April 09, 2008
The Importance of Financial Education and the National Jump$tart Coalition Survey
Chairman Ben S. Bernanke
At the Jump$tart Coalition for Personal Financial Literacy and Federal Reserve Board Joint News Conference, Federal Reserve Board, Washington, D.C.
The financial preparedness of our nation's youth is essential to their well-being and of vital importance to our economic future. In light of the problems that have arisen in the subprime mortgage market, we are reminded of how critically important it is for individuals to become financially literate at an early age so that they are better prepared to make decisions and navigate an increasingly complex financial marketplace. Choosing a credit card, saving for retirement or for a child's education, or buying a home now requires more financial savvy than ever before. Financial literacy and consumer education--coupled with robust consumer protection--makes the financial marketplace effective and efficient, and better equips consumers to make tough yet smart financial decisions. Today, only eight states across the U.S. require personal finance before middle or high school graduation. I believe more states should consider making personal finance a requirement for all students who seek a high school diploma. I am personally convinced that improving education is vital to the future of our economy and all its citizens, and I strongly believe that promoting financial literacy, in particular, must be a high priority. I know that those of you here today join me in this conviction.
The Jump$tart Coalition is a leader among organizations seeking to improve the personal financial literacy of students from kindergarten to the university level. In particular, through its biennial survey of high school seniors--the results of which you will hear about shortly--Jump$tart has brought increased attention to the need for greater financial literacy among the youth of our nation. During the Jump$tart survey's 12-year history, the data gathered have served as the basis for useful measures of what young adults do and don't understand about finances. Undoubtedly, we will soon learn that there is plenty of work to be done and that our students have much to learn.
The Federal Reserve is strongly committed to Jump$tart's mission to better educate America's youth about personal finance. On the regional level, many Federal Reserve Banks work closely with the state coalitions to help achieve this worthy mission. In fact, there is at least one economic education specialist at each of the Reserve Banks and their branches. Many of these specialists offer training seminars to help educators teach vital economic and personal finance topics in their classrooms. The Federal Reserve also continues to support a variety of programs and initiatives to increase financial literacy. These include:
- Money Smart Week, an annual week-long program coordinated by the Federal Reserve Bank of Chicago, which educates consumers about money management and promotes financial education awareness in 20 cities across the 7th District;
- Building Wealth, a resource developed by the Federal Reserve Bank of Dallas to help consumers develop a personal plan for building wealth;
- "Life Smarts," a national quiz-based competition for high school students sponsored by the National Consumer League and promoted by many Reserve Banks;
- Educational web sites, such as the Federal Reserve Bank of San Francisco's "FedVille," where students actively learn more about financial concepts such as spending, saving, and earning interest; and
- FederalReserveEducation.Org, our system-wide education web portal offering easy access to a host of beneficial resources geared toward students, parents, and teachers.
In addition to these and many other Federal Reserve resources, we will continue to work to expand the resources and programs devoted to the important public policy challenge of improving financial literacy.
I want to take this opportunity to thank the Jump$tart Coalition and their partners for their continued support and commitment to furthering the financial education of our youth. Now, it is with great pleasure that I introduce Laura Levine, executive director of Jump$tart and appointed member of President Bush's recently formed Council on Financial Literacy, who will give a report on the status of financial education of youth in this country.