Lack of financial education could hurt Mass.
A lack of access to the tools and information necessary for economic success is a problem facing people throughout the state, according to a report recommending a widespread effort to educate Bay Staters of all ages about personal finance.
The report from the Massachusetts Financial Literacy Task Force, convened by Treasurer Deborah Goldberg, says that Massachusetts has fallen behind other states in providing financial education, which could ultimately hurt the state's economy.
"We cannot overstate the importance of the task at hand," the task force concluded. "Poor access to financial education will continue to prevent residents and families from advancing their economic standings. This has the potential to impact the growth of our state's economy, and could prevent the Commonwealth from remaining globally competitive."
The plan includes recommendations specific to K-12 students, college students and the adult population, as well as overarching recommendations. The task force calls for a public financial education awareness campaign and the creation of a "one-stop, comprehensive online portal" to provide educators and policymakers with information on available programming and data.
Noting that young people who do not understand money management may struggle to invest and save wisely later in life, the report calls for research to assess the current level of personal finance instruction in Massachusetts schools. It also suggests connecting teachers with financial education teacher training and professional development.
At the college level, the task force found students and families often inadequately plan ahead, lack guidance on choosing a school and preparing to pay for it, and struggle with understanding loan options.
The report recommends launching a for-credit pilot program at the state's public colleges and universities, which would offer students "essential information on how to finance college and meet long-term financial goals after graduation."
Adults often find themselves diverted from their own money goals, as they balance supporting aging parents and financing children's college education, according to the report.
The report found low- and moderate-income households, women, first generation immigrants, veterans and seniors all face additional challenges managing finances, and recommends targeted services and trainings for those groups.
"Today, families and residents in our state are struggling to navigate an increasingly complicated financial environment," the report reads. "Across the spectrum, people from various backgrounds are having trouble managing their money, paying for college, saving for retirement and reducing their debt."
Data cited in the report say that Massachusetts is one of 12 states that does not require schools to offer financial education courses, while portions of the adult population face financial challenges including high student loan debt and economic insecurity.
More than 35 percent of the state's households would not be able to cover their basic living expenses for three months if they stopped receiving income, and 63 percent of senior households are considered "economically insecure," the report says.
Massachusetts ranks the 11th highest in the country for average student debt per borrower, with 65 percent of Bay State students in the class of 2014 graduating with an average debt of $29,391.
"There is clearly a need to equip residents with the tools they need to achieve financial stability and avoid potential future economic catastrophes," the report says.
The 22 recommendations are the result of approximately 600 hours of work over seven months, Financial Literacy Task Force Chair Barbara Anthony wrote in the report.
"Some of these recommendations will take time to implement and evaluate, but there are many steps that can be taken right away," said Anthony, a former undersecretary in the state Office of Consumer Affairs and Business Regulation.
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