Personal Finance Education

Personal finance education is key to improving the financial stability of millions of Americans. InCharge develops and distributes personal finance education, free-of-charge, to children and adults, nationwide.

Free Personal Finance Resources

Budgeting & Saving

A good budget and savings commitment are the foundation of your financial plan. Learn how to budget, cut expenses, set savings goals and more. Challenge yourself to make every category in your budget more efficient. Learn how to reduce your expenses and built an emergency fund.

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Free Resources For Teachers

InCharge is proud to offer free financial literacy resources to teachers, K-12, college and adult. These are designed for individual study as well as in-person workshop experiences. These resources are free for downloading, printing and reproducing. Teacher’s guides included.

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Personal Finance Workshops & Workbooks

InCharge has developed specialized financial literacy workshops for at-risk adult populations, especially low-education and low-literacy. These unique materials are highly visual and interactive – designed for the in-person workshop. Check out our programs, use our materials in your own community and let us know how they work for you.

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The State of Personal Finance Education In The United States

Americans as a group are woefully lax at managing money. Many borrow too much, are poor at repaying debts and postpone planning for retirement until its right in front of them. Worse still, they make terrible investment decisions based on advice they should have dismissed.

Statistics bring focus to the problem. The Pew Research Center reports that three of every four people in this country haven’t saved enough for future needs A third of all American adults say they haven’t saved anything for retirement, according to Bankrate.com, and the median retirement account balance for all working-age people was just $3,000 in 2014, the National Institute of Retirement Security reports.

Year after year, the storyline continues, and studies suggest the problem is inter-generational, with many college students graduating with no plan to repay student loans and a pile of credit-card debt.

The Importance of Financial Literacy

But a growing cadre of educators and non-profit organizations are trying to fight back with new curriculums aimed at making financial education part of every secondary-school program.

“We want people to have a financial education before they become adults,” said Laura Levine, president and chief executive of Jump$tart Coalition for Personal Financial Literacy. “We need to do better. We need to educate more students with courses offered more often.”

Jump$tart Coalition is a Washington, D.C.-based consortium launched in 1995 to encourage financial-training programs. The goal is to create a population that is informed about financial choices and competent enough to make good decisions, the essence of financial literacy.

But it’s an uphill struggle.

Financial Education in Schools

Schools districts across the nation complain that they lack the money and staff to take on new programs. The sort of financial training they offer varies greatly. According to the Council for Economic Education, 17 states require that students take a personal-finance course to graduate high school, and only five require that the course be a full-semester standalone.

“Financial education is the classic underfunded mandate,” Levine said. “The states say the programs are necessary, but they often leave it to the local school districts to find the money.”

Jump$tart and other groups are pushing for improvements. They point to the number of people who graduate from school with a very limited understanding of how to budget money and how debt can lead to trouble if it isn’t managed properly.

Online Financial Literacy Tools

The problem has grown in an age of seemingly limitless financial choice. Credit cards, which not long ago had strict underwriting standards, are now widely available. Online access to financial services and promotional email has made credit offers of all sorts a ubiquitous part of life.

But the internet has also brought more tools for managing money, offering a vast array of free financial-planning calculators and budgeting apps. The trick is deciding which are worth using and knowing what to do with them.

The financial meltdown of 2008 revealed just how poorly many people understand money. Though much of the blame for the near calamity goes to lenders who pushed home-mortgage loans to people who weren’t able to repay them, the borrowers also shared in the blame for failing to understand the terms of the loans they signed.

The 2008 calamity brought down large and small banks, saw millions of homes go into foreclosure and forced the federal government to prop up a collapsing system. In response, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The legislation strengthened lending rules and created a new federal agency, the Consumer Financial Protection Bureau, to raise the financial competency of consumers and protect their interests.

The CFPB started on the premise that many people who bought homes before the 2008 meltdown didn’t understand the risks associated with subprime mortgages, complex loans with variable payment schedules that often became unaffordable as time passed. Failed subprime loans, issued to home buyers ill-equipped to repay what they borrowed, were a key cause of the meltdown.

The idea was to improve the financial know-how of Americans in all age brackets. School programs teach students the basics of borrowing, the risks of not having an emergency fund and the power of compound interest and the time-value of money in building savings.

School programs are designed to offer a framework that can be built upon as people’s financial lives become more complicated with age. Financial literacy education is a work in progress. Though agreement that a problem exists is widespread, best-practice guidelines are still being developed. Educators and personal-finance advocates are still developing metrics for assessing financial competency and methods for teaching the needed skills.

The federal government, through agencies like the CFPB and the Security and Exchange Commission’s Office of Investor Education and Advocacy, focus on integrating early learning with later-in-life training, building a framework to help consumers make better decisions.

The CFPB attempts to not only give consumers the information they need to make informed financial choices, but to acquire the skills to evaluate information they gather themselves. It offers online consumer-finance tools that help understand and evaluate credit card offers, mortgages, student loans and bank accounts, credit reports, payday loans and debt collection.

There is some evidence recent efforts might be helping.  FINRA Investment Education Foundation’s Financial Capability in the United States 2016 study found that more Americans had emergency funds set aside in 2015 than in 2012 and more had greater equity in their homes. But only 39 percent have planned for retirement and a majority worry about running out of money when they eventually do leave work.

Work, it seems sure, needs to continue to improve their financial good sense.

Sources:

(2016, July 12) National Financial Capability Study. Retrieved from: http://www.finra.org/newsroom/2016/americans-financial-capability-growing-stronger-not-all-groups-finra-foundation-study

(2015, November) National Financial Capability Strategy. Retrieved from: https://www.financialeducatorscouncil.org/national-capability-strategy/

(2016, January) Economic and Personal Finance Education in Our Nation’s Schools. Retrieved from: http://councilforeconed.org/policy-and-advocacy/survey-of-the-states/

NA (2015, October) Financial Literacy Annual Report. Retrieved from: http://files.consumerfinance.gov/f/201510_cfpb_financial-literacy-annual-report.pdf