Financial Literacy Education in the United States: Library Programming versus Popular Personal Finance Literature

By Faulkner, Ashley E. | Reference & User Services Quarterly, Winter 2016 | Go to article overview

Financial Literacy Education in the United States: Library Programming versus Popular Personal Finance Literature


Faulkner, Ashley E., Reference & User Services Quarterly


In the United States, financial literacy is a term used almost ubiquitously in a negative context: for instance, in discussing that among young Americans with a college education only 49 percent can answer a handful of very basic financial literacy questions correctly or that, as reported by the Financial Industry Regulatory Authority (FINRA), only 14 percent of Americans overall can answer a full five personal finance questions correctly. (1) This lack of financial literacy is perhaps why household spending in the United States is consistently ranked among the highest of the OECD nations, while US personal savings rates are consistently in the bottom 50 percent of OECD nations. (2) While standard financial wisdom recommends saving at least 10 percent of one's gross income, the average personal savings rate in the United States, as of May 2015, was only 5.1 percent. (3) While there are likely many factors contributing to poor household financial indicators in the US, improved financial literacy is one potential mean of addressing these concerns.

The United States does not address this topic widely in K-12 schooling. Though 43 US states now include personal finance somewhere in their K-12 standards, only six states require student testing of these concepts, and thus the topic is not widely addressed. (4) Topics not addressed in formal schooling can be addressed through personal study, or taught at home. A problem arises, however, when there are multiple generations of financially illiterate citizens. "Most of us learn about money from our parents," points out personal finance guru Robert T. Kiyosaki in his book Rich Dad, Poor Dad. "[But] what can a poor parent tell their child about money?" (5) Americans are left in a situation where schools don't teach financial literacy, parents often can't teach financial literacy, yet most realize, as famous financial pundit Suze Orman recounts to her readers, "You will never truly be powerful in life until you are powerful with your own money." (6) Someone needs to address financial literacy education nationwide. As civic anchor institutions and the undisputed home of democratic education in the United States, libraries have become a common resource to fulfill this need. (7)

Attention to this issue was slow to develop in the public library world, however. While the history of what one might today term financial literacy education in libraries dates back to the early twentieth century, authors did not begin to discuss financial literacy in library science literature (the particular term and all it encompasses) until the early 2000s, when the multi-literacies movement began and instead of a focus on literacy as a general term encompassing many skills, individual skills were highlighted via individually named literacies. The term financial literacy in particular arose first in education research journals, and even in popular personal finance literature, before being studied by library science researchers. The earliest library science articles to explore financial literacy focused on this skillset in light of consumer education and rights in the financial industry, likely as an echo of the government's growing concern for consumer protection, as evidenced by programs like the Federal Reserve Bank of Chicago's Money Smart Week program which began in 2002, or the establishment of the Financial Education and Literacy Commission by Congress in 2003. (8)

The study of financial literacy by library science researchers has intensified in the intervening years and libraries have begun to explore a myriad of ways to address this public education need. Numerous scholarly articles have explored both the increased need for financial literacy skills and the practicality of providing programming and reference assistance in both public and academic libraries. (9) In 2010, Molly A. Wolfe-Hayes's article "Financial Literacy and Education: An Environmental Scan" discussed where financial literacy fit into the multiliteracies movement and provided an overview of ongoing financial literacy activities. …

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