Dr. Tahira K. Hira, Professor Iowa State University, Ames Iowa eng.isatate/tkhira

Financial Literacy A National Perspective

Local & Personal ImplicationsMN Jump$tart April 9, 2009

Dr. Tahira K. Hira, Professor

Iowa State University, Ames Iowa

www.eng.isatate.edu/tkhira

mailto:[email protected]

Topics

• State of financial literacy• National perspective• Financial education for youth and adults

– Council’s initiatives, recommendations & tips– Council’s upcoming events

• Challenges and opportunities • Local and personal implications

4.9.2009 2T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

State of Financial LiteracyYouth

The Jump$tart Coalition for Personal Financial Literacy has been conducting national surveys of high school seniors to measure their financial literacy biennially since the 1997. The 2008 survey had the lowest score of any survey issued to date, with high school seniors answering just 48.3 percent of the financial literacy questions correctly.

4.9.2009 T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges 3


National Perspective

https://treas.gov/offices/domestic-finance/financial-institution/fin-education/commission/

A moment in the History

Council’s Charge• Improve financial education efforts for youth in school

and for adults in the workplace;• Promote effective access to financial services,

especially for those without access to such services;• Establish effective measures of national financial

literacy• Conduct research on financial knowledge, including the

collection of data on the extent of financial knowledge of individuals

• Strengthen and coordinate public and private sector financial education programs


Council Initiatives• Money Math Curriculum• National Financial Literacy Challenge• Work Place Honor Roll • White House Roundtable on Financial

Literacy • USA Freedom Corps Financial Literacy

Volunteer Initiative• Community Financial Access Pilot Launch4.9.2009 T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges 7

Money Math Curriculum

This initiative was developed with cooperation of the Treasury, Citi, JumpStart and the Bureau of Public Debt. The curriculum is available at mymoney.gov and the Council’s web page. (http://www.treasury.gov/press/releases/hp843.htm)

8T. K. Hira, Financial Literacy: Opportunities & Challenges

http://www.treasury.gov/press/releases/hp843.htm

http://www.treasury.gov/press/releases/hp843.htm

National Financial Literacy Challenge Awards

• 10 students representing 10 regions, who achieved perfect scores on the National Financial Literacy Challenge exam were honored on June 17th 2008

• Each was awarded a $2,500 college scholarship from the Charles Schwab Foundation

• Two students appeared on the Today Show on June 16th 2008


T. K. Hira, Financial Literacy: Opportunities & Challenges

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National Financial Literacy Challenge

Twenty-two high school students have learned that knowledge literally pays. Charles Schwab Foundation is awarding $1,000 scholarships to each of the 22 students who obtained scores of 100 percent on the fall 2008 National Financial Literacy Challenge. SAN FRANCISCO, March 3, 2009

[email protected]

T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges11


Workplace Honor Roll• To increase the commitment among

employers to the financial well-being of their employees

• Recognition program that is relevant and achievable for workplaces regardless of company size

• Criteria: content, delivery, outreach, sustainability and evaluation


Council’s Recommendations• Schools should be required to teach

financial education from kindergarten through 12th grade

• College students should be required to take a course in financial literacy in order to receive federal student loans

• Employers should receive tax incentives to teach workers about money

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Council’s Recommendations • Financial institutions should be required

to provide every adult American with access to a debit-card-accessible bank account

• The government should create a resource center on its financial literacy website, www.mymoney.gov, for human resources professionals and employers

T. K. Hira, Financial Literacy: Opportunities & Challenges

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Council’s Tips to Managing Money in Challenging Times

• Despite market conditions, your bank account is safe

• Make sure you have a rainy day fund• Protect your credit score• Always keep lines of communication open with your

mortgage lender• Don’t try to cut costs by canceling your insurance• Understand how your investments are protected• If it sounds too good to be true, it probably is

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Challenges And

Opportunities

Challenges• Lack of national standards for contents informed

by pedagogy & research for delivery and evaluation

• Voluntary nature of the financial education• Lack of serious commitment by school boards

and management• Lack of time and resources assigned to FLE• Financial education does not start early, and

remain advancing as youth advances4.9.2009 T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges 17

Variety of Names • Money Management- Infusing Personal

Finance into Mathematics and Language Arts Grades 3-5 – NICE

• Financial Fitness for Life: Pocket Power Grades 3-5 NCEE

• JA Exchange City Grade 5 Junior Achievement

• JA Elementary School Program Grades 3-5


Opportunities • Uniformly adapt clear financial education

standards, benchmarks, and competencies that lead to positive financial behavior

• Conduct research and evaluation to measure the impact of financial education provided on knowledge gained and behavior changed


Research Questions

• Does Financial education work?• At what age can we effectively engage a person? • What role do personal values play in explaining financial

behavior?• What is one action that will bring about the most behavioral

change? – Education, policy, information

• Do people with different backgrounds learn differently?


Opportunities …• Explore ways to incorporate parental

education as part of financial education in K-12

• Promote early financial education• Require a financial education capstone

course for all high school students• Provide teacher training and resources


LOCAL & PERSONAL IMPLICATIONS


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How about aMinnesota

Financial Literacy Challenge?

T. K. Hira, Financial Literacy: Opportunities & Challenges 24

How about aMpls./St.Paul Community

Financial Access Pilot Launch?

What can we do now?• Agree on core competencies that every

young person needs to know• Require financial education in class rooms• Place educational resources with proven

results in the hands of teachers • Conduct rigorous theory-based research to

better understand the impact of financial education on financial behavior


Research Studies have shown

Financial knowledge

Financial practices

Financial wellbeingT. K. Hira, Financial Literacy:

Opportunities & Challenges26

A Resource for teacher training

• Family Economics and Financial Education• Lesson plans, ready to teach format (

www.fefe.arizona.edu)• Over 100 lesson plans for 7-12 grades• Professional updates , training seminars• http://gearup-moneyskills.org/HighSchool/


http://www.fefe.arizona.edu/

http://gearup-moneyskills.org/HighSchool/

Council Resources• [email protected]• http://www.treas.gov/offices/domestic-finance/fina

ncial-institution/fin-education/docs/PACFL_ANNUAL_REPORT_1-16-09.pdf

• http://www. Money Math: Lessons for Life• http://www.fdic.gov/consumers/consumer/moneys

mart/index.html

• http://www.Mymoney.gov• www.volunteer.gov

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http://www.treas.gov/offices/domestic-finance/financial-institution/fin-education/docs/PACFL_ANNUAL_REPORT_1-16-09.pdf



http://www.treasurydirect.gov/indiv/tools/tools_moneymath.htm

http://www.fdic.gov/consumers/consumer/moneysmart/index.html

http://www.fdic.gov/consumers/consumer/moneysmart/index.html

http://www.mymoney.gov/

http://www.mymoney.gov/

http://www.volunteer.gov/

THANKS FOR THE OPPORTUNITY!

QUESTIONS?


Dr. Tahira K. Hira, Professor Iowa State University, Ames Iowa eng.isatate/tkhira

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