APRIL 2013

Transforming the Financial Lives of 

a Generation of Young Americans

POLICY RECOMMENDATIONS FOR ADVANCING K-12 FINANCIAL EDUCATION
2 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

Message from 

Richard Cordray

Director of the CFPB

When America was confronted with the worst financial crisis since the Great Depression, many 

families felt helpless in the face of joblessness, falling home prices, the rising cost of higher 

education, and diminished savings. Many were shaken in their deeply held belief that they 

could work hard, behave responsibly, and get ahead in life. As the American economy recovers, 

we want consumers to be able to look ahead with renewed hope and resilience.

The Consumer Financial Protection Bureau (CFPB) is working toward an improved marketplace 

by providing effective rules, consistent oversight, and evenhanded enforcement. Moreover, we 

seek to ensure that product marketing and disclosures are transparent, so individuals may 

compare products and make informed decisions. And we want consumers of all ages to have the 

opportunities and resources to improve their financial capability so they are able to navigate the 

financial marketplace effectively and take more control over their economic lives.

During my years in state and local government, I became deeply engaged in consumer finance 

issues. I saw good people struggling with debt they could not afford. Sometimes they made bad 

decisions they came to regret. Sometimes an unexpected event – like a loved one getting sick or 

a family member losing a job – overwhelmed even their most careful planning. Still other times, 

I saw unscrupulous businesses that obscured loan terms or engaged in outright fraud.

Many people struggle to understand financial matters, and this lack of understanding can lead

them into trouble or make their financial problems harder to overcome. At the CFPB, we are 
3 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

uniquely positioned to address these issues by helping to bridge the gap between people’s actual 

financial capabilities and the increasingly complex financial decisions they have to make.

We are deeply committed to a vision of an America where everyone is financially educated. But 

the challenges that confront us in achieving this goal are complex, varied, and significant. To 

face these challenges, we must see that people can learn financial management skills throughout 

life – in schools and in places of work and worship. But we should start where all good education 

starts – with our children.

Young people today and future generations should not have to repeat the financial mistakes 

made by earlier generations. This is why the CFPB is supporting a plan to bring financial 

education into K-12 classrooms. We are also committed to engaging and supporting teachers 

and parents who are some of our most important allies. I believe the financial education policy 

recommendations outlined in this white paper have the potential to transform the financial lives 

of a generation of Americans.

We look forward to collaborating with the many public, private, and nonprofit stakeholders and 

allies to advance this policy dialogue and help bring meaningful financial education

opportunities to millions of American youth. 

Sincerely,

Richard Cordray
4 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

Table of contents

Message from Richard Cordray ................................................................................ 2

1. Introduction .......................................................................................................... 5

2. What is the problem?........................................................................................... 9

3. What are the current approaches?................................................................... 12

3.1 Teaching financial education in schools .................................................13

3.2 Bank-at-school programs........................................................................ 15

3.3 Youth savings accounts ........................................................................... 17

3.4 Non-school-based learning.....................................................................18

3.5 Online teaching tools and resources...................................................... 20

3.6 Additional experiential learning opportunities ......................................21

4. CFPB's recommendations for advancing financial education and 

capability ............................................................................................................ 23

4.1 Teach financial education early and consistently through K-12 

years........................................................................................................25

4.2 Introduce financial education concepts into standardized 

tests..........................................................................................................27

4.3 Create innovative hands-on learning opportunities.............................. 30

4.4 Create consistent opportunities and incentives for teacher training......32

4.5 Encourage parents to discuss money management topics at home..........33

5. Conclusion ......................................................................................................... 35
5 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

1. Introduction

The recent economic downturn raised awareness about the complex nature of our financial 

marketplace and how unprepared many Americans are to navigate the array of choices before 

them. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established 

the Consumer Financial Protection Bureau (CFPB), and mandated the creation of the Office of 

Financial Education within the CFPB to educate American consumers and help them make 

better-informed financial decisions.

To prepare Americans to make sound financial decisions, the CFPB is pursuing a broad and 

holistic approach, which includes strategies that:

• Help make financial markets and products safer for consumers;

• Increase transparency to enable individuals to compare products and make informed 

decisions; and

• Promote policies that help consumers of all ages improve their financial knowledge and 

capability in ways that will enable them to navigate the financial marketplace effectively 

and take more control over their economic lives.

Consistent with this approach, the CFPB is also identifying opportunities for broader policy 

coordination on financial education among a range of stakeholders in the nonprofit, 

government, and private sectors.

The purpose of this white paper is to outline how the ongoing struggle of many consumers to 

manage their finances can be mitigated in the future by focusing specifically on youth financial 

education. What we propose here is a comprehensive strategy to impart personal financialmanagement skills to young people while they are in school. We are focusing on school-based 

financial education policy for two reasons: first, most Americans are poorly prepared to make 

informed financial decisions; second, school-based financial education has the potential to 
6 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

reverse the current trend of poor financial preparation for future generations of American 

consumers.

It is not difficult to understand why it is important for American consumers to master personal

financial-management skills. American consumers often learn about managing their finances by 

making mistakes. Some of these mistakes can be very costly. For example, when consumers 

make an ordinary financial mistake such as being late on monthly credit card payments, they 

can have a poor credit report.

As we know, unfavorable credit reports can have potentially far-reaching consequences for 

consumers beyond the credit market. Organizations increasingly use credit reports to make 

decisions beyond determining a consumer’s eligibility for credit. For example, organizations can 

access an individual’s credit report when determining eligibility for rental housing and checking 

accounts, setting premiums for auto and casualty insurance in some states, and making hiring 

decisions. Consumers can trigger wide-ranging consequences when they make seemingly small 

mistakes. Thus, consumers need to acquire the knowledge, skills, and decision-making abilities

to manage their finances.

From our vantage point, there is a very promising opportunity to help consumers become 

informed financial decision makers by focusing financial education efforts on young people. In 

the U.S., we should start young people on the road to continuous money management practice 

by systematically introducing age-appropriate financial education lessons and activities during 

the K-12 school years. When we start early with age-appropriate and relevant financial 

education and consistently reinforce those lessons throughout the K-12 years, we can give young 

people more chances to develop positive habits and behaviors.

Due to young people’s current high levels of financial activity, it is imperative to introduce 

personal financial management early. America’s children and youth spend roughly $211 billion 

annually.1 According to the Financial Industry Regulatory Authority (FINRA) Investor 

Education Foundation’s 2009 National Financial Capability Survey, approximately 72 percent of 

 

1 2012 Harris Poll Youth Plus. Harris Interactive. “$211 Billion and So Much to Buy – American Youths, the New Big 

Spenders.” http://www.harrisinteractive.com/NewsRoom/PressReleases/tabid/446/ctl/ReadCustom%20Default/

mid/1506/ArticleId/896/Default.aspx (October 26, 2011) (accessed April 5, 2013).
7 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

youth (defined as 18 to 24 years old) have a checking account and approximately 62 percent 

have a savings account, money-market account, or CD.

2

Although young people tend to be unbanked or underbanked at higher rates than adults, they 

are increasingly utilizing a patchwork of newer financial products. Some of these products are

offered by specialized providers through retail channels, including stored-value cards (e.g., gift 

cards), prepaid debit cards, while others are utilized online such as PayPal, and mobile payment 

methods. In light of these changes and the growing complexities of the marketplace, young 

people have a greater need than ever before for resources that help improve their financial 

knowledge and capability. Schools and youth centers are logical places to provide exposure to 

financial concepts and opportunities for practical experience.

As we further discuss our policy proposal, it is important to acknowledge that there is already an 

ongoing and well-developed conversation about promising practices in promoting financial 

education and capability for children and youth. The CFPB enters this conversation to facilitate 

a national focus on how state and local policy leaders can develop and implement

comprehensive financial education strategies for K-12 students that are appropriate for their 

educational locales. Here, we briefly outline the five essential strategies that we believe could 

positively transform the financial lives of a generation of young Americans:

 Recommendation 1: Introduce key financial education concepts early and 

continue to build on that foundation consistently throughout the K-12 school years.

In addition, CFPB encourages states to make a stand-alone financial education 

course a graduation requirement for high school students.

 Recommendation 2: Include personal financial management questions in 

standardized tests.

 Recommendation 3: Provide opportunities throughout the K-12 years to practice 

money management through innovative, hands-on learning opportunities.

 

2 FINRA Investor Education Foundation. “Financial Capability in the United States, 2009 Nation Financial 

Capability Study.” 

http://www.finrafoundation.org/web/groups/foundation/@foundation/documents/foundation/p120535.pdf

(accessed April 1, 2013): 51-52.
8 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

 Recommendation 4: Create consistent opportunities and incentives for teachers 

to take financial education training with the express intention of teaching financial 

management to their students.

 Recommendation 5: Encourage parents and guardians to discuss money

management topics at home and provide them with the tools necessary to have 

money conversations with their children.

The remainder of this white paper provides an overview of the financial decision-making context 

that Americans navigate, surveys some existing efforts in K-12 financial education, and 

addresses each of these elements of a comprehensive youth financial education strategy.
9 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

2. What is the problem?

This white paper identifies two main problems: First, many young people are ill-equipped to 

make major financial decisions, and second, young people confront a financial services 

marketplace that involves increasingly complex financial decisions. 

Many young people transition to adulthood without having developed the basic financial 

knowledge, skills, and behaviors that are critical for establishing healthy financial futures. Many 

factors account for this, but chief among them are that 1) in most states, schools are not required 

to teach young people personal finance, and 2) many parents are unsure about when and how to 

talk to their children about money. As a result, young people have their first formal financial 

experiences when they enter the labor market lacking practical money management training or 

skills.

In addition to having their first financial experiences largely through their participation in the 

labor market, young people confront a financial marketplace that is significantly more complex 

than the one their parents first encountered as young adults. It is important to note that while

earlier generations of Americans may only have had to choose among providers of savings and 

checking accounts and mortgage and auto lenders, today’s youth have to choose from a large 

array of financial products and services. For example, in the payments arena, they may use 

prepaid debit cards, stored-value cards (e.g., gift cards), mobile methods of payments (such as 

“mobile carrier billing” where third parties can place charges on monthly phone bills, and/or

online payment options such as PayPal). The array of choices now available to young consumers 
10 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

gives rise to a trend the Center for Financial Services Innovation (CFSI) labels an “a la carte”

approach to financial services.3

Given the increasing complexity of the financial services landscape, young people have a greater 

need for resources to guide their financial decisions and improve their financial capability than 

may have been the case for earlier generations of Americans.

4

Yet, the unfortunate fact is that young people are often unprepared to navigate this complex

landscape. A 2008 national survey by the Jump$tart Coalition found that the “financial literacy 

of high school students has fallen to its lowest level ever, with a score of just 48.3 percent.”

5 It 

appears that neither parents nor schools are adequately preparing students to manage their 

finances. A 2011 survey conducted by American Express found that a majority of parents with 

children in high school or college gave schools below-average or failing grades in teaching 

responsible spending.

6 Young people are vulnerable to misinformation and often make costly 

mistakes at important financial decision points.

The result of a poorly prepared youth population is a generation of consumers who struggle to 

make informed financial decisions. Indeed, a 2009 FINRA Investor Education Foundation 

survey of 28,000 American adults found that more than half of all respondents live paycheck-topaycheck and a significant majority of respondents (60 percent) reported not having a “rainy 

day” fund to cover three months of unanticipated financial emergencies.7 In addition, between 

 

3 Stone, Corey, and Joshua Sledge. “Financial First Encounters: The Fractured Financial Landscape Facing Youth 

Today.” http://www.cfsinnovation.com/publications/article/440710 (accessed April 4, 2013): 5.

4 Stone, Corey, and Joshua Sledge. “Financial First Encounters: The Fractured Financial Landscape Facing Youth 

Today.” http://www.cfsinnovation.com/publications/article/440710 (accessed April 4, 2013): 5.

5 Mandell, Lewis. “The Financial Literacy of Young American Adults: Results of the 2008 National Jump$tart 

Coalition Survey of High School Seniors and College Students.” 

http://www.jumpstart.org/assets/files/2008SurveyBook.pdf (accessed April 4, 2013) (2008): 5.

6 American Express. “No Triple ‘AAA’ Ratings for Schools That Fail to Teach ‘Safe Spend.’” 

http://about.americanexpress.com/news/pr/2011/safespend.aspx (accessed April 8, 2013) (August 10, 2011).

7 FINRA Investor Education Foundation. “States Ranked Most and Least Likely to Engage in Five Key Measures of 

Financial Capability, 2009 National Financial Capability Study.” 

http://www.usfinancialcapability.org/download/State_rankings_rev_101202.pdf (accessed April 12, 2013).
11 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

2004 and 2009, one in four respondents engaged in some form of high-cost, non-bank 

borrowing, including taking out a payday loan or getting an advance on a tax refund.

8 By failing 

to start young people on a path to successful personal money management, we leave a legacy of 

consumers who are ill-prepared to understand the risks and consequences of financial products, 

services, and decisions.

Young people are not prepared to manage their finances when they reach adulthood. At the 

same time, the current financial services marketplace is increasingly complex. In the face of 

this very real need, American education should include approaches to teach young people about 

their finances. Part of that task starts at home. But young people spend the majority of their 

time in school, therefore it makes sense to offer financial education early and consistently

throughout the K-12 school years.

 

8 FINRA Investor Education Foundation. “States Ranked Most and Least Likely to Engage in Five Key Measures of 

Financial Capability, 2009 National Financial Capability Study.” 

http://www.usfinancialcapability.org/download/State_rankings_rev_101202.pdf (accessed April 12, 2013).
12 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

3. What are the current

approaches?

There is broad agreement on the importance of teaching financial education and capability to 

children and youth. However, there is little agreement about what constitutes effective financial 

education and capability initiatives. Thus, many organizations have developed a range of 

programs, and policies with varying state and national guidelines to help young people increase 

financial knowledge, develop money management skills, and in some cases, practice financial 

decision making.

The current landscape of programs geared toward improving the financial knowledge and 

capability of youth (e.g., access to appropriate products, skills, and decision-making) includes: 

• Teaching financial education in K-12 schools;

• Providing “bank-at-school” programs;

• Providing matching incentives in specialized savings accounts;

• Providing non-school-based learning opportunities; and

• Using online learning tools and resources.

Many of these strategies and programs also employ experiential learning techniques.

9

While there is a broad array of youth financial education strategies, there is, simultaneously, a 

relative absence of rigorous program evaluation and research to measure the effectiveness of 

 

9 Experiential learning is the process of deriving meaning from direct or hands-on experiences.
13 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

existing financial education offerings. This makes it difficult for policymakers to determine 

which strategies to embrace and implement.10

In the following subsections, we review examples of K-12 financial education initiatives 

currently underway. These examples are illustrative of efforts occurring throughout the country. 

This discussion is not intended as an exhaustive overview of current programs, nor does it 

indicate an endorsement of these programs or the organizations associated with them.

3.1 Teaching financial education in schools

A number of states have recognized the connection between including financial education into 

school curricula and financial capability later in life. As of 2011, policymakers in 22 states had 

enacted laws requiring high school students to take an economics course as a graduation 

requirement, and 13 states required students to take a personal finance course (or personal 

finance included in an economics course) as a high school graduation requirement.

11

 

10 Although the Center for Financial Services Innovation has provided some guidance by identifying those program 

elements that have been found to be effective at promoting financial capability, it is clear that additional, rigorously 

derived evidence and data would be required for policymakers to choose among those financial education curricula 

and programs that consistently promote behavioral change and positive financial outcomes later in life. Center for 

Financial Services Innovation. “From Financial Education to Financial Capability: Opportunities for Innovation.” 

http://www.cfsinnovation.com/system/files/InBrief_FinancialCapability_Mar22010.pdf (accessed April 12, 2013).

11 Council on Economic Education, “Survey of the States,” http://www.councilforeconed.org/wp/wpcontent/uploads/2011/11/2011-Survey-of-the-States.pdf (March 2012) (accessed April 20, 2013): 7.
14 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

FIGURE 1: STATUS OF PERSONAL FINANCE EDUCATION ACROSS THE NATION - 2011

Source: Survey of the States, Council on Economic Education, http://www.councilforeconed.org/wp/wpcontent/uploads/2011/11/2011-Survey-of-the-States.pdf

Popular approaches for teaching financial education in schools include the following:

 Integrated curricula: Adding financial education concepts and lessons into 

existing curricula enables students to see the intersection between core subjects (e.g.,

math, language arts, and social studies) and personal finance. For example, the K-6 

Everyday Math program developed at the University of Chicago focuses on using 
15 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

math to solve practical problems (e.g., making change, doing tally lists), thereby 

getting financial issues into the standard mathematics curriculum.12

 Separate curricula dedicated to teaching personal finance: These classes 

are typically offered in high schools and are often geared toward graduating seniors

who are on the verge of going out on their own as adults to become financially 

responsible for their own decisions. For example, Utah requires a stand-alone

financial education course for high school graduation. Designed for juniors and 

seniors, the half-credit course teaches to four core standards: financial decisionmaking and goals; income and careers; principles of money management; and 

savings, investing, and retirement planning.

Many state and education leaders have also implemented education content standards for 

teaching personal finance. Education standards outline expectations about the knowledge, 

concepts, and skills that students should acquire at each grade level. Forty-six states now 

include personal finance in their curriculum standards.13 It is important to note that states can 

adopt personal finance content standards but stop short of requiring schools to implement those 

standards. When the law does not require implementation of specific education standards, they 

become voluntary and less effective, tending to take a back seat to the required education 

standards.

3.2 Bank-at-school programs

Schools throughout the country have partnered with banks and credit unions to start bank-atschool programs, which provide children and youth with classroom-based financial education, 

the opportunity to open deposit accounts on the school premises, and the ability to make regular 

small deposits. Many programs also give students the opportunity to manage the school bank or 

credit union branches as student bankers or junior tellers. Young students may learn more from 

 12 University of Chicago School Mathematics Project, Everyday Mathematics, 

http://everydaymath.uchicago.edu/about/, (accessed April 20,2013)

13 CFED: Assets & Opportunity Scorecard. “Policy Brief: Financial Education in Schools.”

http://cfed.org/assets/scorecard/2013/pb_FinancialEducationSchools_2013.pdf (October 2012) (accessed April 5, 

2013).
16 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

financial education in classrooms when they can also practice using appropriate financial 

products and services. Students with savings accounts and the ability to make regular deposits

at school have an opportunity to apply financial knowledge and skills learned in the classroom. 

This activity increases the relevance of the instruction and can lead to greater engagement.

Because many of the program designs and partnerships occur at the local or regional levels, it is 

unclear how many bank-at-school programs are in operation. Examples of such programs 

include:

 School $ense and Money F-I-T: School $ense is a bank-at-school program 

operating in Eau Clair, Wisconsin schools. The program provides personal finance 

instruction in fourth- and fifth-grade classes. In six of the 13 elementary schools in 

the Eau Clair school district, students have access to in-school credit union branches 

where students can open savings accounts and make regular savings deposits in 

these accounts. The Money F-I-T research pilot is examining whether fourth- and 

fifth-grade students learn more from personal finance instruction when they have a 

credit union branch in their school. The program will provide valuable insight into 

the effective strategies for teaching personal finance to elementary school students. A 

similar program, Smarter Texans Save, has been launched in Amarillo, Texas. As part 

of its Assessing Financial Capability Outcomes research initiative, the U.S.

Department of the Treasury is funding the evaluation of the Money F-I-T research 

pilot.14

 Capital One student-run bank branches: Branches have been established in 

Newark, New Jersey, as well as in the Bronx and Harlem in New York City. The inschool branch offers a limited menu of products designed primarily for student 

savers. The school branch is managed by high school seniors who also teach fellow 

students the importance of money management skills.

 Delaware Bank-at-School programs: These programs give students access to 

savings accounts at no cost. As of 2012, the state had more than 70 bank-at-school 

 14 Money F-I-T, Center for Financial Security, accessed April 23, 2013, http://moneyfitcfs.com/aboutmoney-f-i-t/ , 
17 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

sites with more than 4,000 depositors.

15 Students also have an opportunity to serve 

as junior tellers at the school branch. Although classroom financial education is not 

required, teachers receive financial education lessons that correlate with the state 

standards in economics.

3.3 Youth savings accounts

A number of organizations – particularly nonprofits, educational institutions, and government 

agencies – have developed savings accounts for children and youth with built-in matching 

incentives and/or prizes to promote the habit of saving, financial goal setting, and, in some 

programs, college access. These savings accounts are often paired with some form of financial 

education.

One positive correlation between having an account and having savings was documented in a 

2010 study conducted by the Center for Social Development at Washington University in St. 

Louis, which found that students who expect to graduate from a four-year college and have an 

account are substantially more likely to attend college than youth who have no account.16

Examples of savings products geared toward youth include:

 Make Your Path (MY Path): This initiative helps low-income youth in San 

Francisco develop healthy financial habits and behaviors by combining the following 

elements: financial education developed and delivered by peers; an emphasis on 

setting and achieving savings goals; opportunities to engage with common financial 

products and services such as savings accounts; and a focus on behavioral economics 

that removes barriers to account setup through automated savings-account setup. 

The pilot uses a hands-on, experiential approach, with an emphasis on peer learning 

 

15 Delaware Financial Literacy Institute website. http://www.dfli.org/index.cfm?ref=05000 (accessed April 4, 2013).

16 Elliott III, William, and Sondra Beverly. “The Role of Savings and Wealth in Reducing ‘Wilt’ Between Expectations 

and College Attendance.” Journal of Children & Poverty, 17 (2) (2011): 165.
18 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

and support. Mission SF Community Financial Center launched this program in 2011 

in partnership with the Mayor’s Youth Employment and Education Program, the 

city’s largest youth employment program.

 Kindergarten to College (K2C): The first publicly-funded, universal children’s

college savings-account program in the U.S., this program provides every 

kindergartener attending public school in San Francisco with a college savings 

account containing a $50 deposit from the city and county of San Francisco. Children 

enrolled in the National Student Lunch Program receive an additional $50 deposit. 

The program offers incentives to save earlier and to save more. Foundations, 

community organizations, local businesses, and individuals provide additional 

deposits and matching incentives. In addition, schools are integrating financial 

subjects into the K-12 math curriculum, with each child’s K2C account serving as a 

teaching tool.

 Youth Savings Account: This program gives Native American high school 

students in two participating New Mexico schools access to a savings account and a 

$50 seed deposit. Students who keep the account open and make deposits are 

entered into a lottery to win $100 at the end of the semester. This program pairs 

access to incentivized savings accounts with classroom financial education. The 

program is offered by First Nations Development Institute.

 KIPP College Account: This special savings account is available to students in 

grades five through 12 at some KIPP DC schools. The account provides a $50 seed 

deposit and additional dollar-for-dollar matching incentives. Students who go on to 

college receive the accumulated savings in the form of a scholarship.

3.4 Non-school-based learning

Many financial education courses are conducted via community programs and services. This 

helps take some pressure off schools dealing with funding challenges and allows for other 

funding opportunities. Faith-based groups, community organizations, industry trade 

associations, and others are creating opportunities to provide financial education to youth. By 

offering tailored programs, materials, and other avenues of learning accessible to students, these 

groups help youth who may otherwise not have an opportunity to be exposed to financial 

education. Examples of these programs include: 
19 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

 Junior Achievement Finance Park: This program helps students build financial 

skills by engaging them in experiential, hands-on learning opportunities on topics 

related to entrepreneurship, work readiness, and financial literacy. The on-site 

activities are managed in a dynamic environment outside the classroom. There are 15 

permanent Junior Achievement Finance Park facilities across the country.

 The Boys and Girls Clubs of America: In collaboration with the Charles Schwab 

Foundation, the Boys and Girls Clubs of America educate teens about money and 

finance through the Money Matters: Make It Count Program.

17 This financial literacy 

program consists of interactive activities and exercises on topics such as using a 

checking account, creating a spending plan, managing debt, saving for college, and 

learning the basics of investing.

 National Endowment for Financial Education (NEFE): This program

emphasizes the importance of using multiple financial-literacy tools to educate young 

people. Fun online games, classroom instruction, community-based learning, and 

home-based study can all work toward producing well-rounded, highly-efficient,

financially-literate students. The NEFE High School Financial Planning Program 

provides students in grades eight through 12 with the opportunity to develop 

personal-finance skills.

 4-H Youth Development: This program offers a variety of age-appropriate,

financial-learning experiences for youth ranging from Reading Makes Cents to 4-H 

Build a Million. The 4-H program’s learn-by-doing philosophy engages youth in 

strategies to learn financial terms and practice financial activities, including being 

treasurers of their 4-H clubs. As they learn how to budget and manage their projects 

from start to finish, they develop lifelong financial capability.18

 

17 Money Matters: Make It Count. Program information. http://moneymattersmakeitcount.com/Pages/default.aspx

(accessed April 8, 2013).

18 4-H Youth Development. Ohio State University Extension. Real Money. Real World.

http://realmoneyrealworld.osu.edu/documents/RMRW_FollowUpStudy_execsum.pdf (2009): 2.
20 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

3.5 Online teaching tools and resources

The financial education field has developed an array of online teaching tools for supporting 

financial education. Examples of the types of offerings available include online training 

modules, online or mobile gaming (also known as financial entertainment), as well as numerous

websites with useful calculators and resources.

 MyMoney.Gov: The website organizes financial education resources from more 

than 20 different federal agencies and websites in one place. This federal government

website is dedicated to helping all Americans learn the basics of financial education. 

The website provides information, tools, and resources to help consumers make 

sound financial choices. 

 Money Smart Young Adult: The Federal Deposit Insurance Corporation offers 

this program. This free, self-paced program for youths 13 and older features a gamebased learning design. In addition, the program aligns with educational standards in 

all 50 states, the District of Columbia, Guam, and the Virgin Islands, as well as 

Jump$tart financial education standards and the economic education standards 

developed by the National Council on Economic Education. 

 Practical Money Skills for Life: Developed by Visa, this website allows 

consumers, educators, parents, students, and policymakers to access free financial 

education resources, such as a pre-K-12 curriculum; online games (such as financial 

football); and videos developed in partnership with Khan Academy, a nonprofit that

provides original lessons on a range of subjects through free video content.

 Doorways to Dreams (D2D): This national nonprofit has created games to 

improve financial engagement and capability of low-and moderate-income (LMI) 

consumers. Although these financial-entertainment games are geared toward women 

and LMI adults, player data revealed that the games were growing organically in 

popularity among high schoolers and middle schoolers. Through partnerships with 

government and education leaders, D2D hosts tournaments where youth play the 

games for the chance to win prizes such as $25 savings accounts and scholarships.

 Vault – Understand Money and EverFi – Financial Literacy: These learning 

platforms use video, animation, 3-D gaming, avatars, and social networking to bring 
21 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

complex financial concepts to life for children and youth. Vault – Understanding 

Money is an interactive program designed to teach and help students in grades four 

through six build the foundation for making good financial decisions. EverFi –

Financial Literacy is a new-media program geared at students in grades nine through 

12 that covers topics such as credit cards, savings, and investments.

3.6 Additional experiential learning 

opportunities

Experiential learning is an important way to increase student engagement and improve 

learning. Experiential learning involves a cycle of action, reflection, conceptualization, and new 

experiences.19 Teaching methods in experiential education include practice-based learning, roleplay, simulation, imagination, inner exploration, encounter, and group work. A number of 

programs and strategies that have already been highlighted, at their core, provide opportunities 

to learn through experiential techniques. For example, programs that pair financial education 

with savings accounts at schools, special goal-based savings accounts with built-in incentives,

and game-based learning all have some element of experiential learning. Additional examples of 

experiential learning opportunities include:

 Girl Scouts of the USA: This organization provides young girls with moneyearning projects such as selling cookies. As part of this program, girls learn about 

goal setting, decision-making, and money management, among other things. This 

program employs encounter-based experiential learning to help girls gain financial 

knowledge and develop important skills. In 2011, Girl Scouts of the USA introduced 

a new set of financial-literacy badges for girls in K-12 grades.

 Boys Scouts of America: The Boy Scouts offer a merit badge for personal 

management. Earning the badge means the Boy Scout set short- and long-term 

financial goals and discussed them with his family; developed a spending plan; 

 

19 Johnson, Elizabeth and Margaret S. Sherraden. “From Financial Literacy to Financial Capability Among Youth.”

Working Paper 06-11 (2006) (accessed April 8, 2013):11.
22 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

balanced a budget; put money into a savings account; analyzed how to manage 

money better; and studied insurance, cost of credit, and how to manage debt, as well 

as investing in stocks, bonds, and mutual funds.20

 My Classroom Economy: This classroom-management system is available to K-12 

educators to teach age-appropriate personal-finance lessons through experiential 

learning. Teachers and students establish a simple classroom economic system where 

students need to earn a paycheck in the form of “school dollars” by taking on 

classroom jobs. With the school dollars they earn, students are required to pay rent 

for their desks, pay fines for violations, and have the option to invest with 

accumulated savings. This program helps students learn financial skills and decisionmaking through simulations and role-playing.

 

20 Boy Scouts of America. Personal Management Merit Badge Series (BSA Supply No. 35928). 

http://www.scouting.org/scoutsource/BoyScouts/AdvancementandAwards/MeritBadges/mb-PERM.aspx (accessed 

April 11, 2013).
23 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

4. CFPB’s recommendations

for advancing financial 

education and capability

States can help determine the quantity and quality of the financial education that most students 

receive through a variety of policy options. States can explicitly mandate that high school 

students complete a stand-alone course in personal finance. In addition, states can require

school districts to include personal finance in the curriculum of other courses, such as family 

and consumer sciences, economics, mathematics, business education, agricultural sciences, and 

social studies. As an incremental step, states can require schools to offer an elective course in 

personal finance, but stop short of making it a condition for graduation.21 This plurality of policy 

solutions adopted by states reinforces the broad agreement that it is good public policy to 

include financial education in the K-12 curriculum.

Because education policy is determined at the state and local levels, there is a range of 

approaches for supporting financial education. This raises the question of whether more can be 

done to pursue a common policy framework that supports the current diverse approaches 

among states. While there can and should be many types of financial education in schools –

particularly to reflect the unique needs and diversity of each community – these approaches 

could benefit from sharing a common strategic point of departure. In this respect, the

development of the Common Core State Standards is instructive. Forty-five states, the District of 

Columbia, four territories, and the Department of Defense Education Activity have adopted the 

 21 By making financial education optional, however, many students are able to graduate without developing 

important financial skills.
24 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

Common Core Standards in K-12 Mathematics and English Language Arts.22 These new 

standards create a shared understanding of the cognitive theory behind the organization, 

approach, and curricula for Math and English Language Arts.

A coordinated strategy similar to the Common Core could anchor the efforts underway to 

provide financial education and capability in schools. In our view, there is sufficient directional

evidence to propose a comprehensive strategic policy framework for financial education in 

schools; the evidence will be discussed below.

We believe that these five essential strategies, if implemented by state policymakers and 

education leaders, could transform the financial lives of a generation of young Americans:

 Recommendation 1: Introduce key financial education concepts early and 

continue to build on that foundation consistently throughout the K-12 school years.

In addition, CFPB encourages states to make a stand-alone financial education 

course a graduation requirement for high school students.

 Recommendation 2: Include personal financial management questions in 

standardized tests.

 Recommendation 3: Provide opportunities throughout the K-12 years to practice 

money management through innovative, hands-on learning opportunities.

 Recommendation 4: Create consistent opportunities and incentives for teachers 

to take financial education training with the express intention of teaching financial 

management to their students.

 Recommendation 5: Encourage parents and guardians to discuss money 

management topics at home and provide them with the tools necessary to have 

money conversations with their children.

 

22 In the States. Common Core State Standards Initiative. http://www.corestandards.org/in-the-states (accessed 

April 12, 2013).
25 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

4.1 Teach financial education early and 

consistently through K-12 years

Most U.S. students spend an average of six-and-a-half hours per day in school for 180 days a 

year.

23 By the time they graduate, we expect them to be able to read, write, master everyday 

math skills, engage in effective teamwork, and possess some personal judgment that helps them 

make sound decisions. When young people transition to adulthood, they also confront a number 

of financial decisions: how to use credit, how to manage household expenses with earnings, and 

what types of financial products to use. Yet, in a number of states financial education is absent 

from the school day throughout the 13 years that students spend in the K-12 realm.

When young people lack the skills to engage in effective financial decision-making, they can 

incur unnecessary debt, miss opportunities to save money, and develop a poor credit history.

The absence of money management skills can have a significant impact on their ability to access 

basic necessities, such as checking and savings accounts, rental housing, and employment –

opportunities and resources that are essential to building financial stability. It is unfortunate 

that such critical life skills are often left out of the required course of study.

Why is it important to focus on building these financial skills early? First, when we teach 

financial concepts early, we can catch young people at critical developmental stages and can 

influence how they manage financial matters throughout their lives. Cognitive development 

theory and related research suggests that the elementary school years may be a window of 

opportunity during which education can influence financial behavior later in life.24 Although 

 

23 The Center for Public Education. “Time in School: How Does the U.S. Compare?”

http://www.centerforpubliceducation.org/Main-Menu/Organizing-a-school/Time-in-school-How-does-the-UScompare (accessed April 5, 2013).

24 Collins, J. Michael et al. “Determining What Works: A Framework for Evaluating Financial Literacy Education in 

Elementary School.” Center for Financial Security. 

http://moneyfitevaluation.files.wordpress.com/2012/06/determining-what-works-2012.pdf (accessed April 1, 2013): 

3.
26 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

young children’s financial understanding is unsophisticated, scholars suggest that elementaryschool-age children can grasp basic economic concepts such as savings, barter, scarcity, and 

supply and demand. 25 Second, recent research demonstrates that young people begin to form 

financial identities early and that those identities are correlated with financial capability later in 

life.26 It is clear that starting financial education early has important benefits for young people.

In addition to starting early, youth financial education should be continuous. Like other areas of 

study, developing financial knowledge, skills, and the decision-making capacity needed to

navigate the financial services marketplace successfully requires consistent learning 

opportunities throughout a person’s education and even throughout a person’s lifetime. By 

integrating financial education lessons in school curricula – such as the Family, Career and 

Community Leaders of America programs led by Family and Consumer Sciences educators –

students can learn, for instance, about the benefits of compound interest in math class, the 

basics of economic costs and risks in social studies class, and sharpen writing skills by 

composing essays about how we manage money or how we can take control of our financial lives 

to achieve our goals.

When we start early and build financial skills throughout their K-12 education, we give young 

people time to grow and comprehend more as they go through natural developmental stages.27 A 

longitudinal research study of university students conducted in 2011 as part of the Arizona 

Pathways for Life Success in University Students (APLUS) program found that high school and 

college students who are exposed to ongoing or cumulative financial education show an increase 

in financial knowledge, which, in turn, drives increasingly responsible financial behavior as they 

 

25 Sherraden, Margaret S., Lissa Johnson, Baorong Guo, and William Elliott. “Financial Capability in Children: 

Effects of Participation in a School-Based Financial Education and Savings Program.” Journal of Family and 

Economic Issues. 32 (3) (2011): 385-399.

26 Shim, Soyeon, Joyce Serido, Leslie Bosch, and Chuanyi Tang. “Financial Identity Processing Styles Among Young 

Adults.” The Journal of Consumer Affairs (Spring 2013): 128-152.

27 Lopez-Fernandini, Alejandra and Karen Murrell. “The Effectiveness of Youth Financial Education.” New America 

Foundation. http://www.newamerica.net/publications/policy/effectiveness_youth_financial_education_1 (accessed 

March 29, 2013).
27 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

become young adults.28 This opportunity to find this “teachable moment” as young people 

transition to adulthood is the key reason why state and education leaders should strongly 

consider adoption of a required stand-alone course in personal finance for high school students. 

Indeed, a 2009 study revealed that college students from states that require a financial 

education course had the highest reported financial knowledge and were more likely to display 

positive financial behaviors and dispositions.29

Although we need more research and data to inform specific program and curricula design, 

there is some evidence to suggest that teaching financial concepts early and consistently 

increases financial capability.

4.2 Introduce financial education concepts into 

standardized tests

Forty-five states, four U.S. territories, the District of Columbia, and the Department of Defense 

Educational Activity have all adopted the Common Core State Standards.30 There is a unique 

opportunity for this group of states and jurisdictions to incorporate financial education

questions in standardized assessments. The benefit of doing so is that schools and teachers will

have added incentives to teach to topics queried in those assessments. In addition, this presents 

an opportunity to systematically measure and track the performance of students on financial 

education content. 

 

28 Shim, Soyeon, and Joyce Serido. “Young Adults’ Financial Capability.” APLUS, Wave 2.

http://www.cgsnet.org/ckfinder/userfiles/files/APLUSWave2_Final.pdf (September 2011) (accessed April 4, 2013): 

16.

29 Gutter, Michael. “Financial Management Practices of College Students from States with Varying Financial 

Education Mandates.” National Endowment for Financial Education.

http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/Gutter_FinMgtPracticesofCollegeStudents

_Final.pdf (2009) (accessed April 8, 2013).

30 In the States. Common Core State Standards Initiative. http://www.corestandards.org/in-the-states (accessed 

April 12, 2013).
28 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

Since financial education is not part of the Common Core State Standards, it will likely not 

figure prominently in curricula the states adopt. This raises the possibility that financial 

education concepts might not be included in standardized assessments unless they are 

incorporated into an existing educational standard in Math or English Language Arts. In 2002,

the Treasury Department suggested that states explicitly develop policy principles that affirm a 

state’s commitment to teaching financial skills and require that financial education concepts get 

included in test questions. Under this approach, when a state issues a Request for Proposal to 

develop educational assessments, the companies bidding for those state contracts would have

strong incentives to incorporate financial education into the tests they propose and ultimately 

develop.

31

The CFPB urges states to explore opportunities to support the development of assessment 

questions related to financial skills. In states where the Common Core Standards have been 

adopted, state and education leaders should consider aligning financial skills based assessment

questions with the existing standards. If such assessment questions are developed for one state, 

it is likely that other states that work within the Common Core framework can use that states

work as a reference point in developing their own assessments for financial education.

What would a standardized assessment question about financial education concepts look like? 

In a 2010 Chronicle of Higher Education article, Professor Peter Tufano of Harvard University 

suggested that it would not require adding more content-based questions, but rather reframing 

the context of existing questions.

For example, in the critical-reading section of the SAT, test takers are given passages...

and asked what they mean. Those passages could be about credit cards, or insurance. 

In the math section, students solve word problems. Reframing some questions around 

key financial principles, such as interest compounding, would be straightforward. 

 

31 U.S. Department of the Treasury, Office of Financial Education (white paper). “Integrating Financial Education 

Into School Curricula: Giving America's Youth the Educational Foundation for Making Effective Financial Decisions 

Throughout Their Lives by Teaching Financial Concepts as Part of Math and Reading Curricula in Elementary, 

Middle, and High Schools.” http://www.eric.ed.gov/PDFS/ED471873.pdf (October 2002) (accessed April 8, 2013).
29 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

Testing services already have experience with this material, which is included in the 

GMAT, taken by M.B.A. applicants.32

The Doorways to Dreams Fund, a nonprofit organization founded by Professor Tufano provides 

an excellent example of a sample math question that could be incorporated into standardized 

exams required for college admission. (See Figure 1 on page 29).

FIGURE 2: SAMPLE STANDARDIZED EXAM QUESTIONS FOR MATH

Source: Prep for Change Overview, D2D Fund, http://www.d2dfund.org/prep_change_1

 

32 Tufano, Peter. “Commentary: Leveraging Admissions Tests to Increase Financial Savvy.” Chronicle of Higher 

Education. http://chronicle.com/article/Leveraging-Admissions-Tests-to/125177/ (October 31, 2010) (accessed April 

8, 2013).
30 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

4.3 Create innovative hands-on learning

opportunities

Experiential learning is the process whereby students “learn by doing” and by reflecting on the 

experience. Students may be more likely to retain financial knowledge when they apply the 

concepts they have learned in concrete situations.

33 Examples of hands-on learning 

opportunities for children and youth include interacting with financial products and services, 

either through simulations or through in-school bank and credit union branches; online gaming

to gain financial knowledge and practice financial decision-making skills; and entrepreneurship 

training.

Programs that incorporate access to financial services may increase the effectiveness of financial 

education curricula.34 Several leaders in the education field have developed hands-on financial 

education opportunities for youth. Many of these programs are based on the belief that financial 

education that is relevant to students and provides experiential learning opportunities may be 

more effective in motivating learning and improving retention.

Some promising examples of hands-on learning programs for K-12 students are Kindergarten 

To College (K2C) and Make Your Path (MY Path). A case study of the K2C program conducted 

by EARN showed that parents participating in the universal college savings program found 

flexible account features very appealing (82 percent), consider teachers and school principals to 

be the best messengers of the program (71 percent and 65 percent, respectively), and believe 

 

33 Collins, J. Michael et al. “Determining What Works: A Framework for Evaluating Financial Literacy Education in 

Elementary School.” Center for Financial Security.

http://moneyfitevaluation.files.wordpress.com/2012/06/determining-what-works-2012.pdf (accessed April 1, 2013): 

11.

34 Peng, Tzu-Chin Martina, Suzanne Bartholomae, Jonathan Fox, and Garrett Cravener. “The Impact of Personal 

Finance Delivered in High School and College Courses.” Journal of Family and Economic Issues, 28(2) (2007): 265-

284. 
31 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

that financial education in the classroom for students and community programs for parents is 

very appealing or somewhat appealing (52 percent and 36 percent, respectively).

35

An initial evaluation of the MY Path program was conducted by the Federal Reserve Bank of San 

Francisco. The research revealed that low-income youth participating in the MY Path program 

demonstrated in pre- and post-test assessments that they had significantly increased their 

knowledge of various financial topics after each peer-led financial education training session.

36

Participants also reported that they increased their frequency of positive financial behaviors as a 

result of the program (e.g., budgeting, tracking spending, distinguishing between needs and 

wants, etc.).37 Individuals also indicated that participating in peer-led financial education 

training increased the level of engagement in part because they were able to relate better to the 

youth trainers.38

Many of the innovative hands-on learning programs that have been developed are too new to 

suggest robust results at the moment. Yet the interim results discussed in this section suggest 

that these trials are having a positive impact on the financial knowledge and outlook of children 

and youth. Our knowledge of what can be successful in transferring personal financial 

management skills to young people will be enhanced by extensive exploration and evaluation of 

learning-by-doing opportunities.

 

35 Shipman Bevans, Jade. “Children’s Education Savings Accounts: A Case Study of San Francisco’s Kindergarten to 

College Program.” http://www.earn.org/static/uploads/files/K2C_Practitioners_Report_.pdf (March 2013) 

(accessed April 8, 2013).

36 Federal Reserve Bank of San Francisco. “Increasing Financial Capability Among Economically Vulnerable Youth: 

MY Path.” http://www.frbsf.org/publications/community/wpapers/2013/working_paper_2013_03_IncreasingFinancial-Capability-among-Economically-Vulnerable-Youth-MY-Path.html (March 2013) (accessed April 8, 2013): 

10.

37 Federal Reserve Bank of San Francisco. “Increasing Financial Capability Among Economically Vulnerable Youth: 

MY Path.” http://www.frbsf.org/publications/community/wpapers/2013/working_paper_2013_03_IncreasingFinancial-Capability-among-Economically-Vulnerable-Youth-MY-Path.html (March 2013) (accessed April 8, 2013): 

11.

38 Federal Reserve Bank of San Francisco. “Increasing Financial Capability Among Economically Vulnerable Youth: 

MY Path.” http://www.frbsf.org/publications/community/wpapers/2013/working_paper_2013_03_IncreasingFinancial-Capability-among-Economically-Vulnerable-Youth-MY-Path.html (March 2013) (accessed April 8, 2013): 

13.
32 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

4.4 Create consistent opportunities and 

incentives for teacher training

Teachers are critical to the success of any programs or initiatives that rely on teaching financial 

education in classrooms. A growing body of research suggests that teachers generally support

financial education course requirements for students. A 2010 teacher survey funded by the 

National Endowment for Financial Education found that 89 percent of K-12 teachers agree that 

students should either take a financial education course or pass a competency test for high 

school graduation. In the same survey, only 20 percent of teachers, however, believe that they 

are adequately prepared to teach personal finance topics.39

Teachers confront continuing education obstacles that include having limited or uneven access 

to trainings and few incentives for participating in training programs that will help them become 

better educators of personal finance. Barriers to accessing teacher training are especially acute

for educators in geographically remote areas because they are forced into costly, long-distance

travel to attend training. Connecting teachers to existing resources, increasing access to training

by offering continuing-education units (CEUs), and providing need-based stipends for teachers 

who must travel to attend trainings could remove some initial barriers for educators.

There are many demands on teachers to get training in specific content areas, and they also have 

an array of training options that provide CEUs and compete with financial education training. 

One way to address this challenge is to develop a systematic approach to awarding CEUs to all 

teachers who avail themselves of ongoing financial education training programs. States and 

school districts should consider this policy recommendation to ensure consistent opportunities 

for teachers across the country. We can also think about how to integrate personal financial 

management training into college courses for those considering becoming teachers. If colleges 

and universities offer effective financial education courses, these courses could have special 

value for education students who will later become teachers.

 

39 Way, Wendy L. and Karen Holden. “Teachers’ Background & Capacity to Teach Personal Finance: Results of a 

National Study.” National Endowment for Financial Education. 

http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/TNTSalon_ExecutiveSummary.pdf

(accessed March 29, 2013): 13.
33 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

If teachers have better access to high-quality training for teaching financial education –

combined with the incentive of CEUs – more American students are likely to receive and benefit 

from financial education lessons taught in K-12 classrooms.

4.5 Encourage parents to discuss 

money management topics at home

As common sense would suggest, parents influence children’s habits, attitudes, and even

financial capability. A longitudinal research study found that not only do parents exert the most 

influence over their children when it comes to developing positive financial attitudes and 

behaviors, but they are also 1.5 times more influential than ongoing financial education.

40

Similarly, research in the field of identity development and developmental psychology has found

that parents are very influential in shaping consumer skills and knowledge as well.

41 Evidence 

suggests that as youth enter adulthood, parents continue to influence children’s financial 

behaviors and skills. Working with parents to encourage and support money conversations at 

home is critical to putting young people on the path to exercising greater control over their 

personal finances.

This evidence suggests an enormous and exciting opportunity to engage parents and guardians 

in their children’s financial education. There are many ways we can accomplish such 

engagement, in ways that are similar to how parents become active in supporting their 

children’s extracurricular activities, academic projects, and general learning and skill 

acquisition.

While parents and family members are important transmitters of lessons about how a young 

person should approach personal financial management, many parents, like teachers, may lack 

knowledge and skills in this area. As the 2009 National Financial Capability Study indicates, 

 

40 Shim, Soyeon and Joyce Serido. “Young Adults’ Financial Capability.” APLUS, Wave 2. 

http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/APLUSWave2_Final.pdf (September 2011) 

(accessed April 8, 2013): 21.

41 Shim, Soyeon, Joyce Serido, Leslie Bosch, and Chuanyi Tang. “Financial Identity Processing Styles Among Young 

Adults.” The Journal of Consumer Affairs, (Spring 2013): 131-148.
34 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

many Americans possess a low level of financial literacy as measured by quiz-style questions 

designed to yield an independent, objective assessment of the respondent’s financial literacy.

42

Parents need educational tools and opportunities to support lessons on money management that 

their children may be learning in school.

 

42 FINRA Investor Education Foundation. “Financial Capability in the United States, 2009 Nation Financial 

Capability Study.” 

http://www.finrafoundation.org/web/groups/foundation/@foundation/documents/foundation/p120535.pdf

(accessed April 1, 2013): 18.
35 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

5. Conclusion

Financial capability is critical to the success and achievement of Americans. We know that at a

relatively early age, young people face challenging and life-changing financial decisions. Yet 

many Americans lack the personal financial management skills to be successful. This white

paper focuses on how we can address the absence of personal financial management skills by 

focusing on opportunities to engage young people during their K-12 years.

Across the country, policymakers, teachers, nonprofit leaders, and parents are pursuing a wide 

range of approaches for teaching financial education and capability. Notwithstanding these 

efforts, there is an exciting opportunity to develop a coordinated and consistent policy 

framework that can provide young people with the information, experience, and results they 

need to be informed and empowered managers of their money over their lifetimes.

The policy framework articulated in this white paper acknowledges the importance of starting 

early to support financial capability and continuing this emphasis throughout the K-12 school 

years. In addition, CFPB recommends that states strongly consider including a stand-alone 

personal financial management course as a graduation requirement for high school students. It 

also advocates that financial management questions be added to standardized assessments. The

policy framework includes an emphasis on financial education approaches that offers

opportunities for experiential learning so students are able to apply financial knowledge in 

concrete ways and build financial capability. A number of states, municipalities, and school 

districts have engaged in pilot initiatives that provide young people with hands-on experiences

that will yield important lessons for the field and will facilitate effective future efforts.

A number of states require financial education and some require financial education testing. The 

CFPB recommends that states consider removing teacher training barriers and award teachers 

CEUs for pursuing ongoing training to teach financial skills effectively. Finally, we propose that 

schools engage with parents to develop strategies for supporting the financial capability of

young people.
36 CFPB OFFICE OF FINANCIAL EDUCATION POLICY WHITE PAPER, APRIL 2013

In order to navigate the complex financial marketplace, consumers need to be able to discern

the risks as well as the opportunities associated with financial products, services, and decisions. 

Young people today and future generations should not have to repeat the financial mistakes

made by earlier generations.

Our financial education policy recommendations outlined in this white paper represent a 

comprehensive approach to addressing the complex and dynamic issue of promoting the 

financial education and capability of millions of young Americans. If implemented by state 

policy makers and education leaders, these recommendations have the potential to help

transform the financial lives of a generation of children and youth. These policy 

recommendations are self-reinforcing and could create a stronger policy fabric if they are 

pursued together rather than independently.