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When most people come across the word “literacy,” they immediately think about it in terms of the ability to read and write. After all, that is the definition of the word. The ability to read, write, and comprehend subject matter is crucial in one’s mission to achieve success—ultimately becoming the foundation on which lifelong learning is established and sustained.
However, “literacy” has a secondary meaning. It also can indicate competence or knowledge in a specified area. When it comes to the various skills one can learn in life, few are more important than learning and understanding basic personal finances. This is why National Financial Literacy Month was established. Each April, public and private sectors come together to raise awareness about financial literacy and promote financial education. In Maine, this initiative is more important than ever.
According to the National Financial Capability Study, Maine people struggle with financial literacy. In our state, 18% of individuals reported that over the past year, their household spent more than their total income. Only 40% of Mainers could answer four or more questions correctly on a basic five-question financial literacy quiz. Further, 45% lack a rainy day fund. While some of these statistics reflect low or no income, many of these adverse findings can be attributed to a lack of financial education.
For years, financial education was not prioritized in early learning. As of 2019, only 17 states required students to take a course in personal finance prior to graduation. Maine was not one of those states. Luckily, things are changing. People are starting to recognize how paramount a sound understanding of finance is to success. In 2019, the League had the opportunity to testify in support of a bill requiring K-12 students complete regular financial education courses. That bill has passed. In the same year, the League played a role in unveiling a Joint Resolution, declaring April 2019 as Fostering Financial Education Month. Maine credit unions have long-recognized the importance of financial education and the impact of our outreach is helping move Maine forward.
Although the perspective on financial education is trending in the right direction, it’s important that Maine credit unions continue promoting financial education throughout National Financial Literacy Month, Credit Union Youth Month, and beyond. We have the ability to improve the overall well-being of Mainers of all ages and backgrounds. We can instill good money habits for the youth through our Financial Fitness Fairs and curriculum program. We can help end hunger as an outcome of financial education by offering our financial wellness tools and resources at food pantries. We can help the New Mainer and immigrant community prosper within the U.S. financial system through our partnerships with ProsperityME and Amjambo Africa. We can and we should. It’s for the betterment of Maine citizens, our communities, our state, and beyond.
Through these efforts, we can put the credit union People Helping People philosophy into action. I hope you’ll raise awareness and promote financial education at your credit union throughout the remaining weeks of National Financial Literacy Month, and in every month beyond.