Financial Literacy Makes ‘Cents’

By Kevin Jackson, CPA

I hope everyone has been enjoying the fantastic weather! Your board and program associate have been working diligently to provide us with great upcoming events. We are looking forward to meeting our new members at the meetings, so please be sure to introduce yourselves!

The past month has generated many news headlines—some surprising, some not so surprising.
Continuously looming and plaguing the news headlines are our national and state fiscal crises. A July opinion from the Los Angeles Times makes note of two economic challenges. The first is that we’re in the worst recession since the Great Depression. The second is that “a growing imbalance between federal spending and revenues makes underlying fiscal policy unsustainable.” The article further states that the combined economic weakness and spending imbalance leaves us with a projected federal budget deficit of $1.7 trillion for 2009. If this pattern continues, where will our deficit be three to five years from now? (Need I mention our own state’s fiscal quandary?)

CPAs are highly attentive to cash flow and budgeting, but not everyone is aware of or even exposed to such a concept. Schools have scores of curricula on different subjects, except on personal finance. Countless students may never learn basic finance concepts that we, as CPAs, take for granted. CalPCA has passionately pressed  for promoting financial literacy and personal financial management. Several of our local members have become part of the solution by visiting local schools and educating students. The question is: How can we all be part of the solution? A simple and effective means takes as little as five minutes.

For example, my 14 year-old nephew and I made a recent jaunt to an electronics store, where he witnessed my penchant for the latest technology. Breaking away from my captive stare at the LED televisions, I remarked, “I would like to have this now, but this is not in my budget, and I’ve already committed funds to my vacation and a weekend at the Laguna Seca MotoGP motorbike races.” My nephew exhibited a pensive and reflective look for some time, then he followed with, “You could buy this television and forgo your trip Laguna Seca weekend and vacation, but I think you’ll enjoy those trips much more than the television.” He was right … and the televisions are coming down in price.

What part will you play in promoting financial literacy?

This entry was posted on Wednesday, July 22nd, 2009 at 3:32 pm and is filed under President's Message. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.