Source: http://www.economist.com/news/finance-and-economics/21571883-financial-education-has-had-disappointing-results-past-teacher-leave-them?fsrc=scn/fb/wl/pe/teachleavethemkidsalone
A survey by the Cleveland Fed and a few other sources indicate that Americans have extremely low financial literacy. One survey found that Americans who have taken basic courses in finance such as personal finance or money management were no more financially literate than they were prior to taking the courses. A student survey also found that those who had not taken a finance course are more likely to pay their full credit by the end of the month and avoid the fees. Many Americans are simply uninterested as free online courses are offered to struggling credit card borrowers, yet only .4% accessed the website and .03% completed the course. The Cleveland Fed researchers concluded that there should be additions and improvements to financial education in the United States similar to how the Brits shifted their curriculum. However, many questions are raised from such conclusion.
Who would pay for these educational programs?
Will consumers even budge with the courses (since many Americans would rather seek financial advice than making their own)?
How will we change financial education? Perhaps strengthening mathematics standards at least?
How will we make financial education work? (as the article discussed the lack of effectiveness)
4 comments:
If people don't specialize in one thing, they tend to forget it and to depend on others for making their decisions. I don't think online financial courses will improve the situation as online education still is not familiar with people and students. More financial education in terms of quantity needs to go along with more financial education in terms of quality. The most basic thing we can do is to put a greater emphasis on Math from secondary and high school. Next steps can follow.
I personally feel that these "educational programs" are extremely relevant. No matter what your interest is i think its should be a compulsory subject that high schools offer; be in financial management or any form of principles of finance.At the end of the day we all need to know how to manage our finances. it prevents a lot of personal financial problems.
While I do agree that more schools should offer a personal finance course and that being financially literate is an important skill, a lot of this just comes down to personal responsibility. People can't be made to understand personal finance if they don't want the information. As the article shows, only 0.03% of the people eligible for the free course completed it. The other 99.97% chose not to take full advantage of this course.
I agree with Hung that online courses are not effective as people are still unfamiliar to online course taking. More than just putting a strong emphasis on math though, educational institutions can impose financial focus on math or social science courses in middle school and high school. However, I think the main problem is with American perspective on making financial decisions. The article mentioned how a lot of Americans would rather ask for advice rather than making their own financial decision. With the large amounts of financial consultants in the US, perhaps it is somewhat inevitable that many Americans will struggle with financial decisions.
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