Financial literacy plays a key role in combating poverty, but Illinois’ public schools lag states such as Utah, which pioneered financial literacy education, and Minnesota, which now leads the nation in financial literacy.
A growing body of research finds the more people know about managing their money, the less likely they are to fall into poverty. One study, assessing 113 countries, discovered financial literacy significantly reduced the likelihood of falling into poverty, regardless of country, income, demographics or region. Others found financial literacy gives people more options and reduces poverty.
The American Public Education Foundation’s Nation’s Report Card on financial literacy annually ranks every state on financial literacy education, arguing that “our nation is rapidly sinking into a sea of debt and financial dependency. And the crisis is growing.” Financial illiteracy contributes to accumulation of excessive debt, inadequate savings or misuse of credit cards, resulting in increased bankruptcy filings, over-dependence on government or unpreparedness for retirement.
Read more at Illinois Policy.
