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

Financial Literacy A National Perspective Local & Personal Implications MN Jump$tart April 9, 2009. Dr. Tahira K. Hira, Professor Iowa State University, Ames Iowa www.eng.isatate.edu/tkhira. Topics. State of financial literacy National perspective

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

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  1. Financial Literacy A National PerspectiveLocal & Personal ImplicationsMN Jump$tart April 9, 2009 Dr. Tahira K. Hira, Professor Iowa State University, Ames Iowa www.eng.isatate.edu/tkhira

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

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

  4. National Perspective https://treas.gov/offices/domestic-finance/financial-institution/fin-education/commission/ T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

  5. A moment in the History

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

  7. 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 Launch T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

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

  9. 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. ISU. Youth Financial Literacy-Opportunities & Challenges

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

  11. 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 flc@do.treas.gov T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

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

  13. 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

  14. 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

  15. 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

  16. Challenges And Opportunities T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

  17. 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 advances T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

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

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

  20. 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? T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

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

  22. Local & Personal Implications T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

  23. How about a Minnesota Financial Literacy Challenge?

  24. How about a Mpls./St.Paul Community Financial Access Pilot Launch? T. K. Hira, Financial Literacy: Opportunities & Challenges

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

  26. Research Studies have shown T. K. Hira, Financial Literacy: Opportunities & Challenges

  27. 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/ T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

  28. Council Resources • FinancialLiteracyCouncil@do.treas.gov • http://www.treas.gov/offices/domestic-finance/financial-institution/fin-education/docs/PACFL_ANNUAL_REPORT_1-16-09.pdf • http://www. Money Math: Lessons for Life • http://www.fdic.gov/consumers/consumer/moneysmart/index.html • http://www.Mymoney.gov • www.volunteer.gov

  29. Thanks for the opportunity! Questions? T. K. Hira. ISU. Youth Financial Literacy-Opportunities & Challenges

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