A task force on financial literacy is raising an alarm about how little Vermonters know about managing their money.
The group has issued an action plan that calls for better financial literacy education for both children and adults.
According to the Financial Literacy Task Force at Champlain College, more than two-thirds of Vermont’s high school graduates aren’t financially literate. Yet, they report, young people face key decisions about money more than ever.
One of the most important financial decisions young Vermonters have to make is whether to go to college, which can have a significant impact on future earnings.
John Pellitier, director of Champlain College's Center for Financial Literacy, says that once in the job market, young workers are faced with more tough decisions – including how to save for retirement.
Pellitier explains, “you’ve got to have the discipline to put it aside and you need to almost become a portfolio manager [and ask yourself], what am I going to invest my money in?”
The Financial Literacy Task Force says 47 percent of Vermonters have subprime credit.
He says credit ratings have also become increasingly important for young workers. The Financial Literacy Task Force says 47 percent of Vermonters have subprime credit.
“That means you’re paying more for credit card debt, that means you’re paying materially more for your automobile loans, for your mortgage,” says Pellitier.
Some employers even use credit ratings to make hiring decisions.
Pellitier says the decisions young people face early on underscore the importance of teaching financial literacy in our schools, which is a focus of the task force action plan. It explains that just seven of Vermont’s high schools have a personal finance requirement as a condition for graduation.
"If you're a high school student trying to learn about personal finances or your parents want you to learn about it, there isn't even a course offering." - John Pellitier, director of Champlain College's Center for Financial Literacy
The task force’s action plan calls for updating the state’s education standards to include specific benchmarks for financial literacy, and providing K through 12 educators with the training to teach the standards.
Pellitier says that while many schools offer personal finance as an elective course, up to a third of Vermont’s high schools don’t offer any courses on the subject.
“If you’re a high school student trying to learn about personal finances or your parents want you to learn about it, there isn’t even a course offering,” says Pellitier.
The task force also recommends creating more opportunities for adults to learn how to better manage their finances, suggesting that the state establish a commission to help improve financial literacy for all Vermonters.
