Making sense out of dollars

Part of a nationwide initiative, a new MACPA program aims to boost Marylanders' financial IQ

By Richard Rabicoff
MACPA Public Relations Manager

Financial illiteracy is a growing problem for every income group in our society — and for Maryland and our nation. Consider:

The United States has the lowest national savings rate in the industrialized world.
The average family runs a deficit and is overextended on credit.
College students are running up enormous credit card debts.
On average, high school seniors correctly answer only 52 percent of the questions on finance-related tests.

"At a time when the financial world is becoming more complex, education to help consumers cope is woefully lacking," wrote Stanley H. Breitbard, chair of the California Jump$tart Coalition. Breitbard's comments appeared in the December 2003 Journal of Accountancy. "American households carry significant credit card debt, personal bankruptcies are on the rise, savings rates are declining and workers mismanage the defined contribution plans they need for retirement.

The upshot is not only a threat to America's economic stability but also to the individual and business market for CPA services.

The American Institute of CPAs recently announced a full-throttle program, "360 Degrees of Financial Literacy," with the goal of mobilizing CPAs nationwide to educate their communities about the importance of taking control of one's personal finances. Why CPAs? Because only CPAs have the in-depth financial knowledge, expertise and core values to advance financial literacy as part of their commitment to the public interest.

The MACPA is one of the first state associations out of the box in designing a game plan, developing materials and forming partnerships with local groups to promote financial literacy and reach out to a wide range of audiences in our communities.

The association's initiative has these primary objectives:

to support the MACPA's commitment to its communities and the public interest;
to enable MACPA members to contribute to their communities in a fulfilling, professionally relevant way with a reasonable time commitment;
to advance legislation in support of mandated financial literacy instruction in Maryland public schools, to help keep Maryland competitive; and
to enhance the CPA brand as the choice provider of financial insight and expertise.

A strong nucleus

The MACPA already has a strong nucleus for a successful financial literacy program in Maryland. One of the association's distinguished members, Karen Barnhouse, has been appointed to the AICPA's seven-member National CPA Financial Literacy Commission responsible for thought leadership in this initiative. Our roster of more than 90 Career Awareness Speakers statewide is poised to reinforce the theme of personal finance in their presentations. Members of the MACPA's Personal Financial Planning Committee have a clear stake in promoting the value of personal finance management. And there are countless CPAs already involved in everything from Junior Achievement to pro bono advisory services and tax preparation for lower income families.

Drawing upon its own resources and those developed by the AICPA, the MACPA will be able to equip members with PowerPoint presentations, educational materials and handouts that will enable them to address financial issues with the full range of student, family and individual audiences. Even at the large corporate level, there is room to educate employees on their own budgeting skills and the management of their pension plans.

Need a good example? Martin Auerbach, managing partner at Verkouteren, Auerbach, Olson in Silver Spring, will be teaching financial planning topics to seniors at Wilson High School in Washington, D.C. Auerbach, a former assistant professor at Howard University, hasn't taught in 20 years. But he considers the emerging financial literacy crisis reason enough to re-enter the classroom.

Friends and partners

The MACPA also is reaching out to other organizations and programs that are addressing financial illiteracy. The association is playing an active role in the Maryland Coalition for Financial Literacy, a statewide organization that serves as an information clearinghouse and advocacy center. The MACPA is one of the organizers of Financial Education Week (set for Oct. 2-9), during which CPAs can provide educational workshops, presentations or individual sessions to help consumers and taxpayers better understand personal finance. The association can leverage its solid presence in the schools and such programs as Future Business Leaders of America to take the message to Maryland's young people.

Each issue of The Statement will highlight the valued work of CPAs involved in the financial literacy campaign. From Financial Education Week in October through National Financial Literacy Month in April, CPAs will have opportunities to help their communities make sense of their finances.

And in recognition of the importance of this campaign, the association's most prestigious annual awards — the Public Service Award and the Educator Award — will go to those who have made the most significant contribution to the financial literacy effort.

Get involved!

There are numerous ways to get involved: volunteering for Junior Achievement; presenting to high school and college students; addressing consumer / taxpayer groups; pro bono planning for lower income families; and publishing articles on personal finance, to name but a few.

For more information, contact our public relations manager at (410)296-6250, (800) 782-2036, or FinancialLiteracy@macpa.org. You also may sign up at www.macpa.org/services/literacy/signup.htm.

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