Could Financial Literacy Be the Key to a Resurgent St. Louis Economy?

Much has been said about the struggles endured by America’s old industrial cities in recent years. Technological advances, increased dependence on foreign labor and the Great Recession have left these cities – St. Louis included – shells of their former selves, according to many. St. Louis has, in fact, lost about 63% of its population since its 1950 peak, and it currently ranks as the 51st best major U.S. city to find a job, according to a recent WalletHub study.
That all might seem rather gloomy, but there is actually good reason for a great deal of optimism when it comes to St. Louis’ economic future.

For starters, despite the fallout from the Michael Brown shooting, the city’s economy is showing signs of improvement borne from resurgent revenue, declining government costs and an influx of new jobs. What’s more, St. Louis residents have a distinct opportunity to improve their financial situation by doubling down on financial literacy. WalletHub ranks Missouri as the 32nd most financially literate state in America, largely due to a relatively low number of people with a rainy day fund, a high number of people who spend more than they make, and a general distrust of the traditional banking system. Missouri has the 15th most unbanked consumers per capita and the 14th highest non-bank borrowing rate.

Sure, internalizing the importance of 1) sustainable spending habits, 2) saving money in an FDIC-insured bank account and 3) responsible borrowing is an admittedly painful process. Changing habits is never easy, especially when it involves redefining luxuries and necessities. But it will revitalize your personal finances and is therefore well worth it.

It also bears mentioning that reinforcements are on the way. The financial illiteracy of young people in this country is bordering on an epidemic, according to researchers, most of whom stress the importance of incorporating money management into public school curricula as early as kindergarten.

“Financial literacy in today’s world is almost as important as learning to read and write, and one could argue that a student’s credit history is far more important to his or her future than grade point average. Yet most students leave high school ill-prepared to manage their money,” Jennifer Collet, president and CEO of the Missouri Council on Economic Education, recently told WalletHub. “The logical deployment vehicle for training is the schools since the target audience is, for the most part, captive. States can improve financial literacy by mandating a rigorous K-12 personal finance curricula and providing support to districts and teachers to implement the programs.”
St. Louis and the rest of the Show Me State are ahead of the game in that regard. Researchers at Champlain College recently analyzed state policies as they relate to financial education, and they found that Missouri has one of the best programs in the country since it, “Includes personal finance topics in the state’s K-12 instructional guidelines, requires local school districts to implement these standards and requires financial literacy instruction as a high school graduation requirement.”

The presence of increasingly financially literate young people means that St. Louis’ national stature should gradually rise over time. There may be more immediate benefits as well, thanks to some trickle-up learning.
“Parents can learn a lot from what their kids are learning about financial literacy in school,” says Russ Goeltenbodt, former financial literacy specialist for the Illinois Student Assistance Commission. “Many of the parents have horrible spending habits.”

So, let’s focus up on financial literacy and show the country what St. Louis is really made of!

Odysseas Papadimitriou is CEO of the personal finance websites CardHub and WalletHub. He previously worked as a senior director at Capital One.