Financial Education Can Reduce Poverty And Help Americans Escape Its Cycle

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Multi-generational poverty negatively affects every aspect of the American economy. Real Intelligence CEO Jeff Mount says financial literacy education helps break the cycle of poverty.

Financial Literacy

“Financial literacy is probably the least recognized educational topic,” says Mount. “The education system has ignored this very critical topic for generations due to their commitment to the basics: math, science, literature and history."

The legacy of multi-generational poverty among American families is reaching worrisome levels. Multi-generational poverty is defined as a family having lived in poverty for at least two generations. According to the 2018 U.S. Census, 38.1 million Americans live below the poverty line while a survey conducted by the American Payroll Association found that 74% of the population is living paycheck-to-paycheck.(1)(2) People trapped in a cycle of generational poverty are focused on surviving day-to-day, not planning for the future but tackling their current situation. Jeff Mount, CEO of Real Intelligence LLC, says this can lead to a feeling of pessimism and loss of hope for the future.

“Growing up in a lower middle-class household, I was constantly told I would never be able to achieve much,” Mount said. “Never be able to be a competitive athlete, never be able to attend a great college, never be able to own my own business, never be able to retire. Children in lower and lower-middle class neighborhoods hear this constantly.”

In addition to feelings of hopelessness about the future and the everyday stress of how to pay the bills, people living in poverty often face more health problems due to excessive stress and lack of access to decent health care.(3) Reducing the overall rate of poverty can benefit Americans at every economic level as high rates of poverty cost the U.S. economy more than $500 billion annually in lost productivity, increased health care costs and higher criminal-justice expenditures.(4)

Financial and educational experts say that one way to break the cycle of multi-generational poverty is through education.(5) Not only are states like North Carolina and New Jersey planning to include financial literacy as part of their must-pass-to-graduate curriculum this year, international policy makers have issued a worldwide call to action for more financial literacy for the most vulnerable people in our society.(6)(7)(8)

“Financial literacy is probably the least recognized educational topic,” says Mount. “The education system has ignored this very critical topic for generations due to their commitment to the basics: math, science, literature and history. But financial literacy is incredibly important: it affects enormous life decisions that can impact the lives of others – in either a really positive or detrimental way. When was the last time you heard of someone negatively impacting another’s life because they failed an algebra test?”

The consequences of a lack of financial education can be devastating, according to a poll by the National Financial Educators Council, Americans estimate they lost an average of $1,279 in 2019 due to a lack of financial knowledge. The losses can come from increased risks such as bank fees, high credit card and loan interest rates and losses on investments.(9)

In states that require financial literacy in high school, the average credit card debt is lower and young adults haver higher credit scores and lower loan default rates than those in states without the educational requirements.(10)

While sound financial education can make a positive difference at any time, financial investors and planners have a unique opportunity now to make a big change in Americans’ financial planning, health and education. While one-on-one discussions and meetings are essential when advising someone about their finances, apps and online programs have been shown to help individuals of all ages become financial literate.(11),(12) Some tools like Real Intelligence’s Dynamic Mapping financial planning program can help financial planners illustrate and explain the outcomes in a more intuitive way that promotes strategic understanding.

Mount’s path to financial independence started one summer when he was inspired by wealthy clients who encouraged him to expand his vision for his life. “While working as a tennis pro right after college, I was fortunate to secure a job where the people I met encouraged me to learn how to be innovative, entrepreneurial and smart about investing for the future. I am hopeful to pay it forward with the Dynamic Map app.”

About Real Intelligence LLC:
Real Intelligence, LLC is the brainchild of entrepreneurs and industry experts Jeffrey Mount and Mike Helgesen. With 55 combined years of industry expertise and the alliance of both their AI inventions – Dynamic Mapping and training program, Essential Family Office – Real Intelligence, LLC is poised to offer a complete essential tool kit to the next generation of elite Financial Advisors. With strategic, industry-proven training, patented technology, and an unprecedented lead generation opportunity the paradigm of financial services is shifting from the current status-quo. This human-centered approach to financial planning is a consultant’s greatest tool to combat the competitive threat of free programs through robo-advisers and the dangers of irrelevancy. For more information, visit http://www.realintelligence360.com.

1.    Semega, Jessica, “Income and Poverty in the United States: 2018” United States Census Bureau, September 10, 2019, census.gov/library/publications/2019/demo/p60-266.html.
2.    Schlesinger, Jill, “Money: Why are so many living paycheck to paycheck?” Arizona Daily Star, February 1, 2020, tucson.com/business/money-why-are-so-many-living-paycheck-to-paycheck/article_00425632-d114-5eb9-a722-dca27afd7011.html.
3.    Johnson, Tonisha, “Understanding Generational Poverty” Spectrum News 1, August 13, 2019, spectrumnews1.com/oh/columbus/news/2019/08/13/understanding-generational-poverty.     
4.    Brown, Desmond, “10 Reasons Why Cutting Poverty is Good for Our Nation” Center for American Progress Action Fund, December 6, 2011, americanprogressaction.org/issues/poverty/news/2011/12/06/10771/10-reasons-why-cutting-poverty-is-good-for-our-nation.
5.    Jackson, Lauren Bringle, “7 Tips for Breaking the Cycle of Poverty” Self, March 20, 2019, self.inc/blog/7-tips-for-breaking-the-cycle-of-poverty.
6.    Lasure, Kayla, “Financial literacy class to be graduation requirement” Watauga Democrat, February 6, 2020, wataugademocrat.com/news/financial-literacy-class-to-be-graduation-requirement/article_2706ae18-d37b-5f8e-a81c-efd0154a543d.html.
7.    Epperson, Sharon and Manning, Patrick, “Teaching financial education in schools finally catches on” CNBC, February 5, 2020, cnbc.com/2020/02/04/teaching-financial-education-in-schools-finally-catches-on.html.
8.    Georgieva, Kristalina, “The Global Economic Reset – Promoting a More Inclusive Recovery” International Monetary Fund Blog, June 11, 2020, blogs.imf.org/2020/06/11/the-global-economic-reset-promoting-a-more-inclusive-recovery.
9.    “Financial Illiteracy Cost Americans $1,279 in 2019” National Financial Educators Council, January 8, 2020, financialeducatorscouncil.org/financial-illiteracy-costs.
10.    Barrington, Richard, “States Where Financial Literacy Education is Working” Money Rates, June 4, 2020, money-rates.com/research-center/financial-literacy.htm.
11.    O’Connell, Brian, “Teaching Kids Financial Literacy During the Pandemic: A Primer” The Kitchen Table Economist, June 9, 2020, thestreet.com/mainstreet/news/teaching-kids-financial-literacy.
12.    McNamee, Paige, “Briefcase babies: How financial apps are helping kids learn about much more than money” Finextra, June 10, 2020, finextra.com/the-long-read/42/briefcase-babies-how-financial-apps-are-helping-kids-learn-about-much-more-than-money.

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Karla Jo Helms
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