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Financial Education for All

Financial educationA common mantra when discussing programs and services to improve an individual’s financial understanding is “One size does not fit all.” In addition, there’s no one age where financial education should begin and end.  This was abundantly clear during the Improving Financial Literacy and Capability: What Works? conference organized held earlier this summer.  This day-long program presented the innovative ideas and work of the Financial Literacy Center, a joint effort of the RAND Corporation, Dartmouth College and the Wharton School.  Each presentation provided insights in to various approaches to and workable solutions to improving financial literacy for consumers of all ages. 

The day’s panels highlighted a variety of research, programs and technologies, and all presentations can be found on this website for the conference.  I want to share with you highlights from the presentations which made up the panel I moderated: Financial Literacy Among Young People.  The AICPA outreach efforts in this area include 360 Degrees of Financial Literacy and Feed the Pig, which encourages 25-34 year olds to improve saving habits for long-term financial health.  However, as we know, waiting until your mid-twenties to begin thinking about money and learning about good financial habits puts you at a serious disadvantage for financial security as an adult.

Dorothy Wallace of Dartmouth College presented her research on Building Financial Literacy on K-8 Pre-Service for Teachers and Adult Learners.  Through her work, she tested college curricula for financial literacy instruction, suitable for adult learners and pre-service K-8 teachers.  Teachers’ own lack of financial understanding often inhibits their teaching financial education in the classroom.  Yet the basics of money management need to begin in elementary school.

Joanne Young of RAND and Anya Savikhin of the University of Chicago shared their research on identifying Five Steps to Financial Planning Success.  Their project explains thee five key principles to young workers: the power of compounding interest; the effects of inflation; how to diversify risks, the role of tax-favored assets and the advantages of employer matches in 401(k) plans.  This web-based program conveys the Five Steps through stories, pictures and compelling examples that illustrate how to harness the power of these principles in practice. 

Jody Hoff of the Federal Reserve Bank of San Francisco shared her research and program, Returns for Work for Children After Again Out of the SSI Disabled Children Program.  According to Jody, when disabled children receiving SSI reach the age when they must choose between entering the workforce or the SSI adult program, many of them decide against taking a job, even on a part-time basis.  A main attributor to this is that the information about options available focus on becoming eligible for benefits rather than on the potential rewards of work.  This project offers tools to provide more useful information on the value of returning to work rather than staying in the SSI program.

Often when thinking about the dire state of the country’s financial understanding, I wonder how it can ever be improved.  Yet, during this conference, I found the above presentations as well as the other presentations and discussion from that day to be incredibly insightful into the diverse financial education needs of the American population, the many resources in place or under development to address these needs as well as the varied teachable moments that exist for improving our financial education when the right tools with the right message are provided. Working together to ensure wide distribution of these programs, I believe we can make a difference in the financial lives of individuals, the communities in which they live, and perhaps, even one day, this nation. 

Melora C. Heavey, Senior Manager - Communications, American Institute of CPAs. Melora manages the CPA profession’s volunteer effort, 360 Degrees of Financial Literacy, and the award-winning public service campaign, Feed the Pig.  She serves as the staff liaison to the National CPA Financial Literacy Commission, the leadership body and primary spokespeople for 360 Degrees of Financial Literacy.

Hands of different generations image via Shutterstock.

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