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A Tribute to Financial Literacy Month

Spark Gift Team

April is Financial Literacy Month in the United States.  This yearly acknowledgement of the importance of financial literacy was made possible by Senator Akaka (D-Hawaii) through

Senate Resolution 316, passed without amendment on March 9, 2004.  This blog post is a small (spark) tribute to Financial Literacy Month.  Let’s begin with the foundations.  First question up: what is financial literacy?

What is financial literacy?

Financial literacy is the ability to read, write, and speak the language of personal finance. If words and phrases like contribution limits, Coverdell ESA, and phase outs have meaning and use to you, you are likely one of a surprisingly few number of people in the United State who has a high level of comprehension when it comes to the language of personal finance.   If you don’t feel comfortable with the phrases, the good news is that like any language, once a person understands the basic structure of the language and begins to build a vocabulary, over time and with practice, the language can be mastered.  
Financial Literacy for Teens

The U.S. News article “Why Most High Schoolers Don't Know How to Manage Their Money,”  suggests the within the United States, most teens go into adulthood without a solid foundation for how to manage their money.  Most teens do not learn about personal finance as part of most high school curriculums; and most parents do not feel a level of comfort on the topic to teach their teens.  What this leaves us is that most people do not have an adequate financial know-how to make important decisions: taking a new job, buying a home, going back to school  On a grander scale, our economy, innovation, and social change depends on the success of these key decisions.  The question then becomes: what can we do today to begin filling this knowledge gap?    

Savings bonds

Prior to the end of papers savings bonds, family and  friends gave savings bonds as gifts for graduations, weddings, and other life milestones.  In the Chicago Tribune article “Bye bye, paper savings bonds,” Ron Grossman suggests how the elimination of paper savings bond is also a loss of a tangible tool to teach children finance and delayed gratification.  Few people in Generation Z will ever remember the days of the paper savings bonds, but that reality does not stop parents’ desire to teach their children the power of investing in their own futures.

Parents don’t need to go far to find that they can start today to teach their children about investing and personal finance.  With the security and ID technologies now existent in cyberspace, parents can open bank accounts online and purchase gifts of stocks for their children by simply by sitting down together in front of a computer.  Simple as that.
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