From Policy to Action: Updates from the Financial Literacy and Education Commission (FLEC) Annual Conference on Financial Education

Transcription

1 From Policy to Action: Updates from the Financial Literacy and Education Commission (FLEC) Annual Conference on Financial Education March 9, 2017 Meina Banh, Policy Advisor, Office of Financial Education

2 This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the Consumer Financial Protection Bureau. Any opinions or views stated by the presenter are the presenter s own and may not represent the Bureau s views. 2

3 What we ll cover Financial Well-Being Youth Financial Capability Portfolio Building Blocks to Achieve Youth Financial Capability Money As You Grow Youth Employment Success Paying for College Financial Well Being Principles Financial Well-Being Scale Planning for Retirement Community Financial Education Project CFBP Financial Education Exchange Publications 3

4 Consumer Financial Protection Bureau The CFPB helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. Dodd-Frank Act directs the Office of Financial Education to develop and implement a strategy to improve the financial literacy of consumers that includes measurable and objectives, in consultation with the Financial Literacy and Education Commission, consistent with the National Strategy for Financial Literacy, through activities including providing opportunities for consumers to access

5 Financial education that supports financial well-being

6 Growing consensus that financial well-being is the ultimate goal of financial literacy/capability Financial capability empowers individuals to improve their present and long-term financial well-being. - Executive Order, President s Advisory Council on Financial Capability (2010) Vision: Sustained financial well-being for all individuals and families in the United States. -U.S. National Strategy for Financial Literacy (2011) Financial literacy is a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being. - OECD International Network for Financial Education (2012) 6

7 What financial well-being is A state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life. Elements of financial well-being: Having control over day-to-day, month-to-month finances Having the capability to absorb a financial shock Being on track to meet financial goals, and Having the financial freedom to make choices that allow one to enjoy life 7

8 What influences financial well-being Knowledge and skills What you know, and what you know how to do. Social and economic environment What surrounds you in your family and community. Personality and attitudes How you tend to think, feel, and act. Decision context How a particular decision is presented. Behavior What you actually do. Available opportunities What options are open to you. Personal financial well-being How satisfied you are with your financial situation. 8

9 Youth Financial Capability Portfolio

10 Building blocks of financial capability Executive function Financial habits and norms Financial knowledge & decision-making skills What it is Self-control, working memory, problemsolving Healthy money habits, norms, rules of thumb Factual knowledge, research and analysis skills What it supports in adulthood Future orientation, perseverance, planning and goal setting, general cognitive flexibility Decision shortcuts for navigating dayto-day financial life and effective routine money management Deliberate financial decision-making strategies, like financial planning, research, and intentional decisions Examples of financial application Saving, setting financial goals, developing and executing budgets Having a system to pay bills on time Effective comparison shopping

11 Development is a continuous process

12 How financial education programs for youth can build the foundations for adult financial well-being 1. For children in early childhood, focus on developing executive function 2. Help parents and caregivers to more actively shape their child s financial socialization 3. Provide children and youth with experiential learning opportunities 4. Teach youth financial research skills

13 Money as You Grow: for parents and caregivers consumerfinance.gov/moneyasyougrow Make it easier for parents and caregivers to put their children on the path to financial well-being in adulthood: Age-appropriate games and resources New home for the popular moneyasyougrow.org site Reinforced by CFPB research on children s financial development And more: blog posts, social media outreach, and 13

14 Building partnerships: Youth Employment Success Increase the number of financially capable youth by providing: Technical assistance to municipalities to integrate financial capability services into youth employment programs Training using CFPB s Your Money, Your Goals Toolkit and FDIC s Money Smart for Young Adults 14

15 Paying for college consumerfinance.gov/paying-for-college 15

16 How financial education programs can support financial well-being 1. Know the individuals and families to be served Start with learning their challenges, goals, and situation and tailor support accordingly. 2. Provide timely, relevant and actionable information 3. Improve key financial skills By supporting individuals in learning the how to of effective personal financial management applied to their own situation. 4. Build on motivation Help people clarify motivations and connect desired behaviors and action steps to desired outcomes. Support development of financial self-efficacy. 5. Make it easy to make good decisions and follow through Help create a context for people where they are more likely to take desired actions. 16

17 The CFPB Financial Well-Being Scale Questions How well does this statement describe you or your situation? 1. I could handle a major unexpected expense 2. I am securing my financial future 3. Because of my money situation, I feel like I will never have the things I want in life 4. I can enjoy life because of the way I m managing my money 5. I am just getting by financially 6. I am concerned that the money I have or will save won t last Response Options Completely Very well Somewhat Very little Not at all How often does this statement apply to you? 1. Giving a gift for a wedding, birthday or other occasion would put a strain on my finances for the month 2. I have money left over at the end of the month 3. I am behind with my finances 4. My finances control my life Available at Always Often Sometimes Rarely Never 17

18 Planning for Retirement consumerfinance.gov/retirement/before-you-claim Easy to use, interactive tool Three simple steps to help consumers navigate their Social Security claiming decision Optimized for mobile use Created with the support of SSA Available in Spanish 18

19 CFPB Community Financial Education Project consumerfinance.gov/library-resources Make libraries the go-to resource for financial education in every community Over 2,500 library branches nationwide are involved to date National Partners: Institute of Museum and Library Services American Library Association Public Library Association Reference and User Services Association FINRA Investor Education Foundation USDA Cooperative Extension Service Money Smart Week by the Federal Reserve Bank of Chicago Federal Deposit Insurance Corp. Federal Trade Commission 19

20 CFPB Financial Education Exchange (CFPB FinEx) consumerfinance.gov/adult-financial-education Online and in-person information exchange for financial educators Receive the latest news and research on financial education from the CFPB Share what s working for you in financial education Connect with your peers in the financial education field Webinars, updates, regional convenings, and more To sign up, CFPB_FinEx@cfpb.gov 20

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22 Questions? Meina Banh, Policy Advisor 22