Op-Ed: What Millennials, Gen Z Need to Succeed Against the Economic Odds

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At its heart the American Dream is a promise of progress — that each generation will have more opportunity for prosperity than the last. In the post-war era, parents were virtually able to take it for granted that their children would go further and do better than they had. However, the one-two economic punch of the Great Recession and the pandemic have put this promise in peril for millennials and Gen Z. In the face of these major economic setbacks, a real-time reordering of the American economy, and recent headwinds like high inflation, younger Americans will need to be more financially savvy to succeed.

Right now, too many young Americans lack the fundamental knowledge needed to navigate such treacherous financial waters. According to the Milken Institute, only 57% of Americans are financially literate. A 2018 assessment of 15-year-old students found that 16% were below a proficient level of financial literacy and only 22% demonstrated a basic level of financial literacy.

This lack of knowledge leaves young people unprepared at just the time in life when many of them are facing their first major financial challenges. In 2021, the average student loan debt was $37,693, with student loan debt the second-highest consumer debt category — second only to mortgage debt. Additionally, the average credit card debt for young people under the age of 24 was $1,963 last year.

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As we enter Financial Literacy Month, we must recognize the need for more financial education in schools and among young adults. An important first step is for states to recognize the need to mandate financial literacy courses in schools, so the youth of America is equipped with tools to prepare them for economic growth, stability, and opportunities after their graduation.

By mandating financial basics classes as a requirement to graduate high school, we can ensure that students will enter the workforce and higher education programs with a strong platform of basic financial knowledge, including how to balance a checkbook, complete a loan application, do taxes, participate in lessons on interest rates, follow state and federal laws, and discover ways to save and invest.

Thankfully, there are already bipartisan steps being taken to enact legislation to support financial literacy in high schools. Over 100 financial literacy bills have been introduced across 40 states in the last two years. In June 2021, Rhode Island Governor Dan McKee, a Democrat, signed a bill into law that requires all students at public high schools to pass financial literacy classes for graduation. This month in Florida, Republican Governor Ron DeSantis passed the Dorothy L. Hukill Financial Literacy Act. High school students will be required to earn at least one-half credit for instruction in financial literacy or money management. Florida is only the seventh state to require a standalone money management course. Standalone financial literacy courses are imperative as we cannot effectively teach personal finance in a condensed form and expect momentous results. Students must be provided the time and resources to engage in real-world experiences.

In trying and uncertain economic times, financial literacy and education can make the difference between having a strong foundation for prosperity or feeling helpless in the face of forces beyond one's control. It is imperative that state legislators on both sides of the aisle continue to pass legislation that fosters financial literacy, specifically in underserved communities that traditionally lack the resources for young adults to develop lifelong habits necessary for financial success.

—By Heidi Heitkamp, former U.S Senator, North Dakota, and the founder of One Country Project.

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