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Who Should Provide Financial Education?

By: Steve Johnson

6/2/2008 - 28 Comments

Your financial education could be the key to your family’s financial future.

The questions I have is; “Whose responsibility is it to provide education about financial matters?”  Some people say the government, some say the schools, some say the parents and some say it’s up to each individual.

Personal financial blogs like this one aim to help people increase their financial education.  Personal financial blogs provide individuals the financial education that they didn’t get anywhere else, but blogs put the individual in charge of seeking out the information they need. 

The Government

Not many people realize this, but the government realizes the importance of financial education and in 2003 created the “Financial Literacy and Education Improvement Act” to improve the financial literacy and education.  Here is what the published document says,

Taking Ownership of the Future: The National Strategy for Financial Literacy 2006

"Financial Literacy and Education Improvement Act under Title V of the FACT Act (P.L. 108-159) was signed into law by President George W. Bush on December 4, 2003. The Commission was charged by the U.S. Congress to “improve the financial literacy and education of persons in the United States through the development of a national strategy to promote financial literacy and education.”

This Act was passed in direct response to the national low saving rate that has decreased for over a decade which increases the risk that our nation is taking by having such a low saving rate.  Here is an article I wrote last week about the importance of personal saving. Why Do We Need Savings?

The national strategy is to;

1) Building Public Awareness of Available Resources

2) Developing Tailored, Targeted Materials and Dissemination - Resulting in the creation of the website

3) Tapping into Public-Private and Private-Private Partnerships - "Improving the nation’s financial literacy is not a task that can be undertaken solely by the Federal government. “, “The Treasury Department, FDIC, NCUA and OCC will host a series of four regional conferences to share best practices on banking.”

4) Research and Evaluation of Financial Education Programs - Treasure Department will conduct research

The government may not have done everything they could to prevent the current economic downturn, but they did see it coming and did try to increase the national financial education with this Act.

The government also offers many tax incentive programs to encourage savings, like IRA’s, 401k’s, 403k’s and the 529 college savings plan.

The Schools

According to an article on the popular personal financial blog,, schools are teaching very little about personal finances.

“The Street says that 40 states include personal finance to some extent in their educational standards or guidelines, according to the National Council on Economic Education. But the devil is in the details. They say that this may look good, but actually very little financial education is taking place. They state that "only nine states require a course with personal finance content to be offered and only seven states require students to take a personal finance course in high school to graduate (Georgia, Idaho, Illinois, Louisiana, Missouri, South Dakota and Utah)."

The public schools are behind in many areas along with personal finances. The public school system has become very complicated, making it difficult to pinpoint one of two reasons why it is not effective at teaching financial education. A few of the reasons include, the teachers are not adequately trained to teach financial matters, the teachers need to focus on the basic skills of reading and writing in order to pass national standard tests, the increase in social problems among students has made it more difficult to focus students on learning.

The Parents

Parents should be involved in all levels of education, from helping with homework to asking questions about what their children are learning.  Parents naturally teach their children what they know, which is way a large percent of children take up occupations in related fields to their parents.  Parents translate financial knowledge to their children, just as the last decade of easy credit has led many parents to teach their kids how to open credit cards and borrow against their homes.  Parents of the Great Depression taught their children to saving every penny, buy a small house and always have two jobs just in case you lose one. 

Today, the economic hardship will but parents on the budget and their children will learn what it’s like to live with a managed money plan.  This will all naturally take place. The only real risk is if the economy continues to decelerate at a faster pace then families can adjust too.  

The Individual

At the end of the day, everyone needs a financial education and the more you know about money the better prepared you are to secure the future of your family.

We all need more financial education and it’s our responsibility to look for the education we need.  Every day the Internet is at work, bring more information together and making it easy to find and search, at a price that everyone can afford – free.


Governments, schools, and parents all have a responsibility in the financial education of our nation. But, it’s everyone’s responsibility to take advantage of the financial education available to them.  Each one of us is responsible for our financial decisions.  If your school offers financial education classes for your children, consider yourself lucky and sign them up for the classes. Until then, find a good personal financial blog and ask lots of questions.  Before long, you will find what you need.

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