April 15, 2005
New Report Highlights Alternatives to Improve Public Understanding of Personal Finances
WASHINGTON, D.C. - Improving the public's understanding of personal money management and skills is taking on increasing importance in state legislatures, according to a new report by the National Conference of State Legislatures.
"Legislators Primer on Financial Literacy," released today by NCSL's Foundation for State Legislatures Banking Partners Project, offers policymakers options on how to provide the public with a better understanding of the wide range of financial requirements and options before them.
"Recent surveys show that many Americans lack the basic financial knowledge necessary to spend their money wisely; save for the future; and manage money challenges such as a job loss, financing a college education, or a catastrophic injury," the report says. "State legislators and other policymakers are crafting policies to ensure that consumers gain the financial know-how to deal with the ever-increasingly complex financial markets."
The report notes that states are targeting specific groups to increase financial literacy, especially students. Most states require economics classes, including personal finance education standards. At least seven states require students to complete a personal finance management skills course or consumer education course. The report notes that last year, the Washington legislature created a financial literacy public-private partnership to develop a definition of financial literacy to be used in the state’s educational efforts and to identify strategies to increase the financial literacy of public school students in the state.
Significant concern remains on the ability of adults to understand personal finance issues. "Unlike students, it is more difficult to reach adults to provide them with financial education," the report says. The report lists several successful campaigns that have targeted and reached adults.
The report points out several options available to state policymakers to improve financial literacy, including:
- helping to build partnerships between private and public organizations to encourage these groups to work together on financial literacy efforts for school and college age individuals, and for adults;
- establishing interagency councils to coordinate existing and future efforts to increase financial literacy;
- creating a state-level office dedicated to coordinating and promoting the state’s financial education programs and policies; and
- encouraging financial literacy by investing in professional development for teachers and by encouraging and motivating teachers to incorporate financial literacy into their lesson plans.
The project encourages state legislatures to continue addressing financial literacy issues. "Financial education, just like reading and writing, affects the well-being of every individual," the report says. "It also affects the economic and social well-being of every community and, ultimately, the overall strength of the nation’s economy."
The partnership, chaired by Delaware State Representative Donna Stone, also provides a summary of financial literacy bills in state legislatures this year. Others participating in the project were AARP, American Financial Services Association, Community Financial Services Association of America, Credit Union National Association, and the Mortgage Bankers Association. Several additional state legislators and legislative staff participated as well. They are: Utah Rep. David Clark, Massachusetts Rep. John Quinn, Illinois Rep. Frank Mautino, Ohio Rep. Keith Faber, South Carolina Rep. Dan Tripp, Ryan Wilson of Missouri and Wade Adams of Louisiana.
A Web page that contains other resources on financial literacy can be found at http://www.ncsl.org/programs/banking/FinLiteracy_Introduction.htm
Credentialed members of the media may obtain a free copy of the report by sending an email to press-room@ncsl.org. Others can purchase the book by contacting the NCSL Bookstore at 303-364-7700 or books@ncsl.org.
NCSL is a bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.
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