A majority of Americans, says Forbes Magazine, are struggling financially, living paycheck to paycheck, and it doesn’t matter whether you earn $25,000 a year or $200,000 a year.
Forbes says that more than 60 percent of Americans are living paycheck to paycheck, and 41 percent of Americans earning between $150,000 to $200,000 per year live paycheck to paycheck.
Financial literacy, over the last three or four years, has been growing in importance in the nation’s public schools. In 2020, only seven states required teaching financial literacy in public schools. Since then, many states, including Rhode Island, have passed legislation that will require teaching financial literacy, and in some cases, requiring financial proficiency for students to graduate.
Rhode Island passed a law in 2021 that will require high school graduates, beginning in 2024, to “demonstrate proficiency in consumer education prior to graduating high school,” according to the Rhode Island Department of Education website.
This month is Financial Literacy Month, highlighting the importance of teaching individuals basic financial concepts.
General Treasurer, James Diossa has included Financial Literacy as a key priority of his office, as had his predecessor Congressman Seth Magaziner.
“Every Rhode Islander deserves the opportunity to achieve financial security,” the treasurer’s website says. “The Treasurer and his team advocate for expanded financial literacy in schools and for adults, as well as for programs and organizations that help Rhode Islanders become financial self-sufficient.”
RIDE has developed Financial Literacy resources and standards for schools throughout the state.
“This legislation helps ensure that every Rhode Islander graduates high school with an understanding of how to manage their personal finances,” RIDE says on its website. “This can break cycles of poverty, and make sure that all families can benefit from our economy.” RIDE has prepared a series of resources to support students, families, schools.
“Your level of financial literacy plays an important role in the quality of your life,” says Annuity.org. “When you are living paycheck to paycheck, falling behind on your credit card debt and spending more than you make, life can get stressful. In contrast when you practice healthy budgeting and saving habits, you can prepare yourself for a comfortable retirement down the road.”
Annuity. org has compiled what itcalls its “fascinating financial literacy statistics in 2023.” Some are alarming. Here are a few that stand out.
- “Does the average American practice health wealth management skills? According to recent financial literacy statistics, the answer is no.” Americans report owing more than $800 billion in credit card debt.
- A third of adults’ report “just getting by.”
- 75 percent of American teens lack confidence in their knowledge of personal finance.
- 25 percent of Americans say they don’t have anyone they can ask for trusted financial guidance.
- 23 percent of U.S. adults, between 18 and 29, have credit card debt that’s over 90 days overdue.
- In 2021, Americans reported losing an average of $1,389 because of a lack of personal finance knowledge.
- As of 2022, twenty-three states require high school students to take a personal finance course to graduate.
- 89 percent of adults report they have emergency savings funds, as of 2019 but 19 percent say they are “very uncomfortable” with their level of emergency savings.
- Where do teens learn about personal finance? 75 percent say they learn about finance from their parents, 52 percent from school, and 42 percent from social media. Obviously, there are students who reported learning from multiple sources.
- Even though most teens reported learning about personal finance, 41 percent say they don’t know what a 401(k) is and 32 percent don’t know the difference between credit and debit cards.
(To view the entire list, visit Annuity.org, financial literacy statistics)