Tuesday, March 27, 2012

Another Call to Arms

Time's Moneyland column this week has a call to arms for proponents of financial literacy.  Looking at new data froth Council for Economic Education (OECD), the piece suggests financial literacy is losing momentum in states. Sadly, this isn't the first column like this.  We blogged about another one here.

What are the reasons?  The reason is not that financial literacy is not important.  But behind the scenes is a robust debate about finding out what works.
They also reflect recent criticisms that have surfaced in the U.S., where academics disagree as to what works as it relates to teaching kids about money. Some think kids don’t retain enough to make the financial education effort worthwhile. Indeed, a series of JumpStart student evaluations has shown that kids, on average, aren’t getting any smarter about budgets and debt. The JumpStart test is now being re-evaluated and recently missed its cycle. At the same time, the prominent financial education booster Lewis Mandell, a senior fellow at the Aspen Institute, even argues that such simple time-honored teaching tools as paying kids a weekly allowance may do more harm than good. He and others would prefer scarce resources be spent on financial education programs aimed at adults and in support of regulations that dictate things like clearer mortgage documents and credit card statements. This is largely what the Consumer Financial Protection Bureau is all about.
Thankfully, the column quotes one OECD official as saying financial literacy is not falling off the federal radar.  It may be time to redouble efforts to ensure it stays on state radars too.