What is Financial Literacy – the NFEC’s Philosophy
The National Financial Educators Council answer to the question “what is financial literacy?”…possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual’s personal, family and global community goals.
The NFEC’s philosophy was developed around the National Financial Capability Strategy report. The NFEC analyzed 47 recent proceedings documents, agency reports and other materials to presents some of the overall strategies identified by various agencies to guide nationwide financial literacy promotion. From our analysis three common themes emerged that might usefully underpin national standards for promoting financial literacy: education, awareness, and sustainability.
The National Financial Educators Council has sponsored, reviewed, and designed more than a thousand financial education programs. In process, the NFEC has identified the essential components programs must include for maximum impact and developed a clear financial literacy definition.
Financial education programs can be evaluated using three important criteria that determine their potential for long-term impact. The programs that best reach people with life-changing lessons are those that spark positive changes in participants’ financial behavior, raise community awareness, and maintain a sustainable business model.
The NFEC has coined the term “campaign approach” to describe model programs that focus on these three vital components. The campaign approach to financial literacy initiatives engenders strong community support, reaches a wide audience, and employs fun, motivating instructional techniques to keep participants interested and engaged.
Unfortunately, many programs today do not take advantage of the benefits offered by the campaign approach. Many financial literacy programs are one-dimensional, fail to align with larger objectives, and lack overall strategy. Such education typically lacks ongoing funding and is just plain boring—alienating participants from the learning process. And stale, boring programs usually suffer from low attendance.
The campaign approach engages target communities in the financial education process to present a far-reaching, appealing, sustainable program. Such initiatives are designed to be fun, engaging, and motivating—inspiring participants of all ages to take positive action. They garner media attention, attract others interested in promoting financial literacy, and thus receive strong backing from funding agencies and donors. Taking the campaign approach maximizes program outreach and impact.
What is financial literacy to you? Please share with us your thoughts and comments.