Financial Literacy and Education Commission 

Why and How: Background Report

Developing the 2011 National Strategy

November 2010 
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Executive Summary

Introduction 

The recent economic crisis has highlighted how essential it is that individuals and 

families have the information, education, and tools that they need to make good financial 

decisions in an increasingly complex U.S. and global financial system. Indeed, as we 

have learned, the financial difficulties of individuals and families can dramatically affect 

the financial health of local communities and regional markets. The crisis has also 

illustrated that the financial well-being of individuals and families is fundamental to 

national financial stability, and that a lack of financial literacy is one barrier that can 

lower standards of living and limit prosperity. 

This situation pointed to the need for a national strategy to align public and private 

organizations, particularly the Federal agencies comprising the Financial Literacy and 

Education Commission (FLEC), to work on common goals to improve the financial 

skills, knowledge and behavior of individuals. The National Strategy 2011 (“The 

Strategy”) was developed by FLEC’s National Strategy Working Group (NSWG). The 

Strategy sets direction for financial literacy and education research, practice, coordination 

and policy. 

In developing the Strategy, the NSWG undertook a comprehensive and inclusive 

approach. It conducted research and sought input from key stakeholders representing 

financial industry associations, private and non-profit organizations, consumer and 

advocacy groups, educational institutions, state and local government agencies, and the 

previous President’s Advisory Council on Financial Literacy. The NSWG also hosted a 

series of listening sessions to obtain experts’ views on the objectives of a national 

strategy, the role of the Federal government and other related issues. Releasing the 

Strategy for public comment was the final step in this inclusive approach. The NSWG 

will turn to its implementation in 2011, working to engage all of the FLEC member 

agencies, as well as the non-profit, private, and academic sectors in helping to achieve the 

Strategy's goals, which are to: 

1. Increase awareness of and access to effective financial education; 

2. Determine and integrate core financial competencies; 

3. Improve financial education infrastructure; and 

4. Identify, enhance, and share effective practices 

Development Process of the National Strategy for Financial Literacy 

In July 2009, the Treasury Department convened a meeting of the FLEC to review its 

approach to its purpose and role as outlined in Title V of the Fair and Accurate Credit 

Transactions Act of 2003. FLEC members set up a working group to craft a new national 

strategy. Over the following months, the NSWG undertook a comprehensive and 

inclusive process that included three phases: Review, Build and Deliver. More details 

about each phase are outlined below: 
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1. Review (August through early September 2009): In order to develop a research-based 

national strategy for financial literacy/capability, the NSWG summarized insights from 

the Taking Ownership of the Future: The National Strategy for Financial Literacy 2006 

(2006 National Strategy), strategies from other Federal agencies on other topics, financial 

literacy strategies from other countries, and the Government Accountability Office 

assessment of the 2006 National Strategy as part of the process to develop lessons 

learned and best practices. 

Reviewing other national strategies: The NSWG considered national strategies from 

selected other Federal government agencies for both content and approach that might be 

applicable to the Strategy. The NSWG also reviewed the previous financial literacy 

strategy, the 2006 National Strategy. In addition, the NSWG conducted an extensive 

search for national financial literacy strategies in other countries and reviewed all the 

strategies it was able to identify.1

The NSWG found that there were commonalities across countries in the reasons given for 

developing a national financial literacy strategy. As is the case in the United States, the 

other countries noted an increase in life expectancy, requiring more resources to support a 

greater number of years in retirement; a shift from defined-benefit pension plans to 

defined-contribution plans resulting in individuals assuming more responsibility and risk 

in making retirement decisions; an increase in the number and complexity of financial 

products and services available to consumers; and low levels of financial literacy, 

especially among populations underserved by the financial system. 

The NSWG also found that the financial literacy strategies from other countries 

emphasized the following features: 

o Forging partnerships; 

o Focusing on a limited number of goals that contain specific action steps; and 

o Reaching out to specific groups such as youth, workers, and minorities. 

In addition, the NSWG felt that the following elements of the strategies from other 

Federal agencies should be considered for inclusion in the new financial literacy strategy, 

because they reflected strategic areas identified in the 2006 National Strategy: 

o Encouraging research and sharing of ideas and information; and 

o Supporting policy development and implementation of financial literacy 

initiatives by local, private and government groups. 

 

1

 The NSWG discovered that few countries have developed a national financial literacy strategy. Further, 

the NSWG was restricted to reviewing those strategies available in English. The strategies reviewed for this 

document came from New Zealand, United Kingdom, South Africa, Ireland, Netherlands, and Australia. 

Brazil, Italy, and Malaysia are in the process of developing national financial literacy strategies. 
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Using Research in Strategy Development: The NSWG relied on the findings from the 

FLEC 2008 National Research Symposium on Financial Literacy and Education2

 (FLEC 

Research Symposium) to inform the Strategy. This symposium brought together 29 

experts from the fields of behavioral and consumer economics, financial risk assessment, 

and financial education evaluation to exchange facts and information on existing research 

findings, gaps in the literature, and questions for future analysis. Participants included 

academics from public and private universities, scholars and administrators from nonprofit organizations, and government officials.

These experts completed a comprehensive literature review prior to the symposium 

aligned with four topics -- behavior theory application, consumer economic socialization, 

financial education and program evaluation, and financial risk assessment. Through a 

facilitated process designed to elicit individual views, each participant dropped away the 

topic headings and named 10 overarching research priorities, each articulated through a 

research question. These questions informed development of all four goals of the 

Strategy. Following is an alignment of each Strategy goal with the selected and relevant 

research question. 

Goal 1: Increase awareness of and access to effective financial education. 

Research Questions -- Six of the selected research questions point to a better 

understanding of the target audience that, in turn, improves the ability of educators and 

policymakers to deliver the right message, motivation and context leading to positive 

financial behavior and success. The questions relate to socialization factors, including 

conflicting messages, and how those factors vary by gender, life stage, race, socioeconomic status, education and ethnicity. Other questions focus on internal factors such 

as financial risk tolerance and psychological characteristics of learners, and external 

pressures such as economic shocks. 

Goal 2: Determine and integrate core financial competencies. 

Research Question -- What are the core principles of personal finance that every 

consumer needs to know, and what evidence exists that current standards are effective in 

helping people reach their financial goals? 

Goal 3: Improve financial education infrastructure. 

Research Question -- What is the most effective mix of financial education, 

decision framing, and regulation to improve financial well-being? 

Goal 4: Identify, enhance and share effective practices.

Research Question -- What are reliable and valid measures of the success for financial 

education, and what measures should be used to document success for various financial 

topic areas and target audiences? 

The NSWG approached its task knowing the critical nature of aligning the National 

 

2

 For a summary of the symposium, see http://www.ustreas.gov/offices/domestic-finance/financialinstitution/fin-education/commission/ResearchSymposiumpaper12-8-08.pdf or see “Financial Literacy and 

Research Priorities” in the 2009(Vol 20, No 1) Journal of Financial Counseling and Planning. 
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Goals with existing research. The FLEC's work on setting national research priorities for 

financial literacy and education provided an exemplary foundation for this endeavor. 

2. Build (Mid-September through early December 2009): The NSWG, in conjunction 

with the Treasury Department, contacted 150 key stakeholders with knowledge and 

expertise in the field of financial literacy and education, and asked them to respond to 

the list of questions below to help guide the formulation of the Strategy. The 

stakeholders represented private industry, the non-profit sector, academia, and all 

levels of government—federal, state, and local. 

Of the 150 stakeholders, sixty-four responded and provided their opinions and viewpoints 

on six key questions. 

1. What should be the most critical objectives of the new national strategy? 

2. What should be the key measures of successfully reaching those objectives? 

3. What are the most important issues that financial education should be 

addressing today? 

4. What do you see as your organization’s role in executing a national strategy 

for financial education? 

5. How can the Federal government best help to coordinate and promote 

financial literacy/capability? 

6. What would you name the new national strategy? 

The stakeholders who responded to the survey were invited to participate in facilitated 

listening sessions where they were each asked to comment on a proposed vision, mission 

and goals for the Strategy. The individual comments from the listening sessions, along 

with a report of lessons learned and the summary of 64 stakeholder comments from the 

survey, were used in drafting the Strategy. 

One of the questions asked each respondent to identify the major goals of a national 

strategy on financial literacy. The responses to this question were grouped into four 

themes (specific examples are provided in parentheses): 

 Promote national awareness and visibility: A number of stakeholders wrote about 

the need to build national awareness of the importance of financial education 

(create a national financial literacy awareness campaign, make products easily 

accessible, and use innovative technologies to reach people).

 Improve financial literacy competencies of individuals: Some stakeholders 

indicated that it was necessary to address core competencies through education 

that provides knowledge and skills (develop tools and resources, provide funding 

for providers and counselors, and leverage key relationships among relevant 

stakeholders).

 Develop a model financial literacy curriculum and related resources: Many 

stakeholders stated that a major focus of the new national strategy should be 

setting standards and providing clear guidelines for course content and desired 

outcomes (develop a model curriculum focusing on day-to-day financial 
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challenges, training and resources for educators, and define clear financial 

literacy training goals and certification of providers).

 Implement qualitative and quantitative measures to help ensure resources and 

programs are effective over the long-term: Many stakeholders noted the need for 

standards for assessing the effectiveness of financial education efforts (establish 

measurable national strategy goals, search out best practitioners, formulate 

benchmarks for financial education program providers and determine what 

strategies work). 

The views expressed by these individual stakeholders reflect in many ways those of the 

larger financial education/literacy community. Academic researchers have written about 

the low levels of financial literacy and awareness. Many research studies have attempted 

to evaluate selected financial education programs, with these programs covering a range 

of different topics, target audiences, and delivery channels. Reviews of these evaluation 

studies conclude that more research is needed to develop effective assessment tools and 

procedures. 3

Refining the strategy: As mentioned above, the stakeholders who responded to the 

NSWG survey were invited to participate in person or over the telephone in one of three 

facilitated listening sessions that lasted approximately 90 minutes and were held on 

December 8, 9, and 10, 2009. The paper summarizing the stakeholder survey responses 

was provided, as background, to the participants at the listening sessions. The participants 

were asked to provide individual views on refining the vision, mission, and goals of the 

strategy. With respect to the goals of the Strategy, a number of participants identified the 

following as important: 

 Increasing awareness of financial education 

 Developing core competencies 

 Establishing standards for providers 

 Measuring the impact of programs 

These goals reflect the themes identified in the NSWG’s review of national financial 

literacy strategies in other countries, in the stakeholders’ responses to the NSWG survey, 

and in the report of the proceedings of the FLEC Research Symposium. 

Defining Results: As the multi-disciplinary profession of personal finance gains maturity, 

the need to quantify results related to financial success is paramount. A comprehensive 

literature review conducted in preparation for the FLEC Research Symposium called for 

consistency among researchers in defining and measuring program success. 

 

3

 For a summary of the academic literature on the low levels of financial literacy and awareness in the 

United States, see Annamaria Lusardi, Americans’ Financial Capability, report prepared for the Financial 

Crisis Inquiry Commission, February 26, 2010. (www.fcic.gov/hearings/pdfs/2010-0226-Lusardi.pdf) For a 

review of financial education program evaluations and an assessment of the effectiveness of these 

evaluations, see Angela C. Lyons, et al., “Are We Making the Grade? A National Overview of Financial 

Education and Program Evaluation”, The Journal of Consumer Affairs, Vol 40, No 2, 2006. 

(www.frbsf.org/community/research/assets/AreWeMakingtheGrade.pdf) 
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The opportunity, and responsibility, for clearly articulating results related to the Strategy 

falls on three categories of organizations: 1) the FLEC as a total entity, 2) the 20 federal 

FLEC agencies as separate entities, and 3) all organizations in the public, private, nonprofit and foundation sectors concerned with financial literacy, capability and access. 

 

The FLEC’s responsibility for results is at the intermediary, organization level, 

specifically to encourage a broad range of organizations to embrace the Strategy vision 

and mission, and implement one or more of the goals. The FLEC plans to provide 

guidelines to organizations, posting relevant plans on the FLEC website and monitoring 

activity related to the following measures: 

 

The number of organizations that develop an implementation plan, including program 

evaluation, based on one or more goals in the Strategy. 

 The number of organizations implementing plans. 

 The number of organizations conducting program evaluations. 

Individual FLEC agencies will be accountable for developing, implementing and 

evaluating plans based on one or more goals in the Strategy. A facilitated work session 

for FLEC agencies will allow FLEC representatives to discuss the contents of agencyspecific plans based on the National Strategy goals and their respective metrics, and 

develop a process for informing other organizations. Preliminary guidelines will be 

reported at the September 2010 public FLEC meeting. 

 

In addition to FLEC agencies, which will lead the effort, all other public, private, nonprofit and foundation organizations will be encouraged by FLEC to frame current and 

projected work against one or more of the Strategy goals. In an era of when the need 

for financial literacy is at an all-time high, limited resources dedicated to financial 

education and literacy must show financial success for all. Increases in knowledge, skills 

and behaviors will be aggregated into common outcome measures (e.g. increased savings, 

decreased debt, increased retirement planning). The ultimate result will be individuals 

and families who increase knowledge, take positive financial action, and realize a lifetime 

of financial success. 

 

3. Deliver (Mid-December 2009 through September 2010): Building upon all of these 

earlier activities, the NSWG created a draft national strategy, which was reviewed by 

FLEC member agencies and published it for public comment along with this 

document in the Federal Register on September 3, 2010. There were 69 unique 

responses to the Federal Register Notice, with 29 percent of responses coming from 

non-profits, 20 percent from private businesses, 18 percent from trade associations, 

15 percent from private citizens, and 12 percent from the public sector—mostly statelevel official commenters. Officials from three foreign nations also responded. 

Comments showed significant support for the National Strategy 2011’s vision, 

mission, goals, and objectives: 89 percent of the respondents agreed with the vision, 
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87 percent agreed with the mission, 81 percent agreed with the goals, and 94 percent 

agreed with the objectives. The NSWG carefully considered all the comments, and 

made revisions to the National Strategy 2011 to enhance its clarity and usefulness. 

The NSWG and FLEC then published and distributed the Strategy. The 

implementation phase will track progress by FLEC agencies and other organizations 

in building and implementing an action plan based on the Strategy. 

Conclusion

The NSWG reached out in a variety of ways to ensure that the development of the 

national strategy was informed by research and practice. The NSWG reviewed other 

strategies and surveyed financial education experts. At each stage in this process, the 

NSWG noted that certain themes were repeated, as this summary has highlighted. This 

consistency of themes led to the NSWG’s selection of goals for the Strategy. These goals 

are listed below: 

 Increase awareness of and access to effective financial education 

 Determine and integrate core financial competencies 

 Improve financial education infrastructure 

 Identify, enhance, and share effective practices