Hearings and Briefings

Making Financial Education Real for Kids: New Policy and Programs Ideas to Build Financial Skills and Habits for Children and Youth

The New America Foundation and the Congressional Savings and Ownership Caucus hosted a panel discussion on June 21 on current efforts and new ideas to increase financial literacy among youth. The discussion began with remarks by Rep. Cooper (D-TN) on the importance of financial literacy, followed by Rep. Biggert (R-IL), co-chair and co-founder of the Financial and Economic Literacy Caucus (FELC). Biggert commented on the low level of financial literacy among Americans, and pointed to some legislation that allow kids to learn money management at younger age. Rep. Shaw (R-FL) talked about the potential of FELC and its coordination with the non-profit and private sector to ensure constituents have the best available knowledge of personal finance, which he believes is necessary to ensure the American competitive market. Dan Iannicola, Deputy Assistant Secretary for Financial Education at the Department of the Treasury, shared some resources that encourage students to make better use of credit.

The panelists presented ideas and best practices to tackle the issue of low financial knowledge among youth. Laura Levine, Executive Director of Jump$tart Coalition for Personal Financial Literacy, showed that according to the Jump$tart 2006 Survey, kids know more about spending than saving. Edwin Bodensiek, Vice President of Government Affairs at Junior Achievement, mentioned their module that involves youth volunteers teaching their peers about financial management and the need for more volunteers to fulfill increasing demand. Mary Hagerty, Senior Vice President and Chief of Financial Literacy Initiatives at Operation HOPE, emphasized that financial education is about teaching people to take control of their own future, which requires a more proactive approach that balances good curricula and delivery methods. Dara Duguay, Director of the Office of Financial Education at Citigroup, was more optimistic in pointing out the improvement in students’ financial practices over the past decade as a result of financial literacy programs and the legislative movement, in which states adopt policies that require financial education in school. Sarah Ball Teslik, CEO of Certified Financial Board of Standards Inc., ended the discussion with a reminder that the delivery vehicles need to be tailored toward kids as a special audience, including setting short-term rather than long-term goals and utilizing media and technology to encourage kids to learn.

Responding to questions from the audience, the panel agreed that credit lending institutions also need to be involved to make youth more responsible with credit. Legislators can also help by joining the FELC and showcasing successful financial literacy projects. In particular, Duguay drew attention to the need for the U.S. Department of Education and the education community to be more active in the issue and to support related legislation.

The Financial and Economic Literacy Caucus was launched on February 15, 2005 by Rep. Biggert (R-IL) and Rep. Hinojosa (D-TX) to help organize legislative efforts and policy initiatives related to financial literacy and economic education. For Biggert’s remark on FELC, click here.

Related Legislation:

401Kids Family Savings Act of 2006 (H.R. 5314) – to allow parents to establish savings accounts for their children at birth for the purpose of financing college, buying a home, and saving for retirement. For more information, click here.

S.868/H.R.1767 The America Saving for Personal Investment, Retirement, and Education Act (The ASPIRE Act of 2005) – to encourage savings, promoting financial literacy, and expand opportunities for young adults. For more information, click here.

More Financial Education Resources:

U.S. Financial Literacy and Education Commission

Taking Ownership of the Future (2006 National Strategy for Financial Literacy): Quick Reference Guide

Full version

Jump$tart Coalition for Personal Financial Literacy

Citigroup Financial Education

New America Foundation Asset Building Program

Issue Brief June, 2006: Policy Options to Improve Financial Education

Operation HOPE Financial Literacy Report 2006