- A new survey from the National Endowment for Financial Education finds that nearly 9 in 10 (88%) Americans say the COVID-19 crisis is causing stress on their personal finances.
- Financial literacy cannot predict or remedy a crisis, but financial education will play a pivotal role in the economic recovery of our country.
Throughout April we commemorate Financial Literacy Month, a time to recognize the work of our field, celebrate our colleagues and partners, and highlight research and educational resources that serve a benefit to all Americans. But this year is not business as usual. Our community now must question our purpose and the role we will play in the future.
The COVID-19 outbreak is an unprecedented event, and conditions are evolving quickly and changing daily. Yet we have seen a pivot within our community of financial educators and advocates to keep services available to teachers and learners, as well as developing plans to respond to the millions who will need financial education as they work toward recovery. And the need will be great.
A new survey from the National Endowment for Financial Education (NEFE) finds that nearly 9 in 10 (88%) Americans say the COVID-19 crisis is causing stress on their personal finances. More than half (54%) say they’re worried about not having enough saved, while almost half (48%) are worried about their ability to pay bills.
With news that 1 in 10 Americans is now seeking unemployment benefits, it’s clear that worry about job security is escalating. The NEFE survey finds that 28% say they’re stressed over their job security. Three-quarters of Americans are taking steps to adjust their finances due to the outbreak. And two in five note they have cut expenses — 26% are putting off major financial decisions and 22% have increased contributions toward savings.
Additionally, the outlook for personal finances a year from now is proportionately low. Two in five say they’re “very/somewhat worried” about what their financial situation will be 12 months from now, compared to one in three who are “very/somewhat optimistic.”
This crisis has revealed many fault lines in our country. Far too many people are facing real hardships: Health-care professionals are on the front lines going into combat daily, teachers and parents are navigating the transition to virtual learning environments, and workers whose financial and personal survival is couched in the gig and hourly-wage economy are struggling.
Reflecting on the pandemic, questions arise as to what role financial education plays in preparing people to face economic challenges, how it increases confidence to manage money during a crisis, and how it can lead to recovery as quickly as possible.
Financial education has many proven benefits, but it alone is not enough to foresee economic challenges nor remedy a crisis. Alternately, leveraging the coronavirus outbreak to demonstrate the ineffectiveness of financial education and blaming the individual for not having emergency savings or financial resources to get through this is irresponsible.
Everyday people should not be made the scapegoat when we are living in an ecosystem that is systematically selective. And certainly, Financial Literacy Month 2020 is not the time to advertise a promotional ideology. Information is helpful as many may need to make quick decisions, but alone will do little to slow a free fall or propel finances toward normalcy.
Financial education will, however, play a pivotal role in the economic recovery of our country.