Personal financial education, once primarily the concern of individual households and the organizations committed to assisting and educating them, now plays a prominent role in the work of many financial institutions, community and faith-based groups, nonprofit organizations, and local and federal government agencies. Growing concern about the level of knowledge needed to manage personal finances has resulted from the confluence of many factors, including an expansion of credit availability and changes in pension funding mechanisms that have made consumers more responsible for their long-term financial security. Also contributing to the rise of interest has been a marked increase in the number of providers and the complexity of the consumer products offered by the financial services industry. (1)
These trends underscore both the promises and the pitfalls of financial services and draw attention to the importance of deliberate financial planning and savings to achieving such life goals as buying a home, funding higher education, starting a business, and securing a comfortable retirement. In addition to affecting the quality of life of individual households, the attainment of these goals, when taken in the aggregate, has important macroeconomic implications, as a more financially educated population contributes to market efficiency and thereby helps promote the general economic welfare.
The Federal Reserve has for many years worked with educators and community groups to promote economic and financial education and consumer awareness. More recently, Federal Reserve Board Chairman Alan Greenspan, other Board members, and Federal Reserve Bank presidents have stepped up their advocacy of financial education, noting that technological advances and a changing financial marketplace require informed financial decisionmaking.
In recognition of the growing importance of successful personal financial management to individuals and the broader economy, the Federal Reserve System--from the Board of Governors at its central office in Washington, D.C., to the twelve regional Federal Reserve Banks and their Branches--has intensified its efforts, focusing on three strategic areas:
* increasing awareness of the importance of personal financial education
* participating in and facilitating collaborations to improve efficiency in the delivery of financial education
* studying the effectiveness of financial education programs
National Awareness Campaign
In May 2003, the Federal Reserve System launched "There's a Lot to Learn about Money," a multifaceted, nationwide financial education campaign with two purposes: to highlight the importance of sound financial decisionmaking among American families and to raise awareness of the financial education resources available through the Federal Reserve and other providers. The campaign reached out to individuals, community groups, and consumer advocates through a variety of media. A website rich in information on borrowing, homebuying, wealth building, and other topics of interest to consumers was developed. A brochure full of tips for consumers on ways to take charge of their financial future was prepared. Public service announcements (PSAs) featuring Chairman Greenspan were recorded for radio and television, in English and Spanish. The System hosted a toll-free telephone number, advertised in the PSAs, through which callers could request copies of the brochure. And both the Board and the Reserve Banks hosted national, regional, and local events and education activities for the public throughout the months following launch of the initiative. (2)
The campaign's reach was broad. The 30-second PSAs were broadcast in many media markets across the country; the radio version was aired more than 37,000 times, and the television version 12,500 times, during the first twelve months of the …