WASHINGTON (5/30/14)--Knowledge of personal finance isn't an automatic part of employment, especially for young people new to the workforce who often don't have an understanding of payroll deductions and tax withholding. With that in mind, the members of the Financial Literacy and Education Commission (FLEC) are taking extra steps to bring financial education to employees just starting their careers.
Speaking at a FLEC field hearing Thursday, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray addressed the importance of financial education in the workplace, especially for young people. Stressing that the economic system in the United States can only endure if education starts "at the bottom up," he said that the CFPB has been working with the Office of Personnel Management to create a financial education program for the federal government, and he encouraged FLEC members to do that same.
"Ultimately, we want to enable our young people to pursue decisions that will allow them to achieve their future financial goals," he said. "To that end, at the Consumer Bureau we are working on a project that specifically examines the issue of consumer financial well-being. We are evaluating just what financial well-being is exactly, what skills and behaviors help people achieve it, and how we can measure it."
Cordray recalled meeting with a representative from Southwire, an Atlanta-based company that partnered with the Federal Reserve Bank of Atlanta for a mentoring program designed bring financial professionals and educators in contact with employees, to give them a better sense of the big picture when it comes to personal finance.
Citing inspiration from Southwire and a number of other innovative approaches presented at the February FLEC meeting, the commission has founded an effort called the State Engagement Project.
"This project is designed to gather input from state policymakers on resources and information that will be helpful for states to consider when determining the best way to incorporate youth financial education into their programs," Cordray said. "We think this is an excellent opportunity for federal agencies to partner with state policymakers to expand access to K-12 financial education and help develop ways to offer hands-on financial learning."
Cordray stressed that the goals of the project cannot be achieved at the federal level, but with the participation of state and local institutions as well.
FLEC is comprised of the heads of the CFPB, the National Credit Union Administration, and 17 other federal agencies.