The Washington PostDemocracy Dies in Darkness

Opinion Marylanders would benefit from real economic education

4 min

Ramon Looby is president and chief executive of the Maryland Bankers Association. Julie Weaver is executive director of the Maryland Council on Economic Education.

To improve financial resiliency and build a brighter and more prosperous future for our children, the time is now to support expanded access to financial education for all students in Maryland.

In its latest state-by-state survey, the American Public Education Foundation gave Maryland a C grade for its stagnant implementation of financial literacy standards in schools. Unfortunately, this mediocre evaluation did not come as a surprise for many Maryland parents with school-age children. Despite being widely supported by parents and students, only eight of Maryland’s 24 public school systems have financial literacy graduation requirements mandating that students complete a financial literacy course before graduating from high school.

When someone understands financial wellness and possesses the tools to navigate the financial marketplace, they have the skills and knowledge necessary to make educated and effective decisions about their money and financial goals. This includes personal financial management, budgeting and investing. Knowledge equals wealth, which equals financial security. Any barriers that prevent students from accessing valuable information about personal finance are most certainly detrimental to their financial future. Schools can break down those barriers by providing equal learning opportunities.

One major consequence of financial illiteracy is bad credit. A good credit score is often required to secure housing and access to lucrative careers, particularly here in Maryland where jobs in government and defense can offer a lot of economic mobility. Loading up a credit card and running into debt at a young age can lock people out of job and homeownership opportunities that cost them hundreds of thousands of dollars over a lifetime.

According to Standard & Poor’s Global Financial Literacy Survey, the United States ranks 14th based on the proportion of financially literate adults. The National Financial Capability Study by the FINRA Investor Education Foundation found that nearly half of adults in Maryland lack a rainy-day fund, and only 32 percent can provide correct answers to a basic five-question financial literacy quiz.

For many underserved communities across the state, including Maryland’s substantial immigrant population, the lack of financial education makes them particularly vulnerable to economic downturns. Millions of American families have already found it harder during the coronavirus pandemic to balance their budgets. This task is almost impossible for those without a bank account or a solid understanding of how financial institutions, including banks, can be used to help them remain financially secure. With the world moving toward a digital economy, not having a bank account can limit a person’s ability to purchase essential items needed for survival.

Financial education — one of several solutions to helping our communities make better financial decisions — should begin at a young age. Research suggests that most families lack the skills or the time to teach their children about financial wellness and provide them with the tools to navigate the marketplace. It is imperative to introduce the foundations of personal finance early in a school setting, the same way we do with other subjects.

Knowing how to dissect a frog might prove most helpful for future biologists and veterinarians. But understanding the importance of saving, interest rates, budgeting and the benefits of compound interest is vital for all graduating high school seniors.

Proposed bills in the Maryland General Assembly aimed at improving and mandating financial education in our schools call on the State Department of Education to create a semesterlong financial literacy course that could be offered in all public high schools in the state. Sadly, these bills are not likely to succeed.

Imparting basic financial skills that promote financial wellness to our children is one of the most important things we can do to help ensure that they live a financially secure life.

Maryland’s policymakers should seriously consider prioritizing expanded access to financial education in Maryland’s public schools. Doing so would put our children on a path to a more equitable and stable future. That is something we should all agree on.