NEW YORK, June 20, 2012 /PRNewswire/ -- The U.S. is facing a dangerous knowledge gap in financial literacy for adults and children that is threatening the future economic empowerment and self-sufficiency of Americans. Statistics on foreclosures, debt accumulation, and habits of over-spending and under-saving, are evidence that insufficient understanding of basic financial principles is causing critical economic and societal problems. Fourteen states now require that high school students take a personal finance class, and 22 states require an economics class, and while this is a start toward improving financial literacy, it's far from enough.
"Sustainable Personal Finance," a McGraw-Hill Research Foundation white paper authored by Robert B. Walker, Ph.D., advocates an alternative approach to teaching financial literacy to people of all ages--at home, in school, in the workplace and at retirement. Walker, associate professor of Business and Business Department Chair at Mount Mercy University, describes sustainable financial literacy as a spending, savings, investing, and giving plan based on personal values and long-term goals. Walker notes that the need for personal financial accountability and responsibility has never been greater. He believes that teaching adults and children sustainable financial literacy will help them make better financial decisions that should ultimately lead to an increase in financial independence.
Instilling an appreciation for sustainable financial literacy requires teaching how to discover one's values, vision, mission, goals, and objectives – and tying in financial goals within this framework. It also promotes viewing money as a commodity used to help achieve goals.
Walker advocates that families use this new approach by talking openly about their finances and decision-making processes with their children. High schools should teach students that money is a resource and use of it is a reflection of what one values. Walker writes that the study of personal finance should be a requirement for every college student and that companies should provide employees with learning opportunities to help them keep pace with changes in insurance, investments, and retirement laws and regulations.
Robert B. Walker, Ph.D. is associate professor of Business and the Business Department Chair at Mount Mercy University, where he teaches both undergraduate and graduate students. Walker earned his Ph.D. in Education from Iowa State University, his MBA degree with a concentration in finance from The University of Iowa, and his baccalaureate degree from Miami University. He has more than 18 years of banking experience, serving as executive director of the East Central Iowa Chapter of the American Institute of Banking. He is co-author, with Kristy Walker, of a textbook, Personal Finance: Building Your Future (McGraw-Hill).
To download a copy of "Sustainable Personal Finance," CLICK HERE
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SOURCE The McGraw-Hill Research Foundation