The Treasury Department hopes to create a pyramid, not as opposed to the “food pyramid” for financial literacy so everyone who is trying to work on personal finance will know how to handle money. Despite the fact that one 3rd of Americans are obese showing the food pyramid doesn’t really help, the Treasury Department is nevertheless moving forward. The Treasury Department hopes to start a financial training program for the whole country to use. The “financial training core competencies” are what community opinion is being requested for.
Personal finance difficulties strike the nation
The Good Recession taught us one valuable thing when it comes to personal finance. You will find too numerous financially illiterate Americans. The difficulties in finance, housing and credit taught us a couple of things. One of the most significant things we learned was that there aren’t enough people that know about budgeting, credit, lending, saving and investing. Strategy for promoting basic financial literacy and education as mandated by the Fair and accurate Credit Transactions Act of 2003 is being reviewed. It is reviewed, reports Investment Advisor, from the Treasury Department’s Financial Literacy and Training Commission. Using the “food pyramid” as an example, the Commission is trying to define the basics of financial literacy education for the public in ways that could be readily understood.
What you have to be aware of on economic education
Anytime before September 12, the Treasury Department is accepting many comments. The Federal Register notice explained on August 26 five “financial education core competencies” or five personal finance concepts being proposed that “every American should have command of.” These are:
- Earning: Understanding the difference between gross pay and net pay, employee benefits and taxes and the importance of education.
- Spending: The difference between needs and wants, learning how to create a budget, tracking spending and living within one’s means.
- Saving: Understanding how saved money grows, how to meet long-term goals and wealth building, learning regarding financial institution accounts, understanding economic assets, such as savings accounts and investments.
- Borrowing: Understanding the cost of borrowing and also the role of credit scores.
- Guarding: Learning how to protect assets, choosing the right insurance coverage and knowing how to guard against identity theft.
Seeking consensus on financial education
The financial education field lacks common ground on what it aims to achieve, the Treasury Department said in the Federal Register. It wants to facilitate agreement on appropriate basic content for financial literacy and education. Ted Beck explained that in schools “there’s a wide variance in different kinds of programs, the quality of programs.” He told this to the Dallas Morning News and is of the National Endowment for Financial Education. “The idea of having a really straightforward checklist concerning the basics is something we think is really important.” The core competencies the Treasury wants to put in are, according to a Texas training official, not enough although it is a good start. For example, students should be taught the pros and cons of credit cards, mortgages, payday cash advances and other varieties of borrowing.