This article first appeared in the Clarion-Ledger on April 9, 2016
Mississippi State University has recently hired a financial literacy coordinator for its students. The University of Mississippi's McLean Institute is working with low-income families to set up savings accounts for their children’s futures. Middle schools and high schools across the state are offering classes in personal finance funded by my TEAM, or Treasurer’s Education About Money, initiative.
In every part of this great state, educators and community leaders are drawing the connection between our state’s top position in poverty levels and bottom position in financial literacy. They are coming to the undeniable conclusion that if we’re going to lift Mississippians out of poverty, we need to teach Mississippians the critical life skill of managing their money.
The statistics are startling. Nearly half of Mississippians don’t have a traditional bank account. Almost as many rely on payday or title loans, pawnshops, and similar high-cost borrowing to pay their bills. More than one-third of Mississippians have prime credit. They are literally throwing money away month after month on high-interest payments.
This isn’t nearly as much about what to do when you get caught between a rock and hard place as it is about making the decisions that keep you from getting near that rock in the first place.
Don’t make the mistake of thinking that financial illiteracy is confined to the poorest of our residents. Study after study finds that even people who grow up with money lack many of the fundamentals of money management. Nearly two-thirds of Mississippians don’t have a rainy-day fund, no savings to take care of emergency expenses. Almost as many are either breaking even or spending more than they bring in each month.
Millennials, in particular, are at a disadvantage. The gap between the financial responsibilities expected of them and the financial skills they have to manage them just keeps getting bigger. And, according to a new Women & Wealth Survey by Regions Bank and Vanderbilt University, women — particularly those under 50 — feel significantly less confident in their financial management skills then men.
Our financial literacy problems should be a concern to every Mississippian. Not only can better financial education help to break the cycle of poverty for so many struggling families, but it can boost our state’s economic development prospects as well. Businesses looking to invest or grow in Mississippi want a work-ready workforce. They don’t want workers distracted by their inability to pay rent or keep the lights on at home. They don’t want workers from whom they must garnish wages.
Even credit rating agencies take notice of what our state does to promote financial literacy. And keeping our credit ratings strong is good for our economy. The agencies have looked favorably on my TEAM initiative. In its first year, it reached 19,000 students with 67,000 hours of instruction. And in partnership with the Mississippi Council on Economic Education, we’ve trained 555 teachers in personal finance.
But the agencies make no secret of the fact that they’d like to see Mississippi make personal finance a mandatory part of the high school curriculum. In states that have done so, young people’s personal credit scores jumped up to 17 points by the age of 22.
The proactive approach of Mississippi’s universities and community colleges helps, too, as does the support of banks, companies, and community organizations that are part of the TEAM partnership. Together we’re empowering Mississippians to take control of their finances and become better, more productive consumers, business people and citizens.
Gov. Phil Bryant has proclaimed April to be Financial Literacy Month. There are so many ways that all of us can help Mississippians improve our financial habits. If you’re in a position of influence with children — as a parent, teacher, Scout leader or coach, for example — look for ways to not only teach personal finance skills but to model positive skills yourself.
Mississippi doesn’t have to rank dead last in financial literacy. And we don’t have to rank at the very top for poverty. We all benefit when our neighbors are on a secure financial foundation. And we can all help to make sure they get there.
Lynn Fitch is the state treasurer of Mississippi.