Academic journal article Chicago Fed Letter

Strategies for Success in Financial Education

Academic journal article Chicago Fed Letter

Strategies for Success in Financial Education

Article excerpt

The Federal Reserve Bank of Chicago will host a conference, Financial Literacy, Financial Education, and the Federal Reserve: Strategies for Success, on September 11, 2009. This article reviews some of the financial education activities throughout the Federal Reserve System.

Our upcoming conference will bring together individuals within the Federal Reserve system and representatives of partner organizations to share strategies for designing successful financial education programs, discuss related research findings, and learn from one another about what works and what could be improved. This Chicago Fed Letter covers a sampling of the Federal Reserve System's initiatives that provide opportunities for people to increase their financial literacy and learn more about the Fed.

The regional Feds and the Federal Reserve Board operate a range of programs to help individuals become informed consumers and better understand the variety of financial products that are available to them. Some of these initiatives target large and diverse groups that make up a significant share of the local community, e.g., homeowners, low-income households, or school-age children, while other initiatives focus on a very specific audience that may represent a much smaller share of the overall population, e.g., immigrants or military personnel. The delivery methods also vary considerably depending on the type of initiative and the needs of the local population. These methods include seminars, printed materials, web-based information, videos, research, as well as cooperative endeavors with other institutions. Some strategies are shared across several Federal Reserve Banks. Other strategies are the work of a single Federal Reserve Bank and reflect the effectiveness of a specific approach tailored to a particular Federal Reserve District. The following discussion organizes these initiatives into five categories: curriculum development for the classroom; the development of other educational materials; partnerships with other organizations; coordination of community resources; and evaluation of financial education programs. The projects that we highlight represent a small subset of the financial education efforts taking place across the Federal Reserve System.1

Curriculum development

One approach that several regional Feds have taken to promote financial understanding is to develop content for financial education and economics courses, many of them designed specifically for lower- and middle-income consumers. Consumers who take these courses build personal finance skills that can help them make more informed financial decisions. An example of this work is the Money Smart Financial Planning Curriculum: Building Wealth and Financial Stability for the Future, developed in a partnership between the Atlanta Fed and the Federal Deposit Insurance Corporation's (FDIC) Atlanta Office. This curriculum adds six new modules to the FDICs Money Smart Financial Education program, namely, fundamentals of financial planning, insurance planning, retirement planning, estate planning, income taxes, and investment planning. It is intended to encourage low- and middle-income individuals to see long-term financial stability as an achievable goal for themselves and their families. Staff from both the Atlanta Fed and the FDICs Atlanta Office conduct train-the-trainer sessions across the country for industry professionals, including financial advisors, human resources benefit coordinators, and insurance agents, who then offer the courses to their target populations.

Another financial literacy curriculum offered by the Federal Reserve System is called It's Your Paycheck!. The program was developed by the St. Louis Fed in 2008 in response to a new requirement that high school students in Missouri and Tennessee receive instruction in personal finance in order to graduate. The curriculum is divided into nine lessons that correspond to the National Personal Finance Standards and the National Standards in Economics. …

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