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Preparing Young Adults for Financial Success in the Working World

Linda Rimer and Mark Bearfield

 

While many students are preparing for back to school, there are also recently graduated students, 2 million in fact, that are now learning how to navigate life after college: socially, professionally and financially. An estimated 69% of new Texas graduates will start out with the looming hardship of paying off student debt as they launch their post-college lives.* So while they may have immersed themselves in computer engineering, business and political science, few have earned high marks on what is likely their most immediate and toughest test: their financial burdens.

 

With millions of young adults starting their professional lives and those living paycheck to paycheck, we are reminded that we must arm people with resources and knowledge to set them up for financial success. It’s critical that the public, private and nonprofit sectors join forces in helping better manage student debt and find solutions to financially empower and strengthen the next generation. But, how do we help new professionals be more financially knowledgeable?  Research has shown that arming children throughout their K-12 years with personal finance knowledge helps them emerge as more independent, responsible adults who are better prepared to make wiser financial decisions and have a better economic well-being – particularly as they enter the workforce.

 

Through our efforts to help youth build a foundation for making responsible, life-long personal finance decisions, Junior Achievement of South Texas and Bank of America have partnered over the past seven years to educate middle and high school students with the basics in personal finance, including budgeting, investing and managing risk. More importantly, we reinforce how this can have an impact on their future and insert students in real-world scenarios relevant to the stage in their life with real financial decisions and experiences.

 

A 2013 evaluation highlighted that these efforts are doing just that. Approximately 52 percent of students who participated in a Junior Achievement program reported an increase in practices related to financial goal setting into early adulthood.

 

In one example, former Junior Achievement student Yesenia, who is now in her thirties, found a love for economics through the lessons, but for her, the best part was learning about financial topics focused on investing and personal finance management as she watched her mother struggle to make ends meet. By learning the value and importance of creating a budget through Junior Achievement, she got herself through law school and today is a successful lawyer in Dallas.

 

Through our years of collaboration that involves both financial and hundreds of hours of volunteer support from bank employees giving their time to teach financial literacy classes, Bank of America and Junior Achievement have come together so that young people can learn to be better prepared for the financial challenges and opportunities of tomorrow.

 

Supplementing Junior Achievement’s teaching, Bank of America also offers on-line tools and tutorials through BetterMoneyHabits.com, partnership with on-line educator Sal Khan and Khan Academy. Like Khan Academy, Better Money Habits simplifies intimidating topics. It helps users create action plans for getting out of debt or managing cash flow.  Both of our ongoing efforts with other local non-profit partners has provided great insight into some of our community’s and young peoples’’ greatest financial challenges and the hurdles they face in trying to take action, particularly when they enter the working world.

 

We learned that many people living paycheck-to-paycheck are just trying to stay afloat; that many are working long hours or are single parents; that often times they don’t seek out help until they are facing a crisis, and they learn best by doing – so they want information that is relatable, credible and relevant to their immediate financial situation. Most importantly, they prefer to receive financial education from sources that they trust, such as non-profits, community organizations and financial coaches. In fact, 74 percent of Junior Achievement participants agreed or strongly agreed that Junior Achievement was relevant to their future and real life.

 

This is why our work together is so critical. We need to prepare young people for future financial success by reaching them when they are still in school with fundamental financial concepts and continue to support them at every stage of their financial lives.

 

There is no doubt that this issue will be critical for the next generation, but let’s agree that we will continue to think about how we as public and private sector leaders can work together on giving young people better, brighter financial futures.

 

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Mark Bearfield is Senior Vice President, Global Commercial Banking for Bank of America Merrill Lynch in San Antonio and a Junior Achievement of South Texas Board Member

 

Linda Rimer is President of Junior Achievement South Texas

 

* Source: The Institute for College Access and Success

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