In its 2019 study on nationwide educational achievement, personal finance website Wallethub ranked Oregon as the 13th most educated state in America. It's an impressive statistic of which Oregonians should be proud. And yet, for all the factors that Wallethub considered in its definition of Oregon as an "educated" state, there is one critical component of education the study failed to include: financial literacy.
What is financial literacy?
Financial literacy is a measure of one's ability to make smart, informed decisions regarding one's financial wellbeing. Setting financial goals, creating and following a budget, and saving for emergencies are just a few examples of financially literate behavior. And though these things may seem like common sense to some, a shocking number of Oregonians are in the dark when it comes to these decisions.
In 2018, the Financial Industry Regulatory Authority (FINRA) conducted their National Financial Capability Study, which measures financial capability of the residents of each state in the country. The results of this study demonstrate that financial literacy rates in Oregon are on the decline:
- When given a five-question assessment of their overall financial literacy, 62% of respondents were unable to answer more than three correctly.
- Only half of all Oregonians possess a “rainy day fund,” meaning they don’t have enough money saved to cover three months of expenses.
- 36% of Oregon residents are not saving any money each year, and 19% of residents spend more than they earn.
- 35% of Oregonians are only paying the minimum monthly payments on their credit cards
- 29% of Oregonians have engaged in non-bank borrowing within the past five years, such as taking out an auto title loan or a payday loan, or using a pawn shop or rent-to-own store.
These outcomes could be prevented through simple financial education, but there is a notable lack of financial education opportunities in Oregon. This lack is fostering a culture of indebtedness, and the effect of this deficiency on our communities is dire.
Financial Literacy Resources Are Scarce
Although the Oregon Department of Education technically requires students to graduate high school with a detailed understanding of personal finance, they have been unable to provide teachers with financial education curriculum, and they do not currently test students to assess whether or not they are meeting these benchmarks. As a result, very few Oregon schools provide financial education for their students. Though the connection between financial education and financial literacy is made clear by FINRA's 2018 study, students are leaving Oregon schools without the financial education they need to prepare them for financial independence.
The Oregon Department of Consumer and Business Services and the Oregon Savings Network consistently champion financial education efforts. Still, though, for most government agencies and community-based organizations, the time commitment and financial investment required to create a financial education program are significant, and often prohibitive. For most Oregonians, then, it's up to them to seek out the knowledge necessary to take control of their financial futures.
What can you do about it?
The incentive to improve the financial literacy of our communities is certainly there. Individuals and families exposed to financial education opportunities are more likely to save for emergencies, have stable credit, and avoid predatory financial services like automotive title loan and payday advance lenders (like avoiding a craigslist scam that many have fallen victim to).
So, clearly, we need to be connecting Oregonians with financial education opportunities.
On Friday, October 11, that opportunity will arrive in the form of Financial Beginnings Oregon's 2019 Financial Literacy Conference. Designed for educators, nonprofit and government leaders, and community members, the conference is an opportunity to learn about financial education efforts in Oregon, and increase your own financial literacy. Featuring a series of panels and presentations delivered by financial education thought leaders and experts, attendees of the conference will learn about the critical importance of financial education, and they will leave with tools and resources that will help them better manage their own finances, and contribute to financial education efforts in their community.
Past conferences have galvanized hundreds of attendees from across Oregon to get involved in financial education efforts. Following the 2017 conference, over 90% of attendees reported that they had taken action to bring financial education opportunities to the communities with whom they work. Many had even gone so far as to teach financial education lessons themselves, using resources and lessons learned at the conference.
Attendees of this year's conference should expect the same results, leaving with a better understanding of the need for and importance of financial education, and a roadmap for bringing financial education opportunities to the communities they serve.
Financial Beginnings Oregon's Financial Literacy Conference is happening Friday, Oct. 11 at Canby High School, 8 am – 4 pm. It is a conference open to anyone trying to make a difference in their community through financial education. You can register here or visit finbegor.org to learn more about the organization.
Sponsors for this year's conference include: Department of Consumer and Business Services, Division of Financial Regulation, USBank, Bank of America, Columbia Bank, Heritage Bank, OnPoint Community Credit Union, Northwest Credit Union Foundation, State Farm, Umpqua Bank.