Financial Literacy Month in April is a great opportunity to illustrate why a financially literate population is so important for a healthy state economy. In fact, the more residents learn about financial literacy, the greater likelihood Michigan will become a top 10 state economically.
“Financial literacy” is generally defined as having the ability to successfully use various personal finance skills such as financial management, budgeting, debt reduction and retirement planning.
People with competent personal finance skills have a better chance of landing a good-paying job, which in turn creates a more sought-after workforce for prospective employers looking to locate in Michigan. Financial literacy also is essential for people who want to start small businesses in Michigan and grow jobs.
But being financially literate can be daunting. Americans owed over $800 billion in credit card debt as of early 2022, according to annuity.org. And 75% of American teens lack confidence in their knowledge of personal finance.
To help young people properly manage their finances, Gov. Whitmer signed bipartisan legislation last year to require personal finance education as a prerequisite for high school graduation. Students entering ninth grade in 2024 will need to successfully complete a half-credit personal finance course as a high school graduation requirement.
Michigan’s new law will help protect young people from future financial struggles while improving our state’s overall economy. And it is important to recognize that these two issues are intrinsically linked together. For example, it’s no coincidence that Michigan ranked as the 15th most financially literate state in the country while also ranking as the 15th best economy.
By improving our state’s financial literacy, while also reducing regulations and taxes, and investing in our infrastructure, Michigan can take real steps to become a top 10 state once again.