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Friday, March 22, 2013

Financial Education Recommendations Delivered to President Obama

Obama Meeting with Council

The President’s Advisory Council on Financial Capability (Council) recently delivered its final report and findings regarding financial education to President Obama.

The Council’s four major recommendations, along with the Council’s other recommendations, share a common element: that financial capability must be woven into the fabric of our lives—into our homes, our schools, our workplaces, our communities, even the design and regulation of the financial products and services we use.

The Council’s four major recommendations include:

1. Education of Youth
Financial education is a lifelong pursuit that needs to begin in the home with parents educating their children, continue in a child’s pre-school years, continue throughout high school in preparation for postsecondary education and training, and then persist beyond. The Council encourages the federal government to support the introduction of financial literacy into homes and communities using a variety of accessible tools. Two resources that already exist are for the home, and Money As You Learn for schools.

2.  Workplace Financial Education
The workplace is a critical place to provide financial capability education and well-framed financial choices.  The Council encourages the federal government and all employers to embrace an enhanced responsibility for the financial well-being of employees and share best practices in employee education and benefits. Employers are encouraged to use tools such as the Council’s “Financial Capability at Work: A Strategic Framework to Guide Employers (pdf).”

3. Partnerships and Working Together
Financial capability can best be advanced in the community through the coordinated efforts of local governments, schools, post-secondary institutions, financial service providers, local business leaders and non-profits working together.  The Council encourages the federal government to support and build upon the 110 state, local, and tribal financial capability councils to harness their resources and promote the financial well-being of their residents, especially the most economically challenged, by promoting the use of the Council's resource guide, "Creating Financially Capable Communities (pdf)."

4. Clearinghouse of What Works
Without well-designed financial instruments, informed by an understanding of the kinds of mistakes people make, even the best-educated are likely to fail and thoughtful educational programs will be considered ineffective. The Council recommends that financial education researchers, behavioral economists and regulators should learn from and inform each other’s work. Toward that end, the federal government should establish an online clearinghouse for research in the field of financial education and behavioral economics that is informed by rigorous research standards, like those used by the Doing What Works Clearinghouse in the Department of Education.

Take Action
The Council is asking all those with an interest in these critical issues not only to consider these recommendations, but to use them as a springboard for action.

For more information, view the full report (pdf).