Today’s increasingly complex financial services market offers consumers a vast array of products, services, and providers to choose from to meet their financial needs. While this degree of choice provides consumers with a great number of options, it also requires that they be equipped with the information, knowledge, and skills to evaluate their options and identify those that best suit their needs and circumstances. This is especially the case for populations that have traditionally been underserved by our financial system.

Financial education also is essential to help consumers understand how to prevent becoming involved in transactions that are financially destructive, how to avoid becoming victims of fraud, and how to exercise their consumer protection rights. Financial literacy can empower consumers to be better shoppers, allowing them to obtain goods and services at lower cost.

This optimizes their household budgets, providing more opportunity to consume and save or invest. In addition, comprehensive education can help provide individuals with the financial knowledge necessary to create household budgets, initiate savings plans, manage debt, and make strategic investment decisions for their retirement or their children’s education.

Having these basic financial planning skills can help families to meet their near-term obligations and to maximize their longer-term financial well being.

In addition to the Treasury Department, the following Federal agencies are represented on the Commission: The Federal banking agencies (as defined in Section 3 of the Federal Deposit Insurance Act)—the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS)—the National Credit Union Administration (NCUA), the Securities and Exchange Commission (SEC), each of the Departments of Education, Agriculture (USDA), Defense (DOD), Health and Human Services (HHS), Housing and Urban Development (HUD), Labor (DOL), and Veteran Affairs (VA), the Federal Trade Commission (FTC), the General Services Administration (GSA), the Small Business Administration (SBA), the Social Security Administration (SSA), the Commodity Futures Trading Commission (CFTC), and the Office of Personnel Management (OPM).

Congress charged the Commission to “improve the financial literacy and education of persons in the United States through development of a national strategy to promote financial literacy and education.” The statute also provides for a yearly re-examination of the progress of that strategy.

This document represents the first step in the evolutionary process of crafting and refining a framework for a national strategy for improving the financial literacy and education of Americans. Under the terms of the statute, the Commission will annually review the National Strategy and make changes and recommendations as it deems necessary.

Title V, Section 514 of the FACT Act states, in part, that the strategy “shall provide for participation by state and local governments and private, nonprofit, and public institutions in the creation and implementation of such strategy.” This mandate recognizes that both the private sector and the public sector are essential to improving financial literacy in America.

In adherence to this mandate, the Commission sought input from financial education providers and examined resources of the Federal, state, and local governments, nonprofit organizations, academia, and the private sector.

The Commission has met as a body every four months since it was established in January 2004, inviting representatives from an array of financial education sources to present information on particular programs to inform the Commission membership. The Commission also called for public comment on August 26, 2004, and in response, over 150 individuals and organizations replied. In an effort to obtain more information and detail from these respondents, the Commission held six sector-specific public meetings, inviting those who had submitted written comments to present more information.

Many used their own resources to travel to Washington, D.C. to attend these meetings and others were able to participate by telephone. The Commission is grateful to the participants for their thoughtful comments and willingness to share knowledge and opinions. Both the Federal Register notice and the summaries of these meetings are included in the Appendices to the Strategy. Many of the elements in this Strategy document were contributed by meeting attendees.

It is clear that there is a myriad of ongoing financial education efforts within the United States, targeting a wide variety of topics and audiences and employing various strategies to deliver financial education. Some of the efforts that the Commission identified represent background research that was instrumental in developing a framework for the National Strategy. Sponsored by Federal, state, and local government agencies, private entities, nonprofit organizations, and institutions of higher learning, these and many other programs respond to the financial literacy and education needs of many different segments of our population.

One fundamental challenge to improving financial education centers on reaching those who lack the awareness of the availability of such resources, who may not have the time to improve their level of financial education, or for whom existing information resources are inaccessible or inadequate.

Americans may be unable to take advantage of existing educational resources for a variety of reasons, including lack of Internet access, language barriers, or because they are not the targets of traditional methods of dissemination. One major and overarching goal of the National Strategy, then, must be to make it easier to access and use helpful, appropriate, and timely financial education information, in a format most useful to the intended recipient.

Another challenge that represents an opportunity for the Commission is helping Americans discern the difference  etween financial education and marketing. Occasionally, a company may try to deliver financial education in marketing materials for financial products or services. ...

Download Taking Ownership of the Future: The National Strategy for Financial Literacy

PDF format, 1.9MB, 162Pages. Link provided by mymoney.gov.

REPORT OF THE U.S. FINANCIAL LITERACY AND EDUCATION COMMISSION.

Table of Contents

Foreword, Part I: Taking Ownership of the Future. v
Foreword, Part II: Illustrative Programs . xiii

Chapter One: General Saving . 1
1. Shifting Public Discussion from Consumption to Saving through Public Awareness Campaigns. 2
2. Using Existing Tax Incentives to Make Saving More Convenient and Affordable. 4
3. Tailoring Communications to Make Saving Relevant to Everyone. 5

Chapter Two: Homeownership. 9
1. Using Grassroots Approaches to Deliver Counseling and Training Programs . 10
2. Highlighting Success through Quality Education and Public Awareness. 13
3. Community Collaboration Can Be Invaluable in Developing and Distributing Programs. 15

Chapter Three: Retirement Saving. 19
1. Educating Workers on All Retirement Saving Opportunities. 21
2. Encouraging Retirement Saving for Employees of Large Firms. 24
3. Retirement Saving Options for Employees of Small Businesses. 27
4. Taking Advantage of Tax-Preferred Individual Retirement Saving Products . 28

Chapter Four: Credit . 31
1. Increasing Public Understanding of Credit, Credit Reports, and Credit Scores . 33
2. Using Reputable Credit Counseling Services. 35

Chapter Five: Consumer Protection . 41
1. Educating Consumers about Reducing their Risk of Identity Theft . 42
2. Guarding against Fraudulent Business Opportunities . 45
3. Safeguarding Senior Citizens from Targeted Consumer Threats. 46

Chapter Six: Taxpayer Rights . 49
1. Helping Individuals to Identify and Utilize Available Programs and Services . . .50
2. Education and Outreach to Individuals and Employers. 53
3. Reducing Taxpayer Risks and Costs by Encouraging Direct Deposit . 55
4. Taking Advantage of Important, New Benefits to Realize Financial Saving . 56

Chapter Seven: Investor Protection . 59
1. Equipping Consumers with Unbiased, Neutral Investment Information. 60
2. Encouraging Greater Understanding of Investment Characteristics, Particularly Fees. 63
3. Protecting Investors from Fraud through Increased Education Efforts . 64

Chapter Eight: The Unbanked . 67
1. Using Banking Industry-Driven Products and Services to Increase Understanding and Utilization . 68
2. Encouraging Collaboration and Use of Existing Relationships to Increase Familiarity with Financial System. 70

Chapter Nine: Multilingual Multicultural Populations . 75
1. Promoting Participation in the Financial Services Process through Increased Understanding of the System. 76
2. Changing Perceptions about the Accessibility of Homeownership . 78
3. Improving Access to Financial Services. 79

Chapter Ten: Kindergarten – Postsecondary Financial Education . 83
1. Finding Room for Financial Education in K-12 Curricula through Integration. 84
2. Providing Teachers with Training and Support to Effectively Teach Financial Education Topics. 88
3. Providing Teachers with Effective Financial Literacy Materials, Curricula, and Resources. 89
4. Increasing Financial Literacy by Reaching Youth in Non-Traditional Educational Venues . 90
5. Increasing the Financial Skills of Postsecondary Students . 93

Chapter Eleven: Academic Research and Program Evaluation . 97
1. Encouraging Academic Research. 98
2. Program Evaluation Utilizing Proven Quantitative Analysis. 100
3. Program Evaluation Utilizing Qualitative Evaluation. 102

Chapter Twelve: Coordination Efforts . 107
1. Coordination of Federal Information on Financial Literacy . 108
2. Assessing Federal Resources and Avoiding Duplication and Redundancy. 109

Chapter Thirteen: International Perspective . 113
1. Approaches within Other Nations and Cross-Border Efforts. 114
2. Encouraging Global Partnerships . 118

Acronyms . 121
Appendix A: Meeting Summaries . 125
Appendix B: Federal Register Notice. 139

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