In a major crisis, our first impulse is to address people's immediate needs. With the Haiti and Chile earthquakes, that meant providing food and shelter to the victims. In the case of the recent economic recession, the government stepped in by extending unemployment insurance, providing COBRA subsidies and promoting mortgage refinancing guidelines, among many other programs.
Once the dust settles on pressing concerns, a more long-range approach kicks in – we step back and ask questions like, "How did we arrive at this state?" and "How can we all keep from making the same mistakes again?"
Part of the solution is to strengthen our financial education programs so that today's children and teenagers are better equipped to manage their own finances and avoid the mistakes of their parents. Many studies have shown that young adults display much lower financial literacy than older generations.
Neal Wolin, Deputy Secretary of the U.S. Department of the Treasury, notes, "The government is moving forward with financial reform and strong protection for consumers, but we must also do a better job of making sure our high school students graduate with a better understanding of basic economics, basic finance and the benefits and risks associated with debt."
In that spirit, the Departments of Treasury and Education jointly launched the National Financial Capability Challenge, a nationwide award program aimed at increasing the financial knowledge and capability of high school-aged students. The Challenge inspires students to take control of their financial future by learning more about personal finances and challenges teachers and schools to incorporate important financial information into their curricula.
Across the country, thousands of teachers, schools, home-school parents, youth group leaders and others were recruited to enroll and prepare their students for the program. Educators were provided with a free educational toolkit to supplement other materials they may already use.
The Challenge, which wraps up in April, culminates in a voluntary, 30-minute online exam. The top two scorers at each school, as well as all students who score in the top 20 percent, will receive personalized award certificates. Educators from schools and states with the highest participation rates also will be recognized. "We're very pleased by the favorable response we've received, and eagerly await the final exam results," says Wolin.
Numerous other government- and private sector-sponsored financial literacy initiatives are also underway. For example, on April 19 the Federal Reserve Bank of Chicago and Visa Inc. are co-hosting the fourth annual Financial Literacy and Education Summit whose theme is "Advancing Financial Stability and Responsibility."
The program features leading financial literacy experts who will address key issues in the fields of education and personal finance, such as how we can improve our collective economic health and how to bolster our shared commitment to global financial education. Among the many experts speaking at the Summit will be Wolin's Treasury colleague Michelle Greene, the Deputy Assistant Secretary for Financial Education and Financial Access. To register to watch the free live Summit broadcast and stay informed about event details, visit www.practicalmoneyskills.com/summit2010.
Take advantage of the wealth of financial education tools available so you – and your kids – can better weather the next financial storm.