The pandemic has exposed many vulnerabilities and challenges
that the United States needs to confront immediately. On a daily basis, I see
those vulnerabilities in the area of financial literacy, that is, knowledge
about earnings, expenditures, savings, investments, and long-term financial
planning. According to studies compiled
by the U.S. Financial Literacy and Education Commission, only one-third of
adults could answer at least four of five financial literacy questions on
fundamental concepts such as mortgages, interest rates, inflation and risk.
About 40% of Americans turn to family, friends, or coworkers when they have a
question about finances; to my knowledge there has not been a study about those
individuals’ expertise about financial matters; moreover, over 20% of Americans
polled by the National Financial Educators Council did not feel they had anyone
they trusted when they had a question about finance.
This economic and public health crisis has convinced me more
than ever that financial literacy education, from kindergarteners to senior
citizens, is essential to improve Americans’ standard of living and to reduce
income inequality. Not having knowledge about financial literacy topics such as
economics, interest rates, savings, loans, investments, and long-term financial
planning is a significant hinderance to economic opportunity and mobility. Lack
of financial literacy can have a devastating impact on adults’ consumer credit
scores, which influences not only ones’ ability to obtain loans and credit
cards, but also impacts our ability to purchase or rent a home as well as even
the type of employment one may be able to get. Even thinking about personal
finances makes over 50% of American adults anxious.
Despite the fact that we make decisions about money every
day, less than half of America’s states require students to take a course on
personal finance. And yet, as soon as students complete their second school
education, they go out into the world with very little knowledge about the
responsible use of credit cards, student loans, mortgages, and other types of
consumer debt, not to mention how to develop a long-term financial plan to
develop and achieve personal financial objectives.
In its biennial survey, the Council for Economic Education
shows that there has been a slight increase in states requiring at least one
semester-course in personal finance and economics in high school to graduate.
Yet, there has been a decrease in the number of states that require testing to
show whether learning objectives in those courses are being met.
No one should wait for federal, state, or municipal
governments to implement comprehensive financial literacy programs for primary
and secondary students. There are many free and commercial resources that are
available to help us equip our children and even ourselves with invaluable
financial literacy lessons.
In addition to the research that the Council for Economic
Education conducts, it also has a free treasure trove of K-12 education
resources for educators and students, including Gen i Revolution, an online
finance game for high schoolers.
One of the most comprehensive financial education online
programs, which is free, is the St. Louis Fed’ Economic Education Program. The
Fed’s EconLowDown has over 400 free courses in English and Spanish for students
from Kindergarten all the way to college. The modules are created by economics
and education professionals at the Federal Reserve Bank of St. Louis as well as
by professionals at the Atlanta, Chicago, Cleveland, Kansas City, New York and
Philadelphia Federal Reserve banks. There are also resources from the Federal
Reserve Board, U.S. Currency Education Program and the FINRA Foundation. In
addition to courses for students, the Federal Reserve district banks also have
resources for teachers’ professional development on the page links above. For
many years, the Federal Reserve Bank of New York has published educational
comic books both in English and Spanish.
The Federal Deposit Insurance Corporation has been running a
free program, Money Smart, since 2001, and the content is updated regularly.
Money Smart’s objective is to enhance people’s financial skills and to create
positive banking relationships. The courses are designed for Kindergarten to
young adults, adults, senior citizens to avoid financial exploitation, and for
small business owners. There are also resources for educators and to teach
financial literacy trainers.
The Consumer Financial Protection Bureau, created under the
Wall Street Reform and Consumer Protection Act of 2010, also has a youth
financial education program. The CFPB has resources for educators, parents, and
students.
The Department of Treasury has several free online
educational programs from Kindergarten to young adults. As part of the
Financial Literacy and Education Commission created in 2003, the U.S. Treasury
set up MyMoney.Gov, a national financial education website. Additionally,
together with the Bureau of Engraving and Printing and the U.S. Secret Service,
the U.S. Treasury runs a program on U.S. currency. Additionally, Treasury has a
financial literacy program, and through the U.S. Mint, there are resources for
educators and students. Girl and Boy Scouts can also earn badges through a
financial literacy program designed by the U.S. Mint.
The Securities and Exchange Commission has Tips for Teaching
Students About Saving and Investing. More in-depth SEC educational resources
are designed for young adults and upward who want to learn about investing,
investment products.
The Commodities Futures Trading Commission (CFTC) has
educational resources to help commodities, futures, and swaps traders avoid
fraud, such as Ponzi schemes. It also has numerous free publications to help
detects scams and fraud. And unlike other regulators, the CFTC has a section
devoted to the agriculture community.
Governmental and regulatory agencies are not the only ones
that provide finance education for students. The New York Institute of Finance has
recently launched the Young Financial Scholar Program designed for Middle and
High School students. Unlike the government and regulatory free resources, this
program has live instruction, tailored research projects, mentoring programs
and charges a fee. NYIF’s program is global with students from all over the
U.S. as well as China, India, and Korea. Additionally, NYIF offers online
courses as well.
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