Did your parents teach you how to write a check? Balance your checkbook? Who taught you about taking out a student or car loan? Did anyone ever teach you about how to put together a personal or family budget?
All the answers to these questions and more result in the framework needed for much-needed financial literacy in America. According to Investopedia, “Financial literacy is the ability to understand and effectively apply various financial skills, including personal financial management, budgeting, and investing. Financial literacy helps individuals become self-sufficient so that they can achieve financial stability.” And financial stability leads to less poverty and a stronger individual, family, society, and country.
For example, research done by The Brookings Institute shows a person can avoid poverty by doing three things (more stats on the three norms here):
1. Graduating from high school
2. Waiting to get married until after 21 and not having children until marriage
3. Having a full-time job
The research cites that if an individual does all three things, his or her chance of falling into poverty is just 2%. Meanwhile, they will have a 74% chance of being in the middle class.
According to povertyusa.org, in 2018, 38.1 million people lived in poverty, which according to the Federal government’s threshold, includes all those who make less than $25,700 annual income for a family of four. This isn’t surprising when, according to a Forbes April, 2018 article, two-thirds of adult Americans can’t pass a basic financial literacy test.
As the 2020 pandemic has revealed strengths and weaknesses in our health care delivery, business strategies, family relationships, government, etc., so has the pandemic revealed strength and weaknesses in Americans’ financial stability and ability to face financial challenges.
Some Americans were not prepared for the devastating financial impact of the pandemic. For example, according to a May 2019 study conducted for NPR, 40% of rural Americans struggle to pay routine expenses such as housing, food and medical bills, and 49% said they could not afford an unexpected $1,000 expense with their savings. With dismal stats like this and record unemployment, it’s no surprise that the pandemic has caused economic devastation for many American families.
Yet some people turned it in to a positive. Take for example Whitman Ochiai, a 17-year-old senior at a Fairfax County High School, thought people needed more financial education and started his Money Ed podcasts (see article). What a great use of his time and resources to make a difference for people!
Paving the way for young people like Whitman Ochiai, Syverson Strege Cofounder David Strege has devoted nearly a lifetime to financial literacy. Much of David’s distinguished work has been through the nonprofit National Endowment for Financial Education (NEFE).
NEFE champions effective financial education. They are the independent, centralizing voice providing leadership, research, and collaboration to advance financial well-being. NEFE envisions a nation where everyone has the knowledge, confidence, and opportunity to live their best financial life.
History of NEFE
NEFE launched its first financial education program in 1984 as part of the Denver-based nonprofit College for Financial Planning, which was established in 1972 as the nation’s first educational institution providing financial planning course work to professionals. For nearly four decades, NEFE has provided free, noncommercial, and evidence-based programs to help consumers better understand their finances. NEFE continues its contribution to the financial well-being movement in new and innovative ways with a focus on research that documents the benefits of financial education, providing rigorous evaluation of resources, and informing providers about the ecosystem that impacts financial well-being beyond education.
NEFE has built a legacy offering school-based and adult education programs, along with self-directed online courses, financial calculators, and research-backed quizzes. Here are a few resources from NEFE on its Smart About Money website:
Self-Directed Online Courses
More offerings from NEFE can be found at www.nefe.org.
David Strege’s contributions to NEFE, in his own words:
My initial participation with NEFE was in the 1990’s. I was teaching at the Drake University Insurance Education Workshop. They would bring in high school teachers for a week to teach them more about insurance and provide them continuing education. I was brought in one day each session to provide instruction on how to teach personal finance to high school students. I provided an overview and introduced them to the NEFE high school materials which they could use at no cost.
I met some great people serving on the national boards of the Financial Planning Association and the CFP (Certified Financial Planner) Board of Standards. One of them was Joe Votava, who nominated me as a possible NEFE board member. I was very interested in serving on this board. My personal rule has been to only serve on one national board and one local board at a time. At the time, I wasn’t serving on any national boards and I knew about NEFE’s showcase program and the high school materials they provided at no cost to any high school teacher who wanted to use them. This board role is nirvana for me as NEFE has a great mission and there are NO members or certificants to coddle and appease.
I joined the board in 2013 and served on many committees, mostly focusing on investments and governance. I was honored to be selected as chairman in 2018, then served as chair emeritus in 2019. I extended my board service into 2020 and 2021. As chairman, I led the effort to hire a new president and CEO to replace the one who was retiring. I had served in a similar role with the CFP Board in hiring Kevin Keller who is the longest serving CEO in its history. I finally led the effort to have the NEFE board accept the Policy Governance model which I have seen work so well in other for-profit and nonprofit organizations.
I have used the NEFE high school materials to help educate the older youth at Wildwood Hills Ranch about personal finances. This ties in to my personal philosophy on helping people become great stewards of their resources. I find great fulfillment in providing good, unbiased, free information about money management to everyone who will take the time to learn and apply it.
In addition to NEFE, David multiplies his efforts in the area of financial literacy through his work with the Iowa Jump$tart Coalition, whose mission is to improve the personal financial literacy of all Iowans. David was also a featured author in the Financial Advisor Magazine outlining the societal benefits of financial literacy. Click here to read his article.
We can all be involved in financial literacy to one degree or another. Consider teaching good savings habits to your children or grandchildren, improving your own spending and budget habits, or helping your children understand the risks and cost of credit card debt. Learning to be wise stewards of your money will not only help your personal financial situation, but allow future generations to benefit from your efforts.