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Bencini: Financial education empowers Indian youth

As a financial adviser, an active member of Women Empowering Women in Indian Nations, a mother and grandmother, financial literacy among our youth is very important to me. I have had the honor of working with tribal governments over the years, and one of the greatest issues they raise is the need for financial education among tribal members.

Every day, there are new economic opportunities in Indian country. However, to be able to take full advantage of those opportunities, a basic understanding of household budgeting, bank accounts and credit scores is necessary. This knowledge serves as the foundation for opportunities in investing, home ownership and entrepreneurial business.

Unfortunately, American Indian youth largely lack even basic financial knowledge, according to the Jump$tart Coalition for Personal Financial Literacy. During the past 10 years, Merrill Lynch has sponsored five Jump$tart studies surveying high school seniors to measure their knowledge of basic financial topics. Native students are consistently scoring among the bottom of the national high school senior population. In the most recent Jump$tart survey, completed in 2006, nearly 87 percent of Native students received a ''failing'' score, compared to 62 percent of all other students.

The Jump$tart surveys, as well as additional research sponsored by Merrill Lynch, Native Financial Education Coalition and First Nations Oweesta Corporation, a nonprofit organization that helps create Native community development financial institutions, found several correlations that suggest an explanation for student performance. In particular, researchers found that American Indian students are more familiar with basic financial principles when their parents have a higher level of education and when parents are more involved in their children's education. In addition, they found that when Native students denote higher ambitions, desires and expectations for their future, they tend to have a higher degree of financial literacy.

''Strong financial skills form the foundation of a promising future for our youth,'' said Elsie Meeks, chair of NFEC and executive director of First Nations Oweesta Corporation. ''The results of the Jump$tart Coalition survey place Native youth at the bottom of the scale when it comes to financial literacy,'' Meeks said. ''While this is not new information, this report explains in black and white what we have been fighting to change for years. We plan to use the results of this study to formulate a strategy and work together to strengthen the financial skills of Native people across the country.''

To better assist communities in Indian country, NFEC released policy recommendations in April 2007 in five key areas: strong institutional infrastructure, youth financial education, Individual Development Accounts, predatory lending, and Earned Income Tax Credit and tax preparation services. Other recommendations made specifically to federal, state and tribal policy-makers included providing adequate funding for culturally appropriate youth financial education programs and supporting Native EITC awareness campaigns.

This need for increased financial education is not only in Indian country. State legislatures across the country are taking interest in providing youth the resources to understand finance and money management. In 2004, 24 state bills, resolutions and proclamations were announced just in the first quarter, according to the Jump$tart Coalition. Congress also established a new Financial Literacy and Education Commission to organize the efforts in educating Americans.

While these measures reflect impressive progress, tribal leaders and community members must align and commit to the future of today's youth. It is proven that the path to financial responsibility and success starts in the home. While the education system has made progress incorporating financial literacy into its curriculums, no one should rely on schools alone. Parents should educate themselves so they can set an example for their children, and they should get involved in their children's education. By supporting their academic efforts, parents can help their children realize their full potential.

There is free financial education help for families. NFEC has established an aggressive program, ''Building Native Communities: Financial Skills for Families,'' that has been very successful. Merrill Lynch has developed a curriculum called ''Investing Pays Off.'' This curriculum aims to prepare young people for tomorrow by arming them with the knowledge and know-how for financial and career success. The program also exposes youngsters to learning and experiences that will encourage and motivate them to become leaders in their communities. The curriculum can be downloaded for free from philanthropy.ml.com.

The skill and the knowledge needed to make key financial life-decisions is important to raise the standard of living in Native communities and help to overcome the unique challenges facing today's youth. According to Jacqueline Johnson, executive director of the National Congress of American Indians, financial literacy has the potential to strengthen Native communities at all levels: ''Education helps to promote financial responsibility and accountability, which leads to stronger self-governance at the individual and tribal level.''

Through partnerships with Native communities and the financial services industry, we can raise the level of financial literacy within Indian country and empower our youth today and for generations to come.

Barbara Bencini is a financial adviser at Merrill Lynch, based in Wayzata, Minn., who specializes in assisting tribal governments and Native individuals with their financial needs. She was an inaugural sponsor and is an active member of Women Empowering Women in Indian Nations, and can be reached at barbara_bencini@ml.com.