Financial education has been in the news a lot lately. According to John Pelletier of Champlain College in Vermont, there has been an unprecedented number of financial education bills in state legislatures in the last two years. I recently attended Next Gen Personal Finance’s The Road to Financial Capability financial education advocacy conference and below are five key concepts that resonated with me:
¨ Special funding is not required for financial education mandates. High quality free curricula and professional development programs for teachers are readily available from several key non-profit providers. The only thing that is missing now is the will to make financial education available to every student across America.
¨ Financial education and consumer regulation are compliments-not substitutes- for one another. Americans need both education and regulation to make wise financial decisions and avoid costly financial pitfalls and fraud. An example is teaching about credit cards and regulating them with laws such as the CARD Act.
¨ Financial education standards determine the content taught to students. They should focus on topics related to students’ lives now or in the near future. Student loans need to be included in state standards and financial education materials.
¨ Financial education can be a great equalizer in an era of increasing income disparities in the United States. After learning about saving and investing, compound interest, and other key concepts, students may have financial hope for the first time in their lives.
¨ Financial education includes teaching self-control. Conscientious people have good self-control but not everyone is conscientious. Teaching strategies include making students wait for something (delayed gratification) and showing them the consequences of a lack of self-control.