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Improving Financial Education and Literacy

The Challenge

As governments face increasing debt burdens and companies too face significant cost burdens, there is a clear movement towards individual responsibility for financial planning for retirement. This movement is happening at precisely the time that individuals themselves are feeling more insecure about the future in the face of declining job security and the increased reluctance of financial institutions to provide credit.

People face bewildering challenges in navigating the complex landscape of financial products and providers to reach the most efficient solutions for their retirement needs. Of course, there are intermediaries that could in principle help them, but in practice these intermediaries are more often than not riddled with conflicts of interest and high charges.

At the core of this issue is the need to increase individual capability to make financial decisions. As long as people have relatively low levels of financial education and literacy, they will be prey to problems with either high charges or inappropriate products.

But efforts to increase financial literacy have proven elusive. When financial education sessions are provided by industry, it is closely connected with the sales process, which is not well trusted by consumers. And when they are provided by government, subsequent application in the real world often proves difficult.

What are new solutions for improving financial education and financial literacy? How can social and other new media be used? What new approaches for regulation and supervision to improve performance should be adopted?

    Solutions

    Solution

    Make visualizations central to the...

     
    Make visualizations central to the acquisition of financial literacy.

    Make visualizations central to the acquisition of financial literacy.

    Polity, Academia, Business, Civil Society
    Solution

    Promote financial and entrepreneurship education...

     
    Promote financial and entrepreneurship education combined with business idea competitions and start-up funding for young people.

    Promote financial and entrepreneurship education combined with business idea competitions and start-up funding for young people.

    Polity, Academia, Business, Civil Society
    Solution

    Develop minimum standards for financial...

     
    Develop minimum standards for financial education covering savings, credit, investment, and financial fraud.

    Develop minimum standards for financial education covering savings, credit, investment, and financial fraud.

    Polity, Academia, Business, Civil Society
    Solution

    Adopt group counseling for social...

     
    Adopt group counseling for social networks to improve credit scores.

    Adopt group counseling for social networks to improve credit scores.

    Civil Society
    Solution

    Use educational games to impart...

     
    Use educational games to impart financial education and network effects to spread the knowledge.

    Use educational games to impart financial education and network effects to spread the knowledge.

    Polity, Academia, Business, Civil Society
    Solution

    Add a government-approved, simple plain...

     
    Add a government-approved, simple "plain vanilla product" for each product category.

    Add a government-approved, simple "plain vanilla product" for each product category.

    Polity, Business
    Solution

    Use smartphone technology to help...

     
    Use smartphone technology to help consumers make better choices at point of sale.

    Use smartphone technology to help consumers make better choices at point of sale.

    Polity, Business

    Proposals

    Proposal

    A Thousand Reasons to (Re)Build Financial Education

     
    In order to tackle the question of why ordinary people should be educated about finances, we could list a thousand reasons, but the first one is quite enough: Financial education is a cornerstone of a ...

    In order to tackle the question of why ordinary people should be educated about finances, we could list a thousand reasons, but the first one is quite enough: Financial education is a cornerstone of a balanced and productive life and therefore helps people to have a better life. Financial education enables people to know how to accumulate and invest resources wisely in order to consume with pleasure, be prepared for emergencies and guarantee their future. This means having discipline, making plans and knowing how to invest. We live in a world that is going through incredible transformations, and in which

    Polity, Academia, Business, Civil Society
    Proposal

    Reinventing Financial Literacy after the Global Financial Crisis

     
    The following solution proposals are an excerpt from the background paper “Financial Literacy: Viewpoint”. Need to refocus financial literacy programs after global financial crisis Future financia ...

    The following solution proposals are an excerpt from the background paper “Financial Literacy: Viewpoint”. Need to refocus financial literacy programs after global financial crisis Future financial literacy programs need to prepare participants for three broad realities of life after global financial crisis – government bonds can no longer be considered the safest investment option, healthcare costs will rise at a higher rate in the next decade and it will be accompanied by generally higher inflation (due to rise in fuel and food prices). Keeping these in mind, financial literacy programs need to focus on helping people do better risk management

    Polity, Academia, Business, Civil Society
    Proposal

    HOPE Business-In-A-Box

     
    Introducing HOPE Business-In-A-Box. What if we could reconnect the power of aspiration with the power of education in our children's lives? What if a child in elementary school could start a business ...

    Introducing HOPE Business-In-A-Box. What if we could reconnect the power of aspiration with the power of education in our children's lives? What if a child in elementary school could start a business for $50-100? A middle school student could do the same with up to $200, or up to $500 for a high school student? What if they could get a financial literacy course and a course in dignity, connected with a primer course in entrepreneurship? They could select from 25 businesses that can be started for $500 or less, pitch their idea for this business in front of a

    Polity, Academia, Business, Civil Society
    Proposal

    Credit and Money Management- 700 Credit Score Communities

     
    In today’s world, a person’s credit score largely determines their ability to access gainful employment, safe housing, affordable insurance premiums, banking opportunities, and other makings of fi ...

    In today’s world, a person’s credit score largely determines their ability to access gainful employment, safe housing, affordable insurance premiums, banking opportunities, and other makings of financial dignity. In line with our mission to build communities where every citizen has an opportunity to obtain their dreams, HOPE has developed the 700 CREDIT SCORE COMMUNITIES (700 CSC) program as an additional service to our Credit and Money Management program. The 700 CSC will allow participants to join a community of other like-minded individuals to participate in one-on-one and group credit counseling sessions to ultimately improve their credit score and realize their

    Civil Society
    Proposal

    Seeking for a minimum but universal standard for financial literacy

     
    The most complicated task we must address in the current financial meltdown is a gap between its global character and national efforts to combat it. Although the financial turmoil affects all over the ...

    The most complicated task we must address in the current financial meltdown is a gap between its global character and national efforts to combat it. Although the financial turmoil affects all over the world, each national government individually tries to overcome without sufficient international coordination. This apparent gap leads to incorrect behavior of individual vis-à-vis the financial meltdown. He normally understands such a global character of this issue, while he doesn’t know how to act based on appropriate knowledge of global macro. Instead of that, he remains to be a national citizen and blames his government for not taking sufficient

    Polity, Academia, Business, Civil Society
    Proposal

    Beyond Financial and Economic Literacy – The Case for Social Entrepreneurship Education

     
    One of the key reasons for declining trust in our economic and financial order is widespread ignorance of how society and the market economy work. Particularly young people know too little about the i ...

    One of the key reasons for declining trust in our economic and financial order is widespread ignorance of how society and the market economy work. Particularly young people know too little about the interactions between the economy and society, freedom and responsibility, companies and entrepreneurship, and about how these resources might be used to benefit the common good, rather than individual interests. As a result, they feel that they are at the mercy of the systems around them. It is certainly nothing new to point out that more should be done in our schools to promote financial and economic literacy.

    Polity, Academia, Business, Civil Society
    Proposal

    To minimize devastating financial mistakes, focus financial education at the point of sale.

     
    Much of the economic downturn that has affected the world’s industrialized nations has been blamed on poor financial decision-making by consumers who took on too much of the wrong sort of debt, fed ...

    Much of the economic downturn that has affected the world’s industrialized nations has been blamed on poor financial decision-making by consumers who took on too much of the wrong sort of debt, fed the growing real estate bubble and made numerous and costly financial “mistakes,” presumably as the result of low levels of financial literacy. Two primary solutions have been proposed to prevent these “mistakes” from reoccurring: financial regulation and financial education. While financial regulation, in the extreme form of a single, approved “plain vanilla” product for each financial need (e.g.: a fixed-rate 30 year home mortgage) or the somewhat

    Polity, Academia, Business, Civil Society

    Background Paper

    Background Paper

    Financial Literacy: Viewpoint

     
    Polity, Academia, Business, Civil Society

    Open Library