Tackling financial capability for young adults
by. Fatemeh Fakhraie
In March of this year, the President’s Advisory Council on Financial Capability for Young Americans (PACFCYA) met for the first time. Even though Financial Literacy Month has been around officially since 2003, this council’s meeting is a pretty big deal because of its updated mission that focuses specifically on young people. It’s right there in the name: Financial Capability for Young Americans.
Why is this important? Financial literacy is something Americans have struggled with for decades, but unprecedentedly high student loan rates and high unemployment rates for young adults have created a dire financial situation for both millennials and the economy. Which is why the phrase change to “Financial Capability” from “Financial Literacy” means so much: young adults need the tools and education to reach their financial potential, not just pay their bills on time or create a budget to keep their heads above water.
Ted Beck, President and CEO of the National Endowment for Financial Education, warned USA Today that millennials who never have a chance to “get in the economic mainstream” will feel the effects of economic disadvantage long-term: “If you never get into the whole U.S. economic system because you’ve been held back by too much early debt … we could have a lot of people who just never really come anywhere near their potential.”
Potential is key. Millennials are hopeful about things getting better for their generation, and PACFCYA’s mission aims to help make things better financially through a combination of education and regulation. We’ll be interested to see what steps the council recommends.
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