Effective Youth Financial Education: Turning Research Into Action

Skills, habits, attitudes, values, and knowledge acquired in childhood and adolescence are fundamental for achieving financial well-being in adulthood, particularly given the current levels of complexity in the financial marketplace. Until recently it has been hard for educators to access an evidence-based pedagogy that laid out the skills and capabilities that youth need to acquire at the appropriate developmental stage. The Consumer Finance Protection Bureau (CFPB) has conducted extensive research to develop a coherent framework to build youth capabilities. The approach is based on three key building blocks: developing overall executive functioning, acquiring automatic financial norms and habits used in day-to-day decision making, and mastering the financial knowledge and decision-making skills required to make informed plans and financial choices. The CFPB has also developed a rich database of associated activities for both educators and families to assist children and youth in achieving both financial security and the freedom to make choices in their adult lives. Building these skills in children and youth is an important mechanism for ensuring greater equity for communities that have historically had less access to experience in financial markets, been traditionally marginalized, or that are targeted by predatory practices.