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Financial Literacy Strategies: Where Do We Go From Here?

Author

Listed:
  • Robert I. Lerman
  • Elizabeth Bell

Abstract

The evolution of market economies has dramatically broadened the opportunities of consumers, workers, investors, and firms. Financial services have become especially free and accessible, but also increasingly complex. For the new financial freedom to help most people, they must understand their choices and the likely implications of alternative decisions. Unfortunately, many Americans have a weak grasp of basic personal finance principles. This paper emphasizes the importance of financial literacy in an increasingly complex market economy and examines the current state of financial education in the U.S. and abroad. We explore two methods of delivering financial knowledge—through broad financial curriculums and through more focused 'teachable moments.' After examining the pros and cons of each, along with the evidence about their effectiveness, we suggest that a combination of the two perspectives, with the specific topics and behavioral strategies varying by target audience. We conclude by calling for a more rigorous evaluation of the effects of existing programs.

Suggested Citation

  • Robert I. Lerman & Elizabeth Bell, 2006. "Financial Literacy Strategies: Where Do We Go From Here?," NFI Policy Briefs 2006-PB-10, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfipbs:2006-pb-10
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    File URL: http://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/2006-PB-10_Lerman-Bell.pdf
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    References listed on IDEAS

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    5. Patrick J. Bayer & B. Douglas Bernheim & John Karl Scholz, 2009. "The Effects Of Financial Education In The Workplace: Evidence From A Survey Of Employers," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 605-624, October.
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    Cited by:

    1. John A. Tatom, 2010. "Financial Wellbeing and Some Problems in Assessing Its Link to Financial Education," NFI Working Papers 2010-WP-03, Indiana State University, Scott College of Business, Networks Financial Institute.
    2. Eurico J. Ferreira & Concetta A. DePaolo & Harry Edward Gallatin, 2011. "Assessing Finance Literacy Teaching at Indiana State University," NFI Working Papers 2011-WP-24, Indiana State University, Scott College of Business, Networks Financial Institute.

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