The observance of National Retirement Planning Week, April 8-12, and Financial Literacy Month each April provides an excellent opportunity to consider how we empower younger generations to make sound financial decisions.
In many families, money is considered a topic “too adult” for kids. But, young people learn by seeing and doing, so why are we keeping so many everyday money lessons from them, like avoiding debt and saving for the future? This must change immediately if future generations are to avoid the financial uncertainty so many Americans face today.
Consider a 2016 study by the Economics Policy Institute, which determined most families — even those approaching retirement — have little or no retirement savings. A separate study by The Pew Charitable Trusts conducted in 2015 found the median household does not have enough money in liquid savings available to replace just one month of income.
Knowing kids tend to model behaviors they see in adults, it should be no surprise they, too, have much to learn about money. This was evident in a survey of 500 children seven-to-10 years of age and their parents, conducted by Wakefield Research for Junior Achievement and Jackson Charitable Foundation in 2017. Among other findings, the study found:
- 33% of children hadn’t been taught how to get or earn money,
- 41% hadn’t been taught how to spend money,
- 47% hadn’t learned how to give money to others,
- and only 25% knew interest can be earned on savings.
There is reason for optimism though. The same study also found that 55% of kids were excited when they heard adults talk about money, and 34% said they felt motivated when they thought about it. This means teachers, parents and other adults have great potential to leverage young people’s natural curiosity to increase their financial knowledge.
To help realize this potential, the Jackson Charitable Foundation announced Junior Achievement USA as one of its first partners after the Foundation was established in 2017 with a mission to advance financial literacy on a national scale. Founded in 1919, Junior Achievement’s purpose has been to inspire and prepare young people to succeed by promoting financial literacy, career-readiness and entrepreneurship. Its network reaches approximately 5 million students each year throughout the United States.
The result of the combined effort is expanding the reach of the Foundation’s first major initiative — Cha-Ching Money Smart Kids, which encourages students ages seven-to-12 to develop good financial habits early in life by providing them with the building blocks to earn, save, spend and donate. This is accomplished through 18 brief music videos featuring relatable animated characters teaching money-smart values to kids as they watch the characters make real-word decisions about money.
The Cha-Ching lessons were integrated into Junior Achievement’s third-grade program, JA Our City, which is taught to approximately 430,000 students annually. JA Our City introduces students to financial literacy and learning objectives for third–grade social studies, including how people manage their money and the importance of economic exchange within a city. The program also includes take-home activities for kids and parents to inspire financial learning beyond the classroom. This productive partnership has played a significant role in the incredible growth and success of Cha-Ching, which has now reached more than 2.7 million students in elementary schools nationwide and is available for free at: www.cha-chingusa.org.
Associates with Jackson National Life Insurance Company, who enthusiastically volunteer to teach the JA Our City program in schools, see the benefits. When they volunteer, they gain a new appreciation for what educators see daily. Students come from all walks of life and finding common ground is essential for learning. Generating classroom discussions about how to use money, engages every student. JA’s hands-on activities make learning fun and memorable, so the experience lives on long past the classroom lessons. JA volunteers help influence a generation of students who understand how money works and are ready for success.
Behavioral research tells us money behaviors are rooted in childhood experiences. Money-smart kids become money-smart adults. When parents, educators, nonprofits and the private sector all work together, there is tremendous potential to increase financial literacy and help ensure the retirees of tomorrow achieve financial freedom so they can live the lives they want and deserve.
Consider all we could accomplish through additional partnerships between businesses in the financial services industry and nonprofits like Junior Achievement. There’s also great opportunity for financial advisors, insurance providers, and others to get involved in personal financial education programs at schools in their local communities.
The benefits of this are far reaching — if we can help kids avoid futures marked by the financial uncertainty that affects so many Americans today, we can create a ripple effect that will build stronger communities for us all.
Jack Kosakowski is president and chief executive officer of Junior Achievement USA.
Danielle Robinson is assistant vice president of corporate philanthropy at Jackson National Life Insurance Company and executive director of the Jackson Charitable Foundation.