had difficulty answering the questions because of unfamiliarity. It is simply a tool that I use to assess your financial health.
Financial education and the PowerPoint presentation
If you have a 401k, you may have been invited to sit down for some retirement education. Some 401k service providers claim they provide financial education. In fact, one of my clients, who held a director position in his company, was never encouraged to participate. It was assumed he was already educated on the plan. And giving in to peer pressure, he didn’t want to let on that he didn’t know what to do!
In my experience, they give a PowerPoint presentation. When I hear education, I think of going to class, doing homework, and taking tests. Would you want to go to a doctor whose medical education had no tests?
What do you mean by financial education?
Additionally, these 401k providers typically focus on 401k education. However, the study shows that there are major financial issues outside of retirement education:
- More than one in five Americans (21 percent) have unpaid medical debt, and women are more likely than men to put off medical services due to cost, such as seeing a doctor, buying needed prescriptions, or undergoing a medical procedure;
- Nearly half of respondents, with a high school education or less, could not come up with $2,000 in 30 days in the event of an emergency, compared to only 18 percent for respondents with a college degree;
- Twenty-nine percent of 18 to 34-year-olds with a mortgage have been late with a mortgage payment, compared with 7 percent for the 55+ age group;
- Hispanics and African-Americans are much more likely to use high-cost borrowings, like pawn shops and payday loans, compared to whites—39 percent for African-Americans, 34 percent for Hispanics, and 21 percent for whites;
Much of these answers have at their foundation a lack of financial education. If you’re like any of these respondents, you need customized financial education.
Financial education and TLC from us
I am referring to tender loving care, not the music group TLC. Most of us have work lives that don’t leave much time for learning new things. In fact, where should you start? You may be challenged to get started because of the money language you were taught. Some were told they were not good in math, that this was not for girls, or that this is not a topic for Black people!
No matter your intellect or what voices were put in your head, you deserve to work with someone who spends the time to educate you on your terms. In other words, rather than a generalist approach, you need a custom approach tailored to you. One of my clients said: “My husband… knew “all this stuff,” but trying to learn it from him was like “asking your dad to teach you to drive” (not a good idea!).
Does this resonate with you? Do you want to learn more about Envision Wealth Planning’s financial education? Check out our presentations page. You can also schedule a personalized meeting, let’s get the conversation started!