Although the financial consequences of being financially illiterate are well known in certain circles, others may ask, “Why is financial education important?” Does financial education really improve the financial health of those who undergo the curriculum? Financial educators can use evidence of financial behavior molding after undergoing a financial education program as direct evidence. Financial education programs, whether it be through informal means or through a structured program offered by an initiative, has the ability to produce real changes in financial behavior.
Only 23% of kids surveyed indicated that they talk to their parents frequently about money (Money Confident Kids). http://www.moneyconfidentkids.com/content/dam/money-confident-kids/PDFs/PKM-Surveys/2017_PKM_Results.pdf
In a survey by OECD, well over a quarter of respondents replied that their culture influenced their attitudes toward wealth (Organization for Economic Cooperation and Development). https://www.oecd.org/finance/financial-education/2017%20Seminar%20on%20financial%20education
18% of adults cited retiring without having enough money set aside as their top personal finance worry (National Foundation for Credit Counseling).
“We need to have financial literacy in America, not just complaining about obstructionism. We need solutions.” – Kabir Sehgal, bestselling author of 8 books
Real behavior molding is often seen as the primary goal of financial education programs. True financial literacy represents not only knowledge of personal financial matters as represented by tests, but also the ability to apply that knowledge to the specific circumstances of an individual’s own life. The goal of all financial educators is to improve the financial lives of all learners, not simply improve their scores on a battery of tests. Personal finance education, when done correctly, is able to mold financial behaviors to better align them with the long-term financial goals of the individual.
The International Organization of Securities Commissions suggests that programs should structure part of their content around skills relating to life events and regulatory procedures. Furthermore, effective programs develop content to meet the needs of specific target audiences, such as women, minorities, and those with low investing sophistication (International Organization of Securities Commissions). https://www.iosco.org
The President’s Advisory Council on Financial Capability public libraries can be provided with financial products and given the responsibility of appropriately distributing those materials (US Dept of Treasury). https://www.treasury.gov/resource-center/financial-education/Documents/PACFCYA%20Final%20Report%20June%202015.pdf
“Financial literacy is just as important in life as the other basics.” – John W. Rogers, Jr., CEO Ariel Capital Management