2,626 research outputs found

    Against Financial Literacy Education

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    The dominant model of regulation in the United States for consumer credit, insurance, and investment products is disclosure and unfettered choice. As these products have become increasingly complex, consumers’ inability to understand them has become increasingly apparent, and the consequences of this inability more dire. In response, policymakers have embraced financial literacy education as a necessary corollary to the disclosure model of regulation. This education is widely believed to turn consumers into “responsible” and “empowered” market players, motivated and competent to make financial decisions that increase their own welfare. The vision is of educated consumers handling their own credit, insurance, and retirement planning matters by confidently navigating the bountiful unrestricted marketplace. Although the vision is seductive, promising both a free market and increased consumer welfare, the predicate belief in the effectiveness of financial literacy education lacks empirical support. Moreover, the belief is implausible, given the velocity of change in the financial marketplace, the gulf between current consumer skills and those needed to understand today’s complex non-standardized financial products, the persistence of biases in financial decisionmaking, and the disparity between educators and financial services firms in resources with which to reach consumers. Harboring this belief may be innocent, but it is not harmless; the pursuit of financial literacy poses costs that almost certainly swamp any benefits. For some consumers, financial education appears to increase confidence without improving ability, leading to worse decisions. When consumers find themselves in dire financial straits, the regulation through education model blames them for their plight, shaming them and deflecting calls for effective market regulation. Consumers generally do not serve as their own doctors and lawyers and for reasons of efficient division of labor alone, generally should not serve as their own financial experts. The search for effective financial literacy education should be replaced by a search for policies more conducive to good consumer financial outcomes

    Against Financial Literacy Education

    Get PDF
    The dominant model of regulation in the United States for consumer credit, insurance, and investment products is disclosure and unfettered choice. As these products have become increasingly complex, consumers’ inability to understand them has become increasingly apparent, and the consequences of this inability more dire. In response, policymakers have embraced financial literacy education as a necessary corollary to the disclosure model of regulation. This education is widely believed to turn consumers into “responsible” and “empowered” market players, motivated and competent to make financial decisions that increase their own welfare. The vision is of educated consumers handling their own credit, insurance, and retirement planning matters by confidently navigating the bountiful unrestricted marketplace. Although the vision is seductive, promising both a free market and increased consumer welfare, the predicate belief in the effectiveness of financial literacy education lacks empirical support. Moreover, the belief is implausible, given the velocity of change in the financial marketplace, the gulf between current consumer skills and those needed to understand today’s complex non-standardized financial products, the persistence of biases in financial decisionmaking, and the disparity between educators and financial services firms in resources with which to reach consumers. Harboring this belief may be innocent, but it is not harmless; the pursuit of financial literacy poses costs that almost certainly swamp any benefits. For some consumers, financial education appears to increase confidence without improving ability, leading to worse decisions. When consumers find themselves in dire financial straits, the regulation through education model blames them for their plight, shaming them and deflecting calls for effective market regulation. Consumers generally do not serve as their own doctors and lawyers and for reasons of efficient division of labor alone, generally should not serve as their own financial experts. The search for effective financial literacy education should be replaced by a search for policies more conducive to good consumer financial outcomes

    Incorporating Financial Literacy into the Accounting Curriculum

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    Financial literacy education, or the lack thereof, has received much attention in recent years. Over the past two decades, we have witnessed the dot com bubble, corporate scandals that stirred the market, and a large recession. Because many individuals turn to accountants for financial advice, it is now more important than ever for professionals to possess a strong foundation in basic financial literacy to better serve their clients. While the responsibility of financial literacy education does not lie with one institution or one individual, multiple efforts have been put in place to provide financial literacy education to the public. The purpose of this paper is to describe how financial literacy education was successfully incorporated into the accounting classroom to provide tomorrow’s professionals with a strong foundation in financial literacy

    A Learning Game For Youth Financial Literacy Education In The Teen Grid Of Second Life Three-Dimensional Virtual Environment

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    Game-like three-dimensional (3D) virtual worlds have become popular venues for youth to explore and interact with friends. To bring vital financial literacy education to them in places they frequent, a multi-disciplinary team of computer scientists, educators, and financial experts developed a youth-oriented financial literacy education game in the Teen Grid of Second Life 3D online virtual world. This paper presents the design and development process of this financial literacy education game, its learning effectiveness in classrooms, and lessons learned from the process

    Financial Literacy, Education, and Advice

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    Evidence and Ideology in Assessing the Effectiveness of Financial Literacy Education

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    Financial literacy education has long been promoted as key to consumer financial well-being. It is widely embraced as an effective alternative to substantive legal regulation. Yet its effectiveness has never had more than negligible empirical support. This review (1) sets forth the model of financial literacy education subscribed to by policymakers today, (2) identifies pervasive and serious limitations in existing empirical research used by policymakers as evidence of the effectiveness of this education, and (3) recommends a number of alternative public policies suggested by the existing research. Researchers should be particularly cautious in the presentation of their findings, so that academic work will contribute to the public policy discussion empirical, rather than ideological, assessments of financial literacy education

    Evidence and Ideology in Assessing the Effectiveness of Financial Literacy Education

    Get PDF
    Financial literacy education has long been promoted as key to consumer financial well-being. It is widely embraced as an effective alternative to substantive legal regulation. Yet its effectiveness has never had more than negligible empirical support. This review (1) sets forth the model of financial literacy education subscribed to by policymakers today, (2) identifies pervasive and serious limitations in existing empirical research used by policymakers as evidence of the effectiveness of this education, and (3) recommends a number of alternative public policies suggested by the existing research. Researchers should be particularly cautious in the presentation of their findings, so that academic work will contribute to the public policy discussion empirical, rather than ideological, assessments of financial literacy education

    Financial literacy education in the United States: Exploring popular personal finance literature

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    As libraries work to define their roles within the global financial literacy education movement, it will serve them well to understand the popular literary component to this movement: the personal finance self-help genre. In this literature study, the author read 12 of the most popular books of this genre, as determined by simulations of likely Google searches, and conveys herein some of the beliefs and strategies these books may have imparted to library patrons. This study will benefit librarians by enhancing their understanding of the personal finance genre, conveying the genre’s interrelation to the current financial literacy movement, and even prompting librarians to question their own understanding regarding certain financial literacy components.Publisher does not allow open access until after publicatio

    Pengenalan Pendidikan Literasi Keuangan Bagi Anak Usia Dini Pada Kelas Binaan Jurusan Akuntansi Di Buper

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    This community service aims to introduce financial literacy programs for early childhood. Literacy education is important for early childhood so that they are accustomed to financial management well in the future. In Indonesia financial literacy education is still something that is very rarely done, both in the family and school circles, the provision of education about financial literacy has not been done seriously and planned. Service is expected to benefit the knowledge of simple financial management for early childhood through the "saving" pattern. Dedication material is focused on how to introduce the concept of money, utilization and when to do shopping. Financial literacy education will be conducted for pre-school and elementary school children aged 5 - 12 years from study group students and playing in Waena Bupers formed by students majoring in accounting. The teaching method is carried out by the mentoring method by the Teaching Team. The teaching method uses simulation and learning using financial literacy education film media as well as the movements and songs of Ayo Menabung. The simulation of saving is done by practicing saving using piggy banks that are distributed to students. Assistance from the teaching team is carried out continuously with the introduction of financial literacy education that can benefit early childhood and will benefit themselves, their families and society in the future

    The Factors Influencing Interest, Processing, and Application of Financial Literacy Education as Perceived by Students in an Urban College Setting

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    The importance of financial literacy has been acknowledged and well received. However, measures to evaluate the effectiveness of financial literacy education have focused on program outcomes rather than participant interest to receive and process the information. The purpose of this transformative, phenomenological qualitative research study was to identify and examine the factors influencing the interest, processing, and application of financial literacy education programs as perceived by students in an urban, college setting. Using a theoretical framework based on the Kirkpatrick model for evaluating effectiveness of training programs and the Sen financial capability model, the study enabled the marginalized voices and viewpoints of 10 urban college students to be heard. Data revealed that financial literacy education is a valued, learning process that should be promoted and sustained throughout an individual’s lifetime. The results of this study suggest that financial literacy curriculum needs to be customized to include topics perceived to be interesting and personally relevant to students. This research also found that the perceived capabilities acquired through subject-matter knowledge and access to viable resources influenced financial self-efficacy and subsequent application of learned behaviors. Recommendations to stakeholders include mandating academic accountability for college financial literacy education courses and delivery of the education on diverse platforms. In addition, future research should be conducted to examine gender disparities between female and male financial literacy interest levels
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