Economic literacy basics are something the Treasury Department considers are important enough to have a basic “food pyramid” if you will that makes it just as easy to know what personal finance tools people should use for cash management as knowing which foods are right to eat. Despite the fact that one third of Americans are obese showing the food pyramid doesn’t really help, the Department of Treasury is still moving forward. The Treasury Department is hoping a financial education program could be set for the whole country which is why public opinions are asked for the “financial schooling core competencies”.
Nation has personal finance issues
The Great Recession taught us one valuable thing when it comes to personal finance. There are too many financially illiterate Americans. A fundamental lack of knowledge about budgeting, investing, credit, lending and saving was exposed by meltdowns in finance, housing and credit. Strategy for promoting basic financial literacy and education as mandated by the Fair and accurate Credit Transactions Act of 2003 is being reviewed. It is reviewed, reports Investment Advisor, from the Treasury Department’s Economic Literacy and Education Commission. The Commission hopes the use the “food pyramid” as an example in this. It plans to make it very simple to understand financial literacy basics.
Basics of financial education
You can comment on this to the Department of Treasury if you would like. You just have to do it before September 12. According to a Federal Register notice released Aug. 26, the Commission has identified five proposed personal finance concepts – or “financial education core competencies” – that it says “every American should have command of.” They include:
Earning: Understanding the difference between gross pay and net pay, employee benefits and taxes and the importance of training.
Spending: The difference between needs and wants, learning how to create a budget, tracking spending and living within one’s means.
Saving: Understanding how saved money grows, how to meet long-term goals and wealth building, learning concerning bank accounts, understanding financial assets, for instance savings accounts and investments.
Borrowing: Understanding the cost of borrowing and also the role of credit scores.
Protecting: Learning how to protect assets, choosing the right insurance coverage and knowing how to guard against identity theft.
Seeking consensus on financial education
The Federal Register recorded the Treasury Department saying that the problem with financial education is there is no expectations on what is to be achieved. It wants every person to agree on the same things. This is of course in what should be in financial literacy and education. The National Endowment for Financial Education has Ted Beck who the Dallas Morning News reports having saying that in schools, “there’s a wide variance in different kinds of programs, the quality of programs”. “The idea of having a very straightforward checklist about the basics is something we think is very important.” According to a Texas education official, the Treasury is making a “good start” with the core competencies list. He also feels like it isn’t enough. He considers something significant for students to be aware of are the good and bands of all forms of borrowing, including charge cards mortgages, and payday cash advances.
Further reading
Investment Advisor
dallasnews.com/sharedcontent/dws/bus/columnists/pyip/stories/DN-moneytalk_06bus.ART.State.Edition1.26bf3ed.html
Dallas Morning News
dallasnews.com/sharedcontent/dws/bus/columnists/pyip/stories/DN-moneytalk_06bus.ART.State.Edition1.26bf3ed.html
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