James Harden of the Philadelphia 76ers is aiming to make it in game five of the Eastern Conference first round on April 25, 2022 against the Toronto Raptors.
Tim Nwachukwu | Getty Images
For NBA player James Harden, fostering financial literacy among young adults is personal.
Harden, a point guard and shooting guard who recently signed a two-year, $68.6 million contract with the Philadelphia 76ers, recalls being a 20-year-old rookie in 2009 with a suddenly substantial salary. A first-round draft pick — third overall — he had just signed a two-year, $4.76 million contract with the Oklahoma City Thunder, according to Spotrac.com.
“They want to buy everything,” Harden told CNBC in a phone interview. “And you deserve it, so you buy your first car, your first house or something.”
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But Harden had to find out about money matters on the fly.
“For me, it was learning not only how to save, but how to invest wisely,” Harden said. “You may have money in a bank account or in savings, but to live long your money needs to work for you while you sleep.
“That’s something I learned.”
Harden’s non-profit organization covers the cost of the e-course
To reach young adults who might benefit from learning about money matters, Harden’s Impact 13 Foundation is working with financial advisor Jordan Awoye, managing partner of Awoye Capital in Babylon, New York, to undertake a “Financial Education Tour.” .
The initiative includes liaison with various colleges, where Awoye meets small groups of students to talk about life and finance, and gives them access to an e-course on personal finance to take at their leisure. Through grants, Impact 13 covers the $795 cost of licensing the e-course developed by Awoye, which covers topics such as budgeting, debt, credit and investing.
“I think just coming from where I’m from and where I’m at now — making it into the NBA, being there for 14 years and seeing how money is handled — it’s more than necessary, Jordan and.” Allowing people like me to explain and show how to manage money,” Harden said.
The NBA star might surprise some of the seminars, said Awoye, who has visited six institutions as part of the tour – including Towson University in Maryland and Norfolk State University in Virginia.
Research shows that understanding how to manage money makes a difference. According to a study by the FINRA Investor Education Foundation, people who scored above the median on a seven-question financial literacy quiz were more likely to make ends meet than those whose money savvy was more limited.
For example, those who scored higher on the quiz spent less than their income (53% vs. 35%) than those who did less well, and they saved three months’ worth of emergency funds at a higher level (65% vs 42%). . They were also more likely to have undertaken some future planning by calculating retirement needs (52% vs. 29%) and opening a retirement account (70% vs. 43%).
Because many of the nation’s youth are reaching adulthood with a lack of knowledge about money matters, some state legislatures have passed legislation requiring public school systems to teach personal finance. According to Next Gen Personal Finance’s 2022 State of Financial Education Report, 15 states guarantee or have committed to guarantee that all high school students receive a self-contained personal finance course. Other states have integrated the curriculum into another class (e.g. economics) or offer it as an elective. Still others have no personal financial need at all.
Meanwhile, Americans shoulder $890 billion in credit card debt, which comes with interest rates averaging more than 18%. Additionally, according to a Bankrate survey, 56% of US adults would not be able to cover an unexpected $1,000 bill with accumulated savings.
In other words, there is a lot of room for improvement when it comes to financial literacy.
For Awoye, his interest in expanding financial literacy is “if only I knew then what I know now,” he said.
“As I began to thrive in wealth management, helping with financial education really became my mission,” Awoye said.
“If we can pass that on to the next generation, everyone will be better off,” he said.