As state treasurer and a former bankruptcy attorney, I know that we have a financial literacy crisis in Kentucky.
WalletHub, a personal finance website, ranked Kentucky 42nd for financial literacy, and according to Credit.com, Kentucky has the eighth highest rate of bankruptcy.
The answer to fixing this crisis long-term begins in childhood. The best time to learn basic principles of saving and money management is before a person graduates from high school and enters the workforce. Studies show that children who are taught to make good financial decisions as they are growing up are more likely to make good financial decisions as adults.
Last year, I helped Luci, the daughter of a member of my staff, open her first savings account on her eighth birthday. It was an exciting day to watch her graduate from a piggy bank to a savings account. She proudly walked into the bank with her piggy bank filled with dollars and coins she had saved and deposited it all into a savings account. I observed this lesson on the importance of saving ignite a spark in Luci to save, and now she loves to watch her money grow in her savings account. Her family says she often checks her account online to see how much money she has saved. The lesson Luci learned about saving and managing money should be taught to all of Kentucky’s children.
We owe it to Kentucky students that the skills Luci is learning at home about money and savings become common, easily-accessible traits for everyone. According to the Council for Economic Education, students from states where a financial education course or program is required are more likely to display positive financial behaviors and dispositions as adults.
Students across our commonwealth need access to financial literacy lessons like Luci has had. That is why I am supporting House Bill 132. This bill would make financial literacy instruction a high school graduation requirement. It would ensure that our students are taught important financial lessons before they begin independent lives.
HB 132 is one step in addressing the lack of financial literacy in our state. Kentucky children are an important place to start, but it should not end there. I am working to partner with financial leaders and community advocates to bring opportunities for greater financial empowerment to all Kentuckians, including the elderly, low-income families, and veterans and military personnel.
The sooner we make financial literacy accessible, the sooner Kentuckians of all ages can more easily pursue greater financial empowerment.
Allison Ball is Kentucky treasurer.