U.S. National Strategy for
Financial Literacy
2020
U.S. Financial Literacy and Education Commission
U.S. Financial Literacy and Education Commission
2020
Members of the Financial Literacy and Education Commission
Department of the Treasury (Treasury), Chair
Consumer Financial Protection Bureau (CFPB), Vice Chair
Department of Agriculture (USDA)
Department of Education (ED)
Department of Defense (DoD)
Department of Health and Human Services (HHS)
Department of Housing and Urban Development (HUD)
Department of the Interior (DOI)
Department of Labor (DOL)
Department of Veterans Aairs (VA)
Board of Governors of the Federal Reserve System (FRB)
Commodity Futures Trading Commission (CFTC)
Federal Deposit Insurance Corporation (FDIC)
Federal Emergency Management Agency (FEMA)
Federal Trade Commission (FTC)
General Services Administration (GSA)
National Credit Union Administration (NCUA)
Oce of the Comptroller of the Currency (OCC)
Oce of Personnel Management (OPM)
Securities and Exchange Commission (SEC)
Small Business Administration (SBA)
Social Security Administration (SSA)
White House Domestic Policy Council (DPC)
U.S. National Strategy for
Financial Literacy
2020
U.S. Financial Literacy and Education Commission
2020
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Table of Contents
1. Introduction 2
Dening Financial Literacy and Education 2
Role of Financial Education to Help Americans Manage Financial Aspects of COVID-19 3
National Strategy for Financial Literacy Summary 4
2. Methods to Increase Financial Literacy and Education 7
Best Practices 7
Building Blocks for Youth Financial Capability 8
Future Steps to Improve Financial Education 8
3. Review of Federal Activities Designed to Promote Financial Literacy
and Education and Develop a Plan to Improve Coordination
and Eliminate Overlap and Duplication 10
Structure and Function of the FLEC 11
Priority Areas of Federal Activity 12
Performance and Outcome Measures 14
Accountability and Reporting 14
Allocation of Federal Resources 14
Outreach and Communications Agenda 15
Research and Learning Agenda 15
Other Considerations in Implementing the National Strategy 16
Participation by state and local governments, private, nonprot, and
public institutions in the National Strategy
Role of technology
4. Conclusion 17
Appendix 1. National Strategy Process and Consultations 18
Appendix 2. Best Practices for Delivery of Financial Literacy and Education 19
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1. Introduction
Financial education is key to unlocking the foundations of economic opportunity
and powering a strong and resilient economy. Americans must acquire nancial
skills and knowledge to fully participate in our dynamic economy.
Financial education is key to unlocking the foun-
dations of economic opportunity and powering
a strong and resilient economy. Americans must
acquire nancial skills and knowledge to fully par-
ticipate in our dynamic economy. In a 2018 study,
only one-third of adults could answer at least four
of ve nancial literacy questions on fundamen-
tal concepts such as mortgages, interest rates,
ination and risk.
1
Similarly, a 2018 assessment
of 15-year-old students found that 16 percent
were below a procient level of nancial literacy,
22 percent demonstrated a basic level of nan-
cial literacy, while 12 percent successfully demon-
strated the highest level of nancial skills assessed.
2
Additional performance gaps persist in nancial
literacy between minority populations and the U.S.
population as a whole.
For example, the same studies found that African-
American and Hispanic adults answered fewer
nancial literacy questions correctly than did
White and Asian respondents.
3
White and Asian
1. Lin, Judy T, Christopher Bumcrot, Tippy Ulicny, et al., e State of U.S. Financial Capability: e 2018 National Financial Capability Study, FINRA
Investor Education Foundation, June 2019, available at: https://www.usnancialcapability.org/downloads/NFCS_2018_Report_Natl_Findings.pdf.
2. Organisation for Economic Co-operation and Development (OECD), PISA 2018 Results (Volume IV): Are Students Smart about Money?
Programme for International Student Assessment, OECD Publishing, 2020, available at: http://www.oecd.org/pisa/publications/pisa-2018-
results-volume-iv-48ebd1ba-en.htm.
3. Terms on race and ethnicity are those used in the cited reports. White and Asian adults answered on average 3.2 out of 6 questions correctly,
compared to 2.6 and 2.3 for Hispanic and African-American adults respectively. Lin, Judy T, Christopher Bumcrot, Tippy Ulicny, et al., e
State of U.S. Financial Capability: e 2018 National Financial Capability Study, FINRA Investor Education Foundation, June 2019, available at:
https://www.usnancialcapability.org/downloads/NFCS_2018_Report_Natl_Findings.pdf.
4. Terms on race and ethnicity are those used in the cited reports. Average scores were 554 for Asian students, 532 for White students, 475 for
Hispanic students and 446 for Black students. e overall average was 506. U.S. Department of Education. Institute of Education Sciences,
National Center for Education Statistics, Highlights of U.S. PISA 2018 Results Web Report (NCES 2020-166 and 2020-072), 2020, available at
https://nces.ed.gov/surveys/pisa/pisa2018/index.asp.
5. U.S. Department of the Treasury, Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Eorts, July 2019, (hereafter,
FFLR), available at: https://home.treasury.gov/system/les/136/FFLRCoordinatingImprovingFinancialLiteracyEorts.pdf.
6. Consumer Financial Protection Bureau, Financial well-being: e goal of nancial education, January 2015, available at: https://les.
consumernance.gov/f/201501_cfpb_report_nancial-well-being.pdf.
15-year-olds, on average, had substantially higher
nancial literacy scores than the overall U.S. aver-
age of students in this cohort while Hispanic and
African-American/Black students had substan-
tially lower than average scores.
4
Dening Financial Literacy and Education
Financial literacy describes the skills, knowledge
and tools that equip people to make individual
nancial decisions and actions to attain their goals;
this may also be known as nancial capability,
especially when paired with access to nancial
products and services.
Financial education is the process by which people
gain information, skills, condence and motivation
to act, through various means, including classroom
education, one-on-one counseling and coaching,
technology-based interventions, and self–study
5.
A key desired outcome for nancial education is
sustained nancial well-being, in which people can
fully meet current and ongoing nancial obligations,
can feel secure in their nancial future, and are able to
make choices that allow enjoyment of life.
6
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To address these disparities in nancial literacy, both the private and public sectors oer additional
support for minority populations to develop knowledge, skills, and condence to make more informed
nancial decisions. ese oerings help people attain their goals and nancial well-being in what is an
increasingly complex environment that contains competing sources of information and inuence.
7. P.L. 116-136.
Role of Financial Education to Help Americans Manage Financial
Aspects of COVID-19
Millions of Americans have been adversely impacted by the COVID-19 pandemic and face signicant
nancial uncertainties as a result. On March 27, 2020, Congress passed, and President Trump signed into
law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act
7
— the largest economic relief
package for workers and businesses in American history. Financial Literacy and Education Commission
(FLEC) member agencies are implementing programs authorized by the CARES Act and taking additional
steps to help Americans through this dicult time. A clear and coordinated strategy for nancial education
supports and enhances the many critical federal eorts that are providing economic relief. FLEC agencies
are empowering Americans to access and understand the variety of new nancial resources available to them
in order to determine the best actions to advance their nancial well-being. e FLEC helps coordinate
clear and targeted messaging to consumers and ensures that much-needed relief, resources, and benets are
made available in ecient ways to the people who need them most. When we emerge from this crisis, the
coordination of eorts across agencies and between the public and private sectors will help Americans achieve
greater nancial recovery and resilience.
e federal government helps Americans prepare for, respond to, and recover from unexpected events such as
the COVID-19 national emergency. e FLEC – as the federal government’s primary coordinating body on
nancial literacy and education – is leading coordination among federal member agencies in providing infor-
mation and guidance for consumers on timely nancial topics.
is National Strategy 2020 supports and enhances critical eorts during this national emergency and on the
path to recovery. FLEC member agencies are working together to ensure clear information and guidance is
available for all Americans, in collaboration with state, tribal, and local governments, the private sector, local
service providers and community organizations. Information on nancial topics that are critical in this uncer-
tain time is especially valuable for the most nancially fragile Americans, including:
• accessing Economic Impact Payments and Unemployment Insurance benets;
• covering the costs of basic needs such as food, health care, housing, and utilities, in the face of diminished
income and/or new expenses;
• managing nances in the event of job loss or change, and identifying new opportunities;
• understanding mortgage and housing assistance provisions;
• making sound choices about health insurance;
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• understanding the availability, applicability, and coverage of federal, state, and employer provided family
and medical leave and other workplace protections;
• eectively managing debt during a hardship, including mortgages, credit cards, car loans, and student loans;
• sustaining or successfully changing the operation of a small business, farm, or other enterprise;
• starting or maintaining, if possible, insured bank or credit union accounts, such as savings accounts;
• planning for the future and weathering volatility in long-term savings and investments,
such as retirement savings;
• avoiding frauds and scams, and reporting them when they occur; and
• eectively making charitable contributions.
8. 20 U.S.C. § 9702.
9. 20 U.S.C. § 9702(b).
10. 20 U.S.C. § 9702(b).
11. Prior national strategies: FLEC, Taking Ownership of the Future: e National Strategy for Financial Literacy, 2006, available at: https://www.treasury.
gov/about/organizational-structure/oces/Domestic-Finance/Documents/Strategyeng.pdf and FLEC, Promoting Financial Success in the United
States: National Strategy for Financial Literacy, 2011, available at: https://www.treasury.gov/resource-center/nancial-education/Documents/
NationalStrategyBook_12310%20(2).pdf.
12. FFLR.
National Strategy for Financial Literacy Summary
e FLEC was created by statute in 2003 “to improve the nancial literacy and education of persons in
the United States.”
8
e FLEC is comprised of 23 federal government entities reecting a wide array of
functions, and is chaired by the Secretary of the Treasury with the Director of the Consumer Financial
Protection Bureau serving as Vice-Chair. e FLEC was charged with creating, implementing, and regularly
reviewing and updating a National Strategy to promote basic nancial literacy and education among all
American consumers.
9
Consistent with this requirement, this U.S. National Strategy for Financial Literacy
2020 (“National Strategy 2020” or “National Strategy”) promotes the nancial literacy of Americans in two
ways. First, it identies methods to improve and increase the nancial literacy and education of Americans.
10
Second, it articulates the federal government’s roles, priorities, and structures for promoting nancial
education. is National Strategy 2020 builds on previous National Strategy iterations,
11
and draws on a
review of federal nancial education activities and opportunities for streamlining federal nancial education
activities completed by the U.S. Department of the Treasury in its 2019 report, Federal Financial Literacy
Reform: Coordinating and Improving Financial Literacy Eorts.
12
e National Strategy 2020 seeks to improve nancial literacy and education among Americans by
providing evidence-based best practices to the nancial education eld (see Appendix 2). Use of these
best practices can help improve the delivery of nancial education on dierent topics, especially to
diverse populations, including historically underserved groups. ese best practices are adaptable and
applicable to changing economic contexts and can inform both policy-making and the development of
new nancial education activities. To build youth nancial capability, the National Strategy identies the
importance of building young people’s executive functions, nancial habits, and nancial knowledge and
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decision-making skills. e National Strategy also identies ways that nancial educators can measure
the impact of their work through assessing nancial well-being or other measures of nancial health.
e National Strategy 2020 identies the primary role for the federal government in the nancial education
eld. rough policy development, research coordination, and focused program and resource development,
the federal government will support, inform, and improve the broader nancial education eld in its work
to equip Americans with the skills, knowledge, and tools to make decisions that enhance their nancial
well-being. Clarifying the federal government’s role in supporting nancial education eorts is essential to
ensuring a strong response and recovery in the face of economic setbacks. By improving nancial literacy
and education, the federal government can play an important role in facilitating a vibrant and ecient
marketplace that empowers individuals to make informed nancial choices. Financial education can also help
mitigate the negative externalities from, and impacts on, a less nancially literate population. For example,
people with limited nancial literacy can be among the most dramatically aected by economic downturns
and may be more easily inuenced by fraudulent messaging or scams that thwart their nancial well-being.
e federal government is not solely responsible for nancial capability. State, tribal, and local governments,
nonprot organizations, and the private sector also have an important role in supporting the nancial
decision-making of the people they serve. ese entities often respond to consumer needs more quickly and
are able develop customized and targeted strategies to eciently deliver nancial education and support.
Many stakeholders have expressed the view that the federal government should play a leadership and
guiding role in nancial education. By embracing this role, the federal government can improve the quality
and reach of nancial education activities by promoting evidence-based best practices, creating specic
resources where appropriate, and deploying policy solutions to support the country’s nancial education
infrastructure. A study found that for every dollar put towards nancial education, about $25 is spent on
nancial marketing,
13
making it dicult for consumers to nd objective information, which could be provided
by federal agencies. us, the federal government can be a partner, a source of trusted information and tools,
and a leader to the many nancial education providers striving to improve nancial literacy and capability.
With enhanced coordination, the FLEC can eectively mobilize expertise and resources to provide
assistance when and where it is most needed. e National Strategy 2020 describes a new structure to
better organize the FLEC. It also identies planned actions in priority areas of basic nancial capability,
including access to nancial services (such as savings and credit products), housing, retirement savings
and investor education, postsecondary education, and the unique issues facing military communities.
13. Consumer Financial Protection Bureau, Navigating the Market: A Comparison of spending on nancial education and nancial marketing. 2013,
available at: https://les.consumernance.gov/f/201311_cfpb_navigating-the-market-nal.pdf,
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By implementing this National Strategy, the FLEC will reduce fragmentation, duplication, and overlap by
improving coordination, providing greater accountability for performance and outcomes, and recommend-
ing the use of resources consistent with need and impact. e National Strategy further emphasizes that the
FLEC will take steps to coordinate with other participants in the nancial education eld. is coordina-
tion will enable the FLEC to better respond to needs as they arise, while also maintaining focus on important
ongoing nancial education priorities.
A clear strategy for nancial education will support preparedness, resiliency, stability, and recovery in uncer-
tain times. It can also enable more robust economic participation by all Americans in a strong and expanding
economy, especially focusing on those outside the nancial mainstream. e best practices identied in this
National Strategy are intended to guide practitioners working in a wide variety of economic environments.
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2. Methods to Increase Financial Literacy and Education
e best practices outlined below provide methods to promote nancial literacy and education among
American consumers. Use of these best practices by educators, service providers, and others interested in
nancial education can increase the nancial skills of current and future consumers and enhance their general
understanding of nancial services and products. ese best practices enable nancial education to be designed
“not simply to improve knowledge, but rather to improve consumers’ nancial choices and outcomes.”
14
e
best practices are intended to guide nancial education across a wide variety of contexts, including in dierent
economic conditions by providing guidance on how to help people build skills, condence, and competencies,
so that they are better prepared to evaluate nancial choices. e FLEC will be guided by these best practices
as it implements strategies to address the COVID-19 outbreak and its aftermath, and to contribute to the
successful rebound of the nation’s economy.
14. 20 U.S.C. § 9703(a)(2)( J).
15. Consumer Financial Protection Bureau, Eective nancial education: Five principles and how to use them, June 2017, available at:
https://les.consumernance.gov/f/documents/201706_cfpb_ve-principles-nancial-well-being.pdf; FFLR, 54-58.
Best Practices
Based on an extensive review of academic research, consultations with experts, and discussions with members
of the FLEC, a number of themes regarding eective nancial literacy and education have crystalized. e
best practices are crosscutting, rather than subject-specic, and thus can be used to inform nancial education
policy and practice whether at home, in a community program, or when setting state or national policy
15
(the full best practices are in Appendix 2).
• Know the Individuals and Families to be Served. Financial education, information, and delivery methods
must be tailored to individual circumstances and needs.
• Provide Actionable, Relevant, and Timely Information. Financial information that is delivered in an
actionable, relevant, and timely manner results in a greater likelihood of retention and positive action.
• Improve Key Financial Skills. Financial literacy and education can be more eective when it helps develop
skills, rather than merely transmit knowledge of particular facts about nancial products and services.
• Build on Motivation. Eective nancial literacy and education programs capitalize on people’s motivations.
• Make It Easy to Make Good Decisions and Follow rough. e environment or context can make it easier for
people to carry out the steps required for a better outcome. As an example, changing options presented and
making it easier to obtain helpful information and advice can help people bridge the gap between intention
and action.
• Raise Standards for Financial Educators. Financial education providers should demonstrate mastery of
nancial content and eective delivery skills and methods.
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• Provide Ongoing Support. Financial education should provide ongoing support, such as one-on-one
nancial counseling.
• Evaluate for Impact. Financial education providers should evaluate their programs for impact and develop
a culture of continuous improvement by establishing methodologies, procedures, reporting, and metrics for
measuring program eectiveness.
16. Consumer Financial Protection Bureau, Building blocks to help youth achieve nancial capability: A new model and recommendations, September 2016,
available at: https://les.consumernance.gov/f/documents/092016_cfpb_BuildingBlocksReport_ModelAndRecommendations_web.pdf.
Building Blocks for Youth Financial Capability
Building the nancial decision-making knowledge and skills of young people helps them to make informed
nancial choices throughout their lives. A developmentally informed model can help shape appropriate
nancial education for young people in a variety of settings: familial, academic, and community-based. ese
nancial capability “building blocks” focus on building, over time, young people’s executive functions (such as
self-control and perseverance), nancial habits and norms (such as the value of planning ahead), and nancial
knowledge and decision-making skills (such as nding and using trusted sources of information), starting in
early childhood through adulthood.
16
Future Steps to Improve Financial Education
Several actions would greatly improve the nancial education eld. ese are actions that the FLEC, working
with other stakeholders, will consider implementing in the years ahead.
Raise standards for nancial educators. Clearer guidelines or voluntary standards for nancial educators could
improve quality and make nancial education a more rigorous evidence-based endeavor. Costs and challenges
in developing such standards must be considered. However, the progress made in nancial education practice
and research over the last 15 years may provide a way to signicantly improve the quality and delivery of
nancial education across the eld.
Promote availability and use of one-on-one nancial education. Many in the nancial education eld recognize
the value of one-on-one nancial education and are seeking to expand its availability by leveraging existing
channels and identifying lower-cost means, such as by providing on-line housing counseling and peer
educators at higher education institutions. ere is an opportunity to provide nancial education resources
and partner with the private sector to expand nancial counseling oerings within existing federal channels
that reach consumers, such as Small Business Development Centers and IRS Taxpayer Assistance Centers.
Some FLEC member agencies are exploring increased collaboration with the private sector and state, tribal,
and local governments to increase the availability and ecacy of one-on-one nancial education, especially at
critical decision points and for populations for whom the need is greatest.
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Measure outcomes. It is necessary to improve the consistency of measurement, assessment, and accountability
in nancial education programs. e diversity of program goals, providers, and participants poses a challenge
to consistently measuring impact. However, for the nancial education eld to improve, it must move
toward rigor in assessment and respond to ndings about what works and what does not. e FLEC will
seek to collaborate with the private sector, nancial education funders, and other stakeholders to establish
methodologies, procedures, reporting and metrics for measuring program eectiveness.
In developing consistent measures, nancial education, providers and policy makers should consider how to use
measures that may demonstrate an individual’s ability to balance multiple nancial decisions. e Consumer
Financial Protection Bureau’s (CFPB) nancial well-being scale is a validated, subjective tool to measure a per-
son’s “state of being wherein a person can fully meet current and ongoing nancial obligations, can feel secure
in their nancial future and is able to make choices that allow them to enjoy life.”
17
17. Consumer Financial Protection Bureau, Financial well-being: What it means and how to help, available at: https://les.consumernance.
gov/f/201501_ cfpb_digest_nancial-well-being.pdf.
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3. Review of Federal Activities Designed to Promote Financial
Literacy and Education and Develop a Plan to Improve
Coordination and Eliminate Overlap and Duplication
18. Per 20 U.S. 9703(h).
19. FFLR.
is section of the National Strategy 2020 focuses on the role of the federal government in nancial education.
It is based on a review of federal nancial education activities and provides a plan to improve coordination of
such activities. is plan includes implementing a new structure for the FLEC to more eectively take action
and use federal resources. e FLEC will use this National Strategy to guide its actions and will report on its
success in implementing this plan in the years ahead.
18
Review of Federal Activities
Treasury’s 2019 report Federal Financial Literacy Reform included an assessment and review of federal nan-
cial literacy and education activities. is review helped identify the primary role for the federal government
in nancial education—to support, inform and improve the broader nancial education eld in its work to
equip Americans with the skills, knowledge, and tools to make informed nancial decisions and improve their
nancial well-being. e FLEC agencies will do this through policy development, research coordination, and
focused program and resource development. e report identies priority areas of focus for federal activities,
and proposes a plan to address overlap, fragmentation, and possible duplication through improved coordination
and a structure for the FLEC.
19
is National Strategy documents the FLEC’s plan to leverage its member agencies, and other entities to
help address past limitations in nancial education. e National Strategy relies on existing statutory author-
ities and responsibilities, including those granted to the FLEC, member agencies, and their representatives.
Congress may consider addressing overlap in federal nancial education activities identied in Treasury’s
report. In addition, FLEC members may make recommendations for the allocation of nancial education
resources in future budget requests to Congress.
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Structure and Function of the FLEC
e FLEC is implementing a structure that will enable it to better coordinate activities to avoid
fragmentation, overlap and duplication, measure performance and outcomes, and identify nancial education
resources consistent with Americans’ needs. is structure seeks to fulll the FLEC’s purpose to coordinate
these activities within its current authorities and resources.
20
It is also intended to support deploying best
practices and promoting accountability, while implementing activities appropriate for the federal government
and consistent with its primary role.
20. Financial Literacy and Education Improvement Act of 2003 and 124 Stat. 1376-2223 (2010), codied at 20 U.S.C. § 9702.
21. 20 U.S.C. § 9703(e).
The FLEC bylaws establish the following structure:
• An Executive Committee (EC) chaired by the Secretary of the Treasury (Chair of the FLEC), composed
of the Director of the Consumer Financial Protection Bureau (CFPB, Vice Chair of the FLEC) and
the heads of member agencies that have major responsibilities in each of the FLEC’s priority areas:
Department of Defense (DoD), Department of Education (ED), Department of Housing and Urban
Development (HUD), and Department of Labor (DOL). e EC consults with other FLEC members,
provides advice and guidance, and coordinates activities among Working Groups.
• Five Working Groups (WGs), each led by a member of the EC, other than the Chair, as follows: Basic
Financial Capability (CFPB); Military (DoD); Postsecondary Education (ED); Housing Counseling
(HUD); and Retirement Savings and Investor Education (DOL). ese working groups closely coordinate
activities among member agencies including policies, programs, tools, events, and information, and to
identify areas for collaboration, coordination, and streamlining.
• Coordination also includes outreach and communications, a research and learning agenda, and performance
and outcome measures (as described further, below).
• Use of resources, such as interagency agreements, shared service agreements, and detailing of federal
employees, to promote interagency coordination, provide support for the FLEC or Working Groups, or to
facilitate other nancial literacy activities and programs related to the FLEC consistent with the FLEC
statute, member agency legal authorities, and applicable law.
• roughout these tasks, the FLEC will promote partnerships among federal, state, tribal, and local
governments, nonprot organizations, and private enterprises.
21
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Priority Areas of Federal Activity
rough the Working Groups the FLEC will coordinate programs, policies, outreach, and other activities
in key areas of consumer nancial decision-making. By focusing on these areas the FLEC will improve
eciency and outcomes by reducing overlapping activities and sharing expertise. e FLEC will review and
develop plans to implement this National Strategy 2020 consistent with the priority areas, and as appropriate,
develop dynamic responses to new needs and opportunities. e FLEC has identied an agency to lead the
coordination of activities and promote accountability for outcomes in each of these areas.
FLEC agencies are assessing the many complex and evolving nancial needs related to the COVID-19 out-
break and beyond. e FLEC supports a “whole-of-government approach” in providing the right tools and
resources for Americans to sustain and improve their nancial well-being. e FLEC is focused on ensuring
that Americans can access the economic relief they are entitled to, are supported in managing their necessary
expenses and debts, understand their rights and protections, avoid frauds and scams, and prepare and save for
the future. ese activities will help consumers address short-term nancial needs and help them on the path
to sustained recovery and resilience.
As appropriate, the FLEC’s plans will seek to address disparities in nancial literacy among minority popula-
tions and other groups that have been historically underserved by mainstream nancial systems and promote
broader nancial inclusion in the economy.
Basic nancial capability (lead agency: CFPB). Addresses basic money management and nancial skills and
actions, including strategies for budgeting and savings, managing payment of bills and debts, understanding the
appropriate use of credit and how that aects credit scores, credit reports, and future nancing, and avoiding
fraud and scams. Additionally, nancial inclusion, the widespread access to and sound use of, safe, aordable,
and sustainable products and services, especially from insured depository institutions, including to tradition-
ally underserved consumers and communities, such as women and minorities, is a topic considered within basic
nancial capability. A key and timely focus area for this working group is nancial preparedness and recovery
via emergency savings and other steps that support nancial resilience and overall nancial well-being. is
working group also addresses basic youth nancial capability, which can be built through experiential learning
opportunities, such as using youth-friendly nancial products and services.
Saving for retirement and investor education (lead agency: DOL). Focuses on helping Americans plan, save, and
invest for retirement and for long-term needs and avoiding frauds and scams that can imperil their savings and
investments. is area also includes helping Americans, particularly women, who face a greater risk of pov-
erty in old age, understand Social Security benets, workplace retirement benets, and savings and investing
options, including managing in times of volatility.
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Housing counseling (lead agency: HUD). For most Americans, housing-related nancial decisions are
among the most consequential and complex nancial choices they will make. e FLEC will support con-
sumers to help them make sound decisions on home buying, managing housing expenses, avoiding foreclo-
sure, understanding their rights and obligations as renters, and other housing-related decisions through greater
accessibility and use of quality housing counseling. e FLEC will consider how to better leverage the private
sector in expanding the availability of housing counseling for homebuyers, homeowners, and renters.
Postsecondary education (lead agency: ED). In recent decades, more Americans have sought postsecondary edu-
cation as a pathway to higher income and greater nancial stability. e FLEC will focus on helping post-sec-
ondary students and their families avoid the pitfalls associated with nancing higher education by helping
them plan for and understand the costs and benets of higher education, increasing transparency about the
costs, and improving their understanding of options for paying for postsecondary education, including student
loans. e FLEC will also promote implementation of the recommendations in its 2019 report Best Practices
for Financial Literacy and Education at Institutions of Higher Education.
22
Military (lead agency: DoD). e FLEC recognizes the unique nancial situation of military servicemem-
bers, veterans, and their families. us, substantial federal resources are dedicated to military nancial edu-
cation, given the critical stakes placed on nancial readiness for the nation’s defense, the value of the nancial
security of military families and survivors, and of servicemembers returning to civilian life as veterans. In this
way, the FLEC supports national security so that nancial challenges do not distract servicemembers and the
Department of Defense from focusing on their readiness missions.
22. FLEC, Best Practices for Financial Literacy and Education at Institutions of Higher Education, 2019, available at: https://home.treasury.gov/system/
les/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf.
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Performance and Outcome Measures
23. FFLR, 15-16.
24. Consumer Financial Protection Bureau, Financial well-being: What it means and how to help, available at: https://les.consumernance.
gov/f/201501_ cfpb_digest_nancial-well-being.pdf.
25. also called the SAFE Strategy or SAFE report
26. 20 U.S.C. § 9703(h).
27. FFLR.
By adopting common performance measures, as appropriate, the FLEC will be able to better assess the eec-
tiveness of nancial education activities and make data-driven improvements in the future. e FLEC is work-
ing to identify outcome measures, including short-term performance metrics and intermediate-term indicators,
that demonstrate the impact of federal activities (directly or indirectly) on improvements to Americans’ nan-
cial status. As Treasury noted in its 2019 report, “performance and outcome data have not been used sys-
tematically to assess the eectiveness of federal activities,” and this is a signicant shortcoming in federal
programs.
23
FLEC member agencies, led by the Executive Committee, will identify outcome measures and
seek to align performance metrics.
Measures may be used that reect an individual’s ability to balance multiple nancial decisions at once, such as
managing income and expenses, assets and liabilities, and taking steps to build and protect assets. For exam-
ple, the FLEC will consider the best ways to use the CFPB’s nancial well-being measure, which uses a com-
bination of subjective and objective factors to assess a person’s “state of being wherein a person can fully meet
current and ongoing nancial obligations, can feel secure in their nancial future and is able to make choices
that allow them to enjoy life.”
24
Additionally, the Department of Defense includes questions from the nancial
well-being scale in its annual Status of Forces Survey to understand nancial well-being and condence among
military servicemembers.
Accountability and Reporting
e FLEC will use its required annual report to Congress, the Strategy for Assuring Financial
Empowerment,
25
to report on “the success of the Commission in implementing the national strategy” and
progress towards developing performance and outcome measures.
26
e report will describe the FLEC’s actions
to improve coordination, streamline activities, appropriately allocate federal resources, and other actions to
implement this National Strategy 2020 and the impact of its COVID-19 response.
Allocation of Federal Resources
In its 2019 report, Federal Financial Literacy Reform, Treasury described federal nancial education spending
so that policy makers in the executive and legislative branches can consider the overall allocation as well as the
specic uses of funds.
27
Determining both a current and ideal allocation of funding is dicult because only
some nancial education activities are directly appropriated or allocated. A FLEC member’s nancial educa-
tion activities may be part of other agency activities, such as consumer outreach, or an eligible use of a larger
grant program. Additionally, some member agencies are non-appropriated agencies and independent agencies.
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In order to promote coordination and ecient use of resources, the FLEC will regularly review information
on the allocation of resources within nancial education priority areas. In order to promote ecient use of
resources, FLEC members agreed, in the bylaws, to collaborate to develop recommendations for the allocation
of resources for nancial literacy and education among such agencies in the President’s budget request.
Outreach and Communications Agenda
Working Groups will develop plans to collaborate on events, messages, social media, and campaigns to share
nancial education resources with the public directly, such as through the FLEC’s mymoney.gov website and
key intermediaries. Working Groups will identify relevant and consumer-friendly resources from their member
agencies on their respective priority areas for deployment.
28. Public Law 115-435.
29. is document summarizes research as of 2016: FLEC, Promoting Financial Success in the United States: National Strategy for Financial Literacy 2016
Update, 2016, available at: https://www.treasury.gov/resource-center/nancial-education/Documents/National%20Strategy%20for%20Financial%20
Literacy%202016%20Update.pdf.
30. FFLR, 52-53.
Research and Learning Agenda
e FLEC will develop and promote a shared research and learning agenda that identies priorities and goals
for aligning federally supported research on nancial literacy and education. e research and learning agenda
will be developed through the Working Groups in consultation with non-federal researchers and funders.
is agenda will be developed consistent with the 2019 Foundations for Evidence-Based Policymaking Act
(the Evidence Act).
28
Since the FLEC’s rst National Strategy was issued in 2006, substantial research conducted and supported by
federal agencies and other entities has greatly increased the understanding of Americans’ nancial knowledge,
areas of improvement, and approaches to nancial education.
29
Even with this progress, many stakeholders
have recommended that the FLEC develop a strategy to share planned and completed research in order to
enhance eorts and avoid possible duplication. In addition, the FLEC can better promote use of existing
research to inform both policy and practice.
Furthermore, improved coordination could enhance use of data collected by federal agencies to understand
consumer nancial behaviors (and thus make more informed policy and program decisions to address those
behaviors) and develop education resources that better meet people’s needs. Research is valuable to inform
federal policies, improve programs, and assist other stakeholders in the nancial education ecosystem to
deliver education more eectively. is enhanced coordination would also help non-governmental researchers
and research funders assess gaps in the nancial education eld, and thus more eciently use their own
resources for research.
30
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Other Considerations in Implementing the National Strategy
Participation by state and local governments, private, nonprot, and public institutions in the National Strategy.As
noted in the Treasury’s 2019 report, “it is essential to leverage private-sector resources and coordinate federal
activities with resources at the community level.”
31
Treasury consulted with state and local government
organizations and private and nonprot institutions in developing the recommendations that inform this
National Strategy (see Appendix 1). In implementing this National Strategy, the FLEC plans to coordinate
and consult with intermediaries and groups critical to nancial education such as: state, tribal, and local
governments; nonprot organizations; nancial institutions and nancial services industry; Federal Reserve
Banks, Government Sponsored Enterprises (GSEs); and state and local education agencies and educational
institutions. is coordination and consultation will build upon existing relationships between FLEC
member agencies and key external entities and will focus on coordinating activities that share the common
goal of improved nancial decision-making and nancial outcomes.
Role of technology. FLEC agencies and the nancial education eld must consider the quickly evolving
technology landscape as they develop strategies to improve nancial decision-making. Currently, FLEC
agencies deploy some technology-based approaches, such as Federal Trade Commission’s email and
social media campaigns on frauds and scams, ED’s interactive online resources that enable consumers to
explore options for college and loan repayment and online counseling tools for student loan borrowers.
32
Additionally, CFPB has created an online training program, Misadventures in Money Management that uses
an interactive game-like virtual environment to build nancial knowledge.
33
In implementing this National Strategy, the FLEC will seek to ensure its approaches are responsive to
consumer demand for technology-based tools, while acknowledging the challenges that emerging
technology can have on privacy and consumer access. us, FLEC members will be mindful of new
approaches while honoring traditional methods of improving nancial decision-making such as in-person
counseling and guidance.
31. FFLR, 13-14, citing Cackley, Alicia Puente, Financial Literacy: Overview of Federal Activities, Programs, and Challenges, Testimony Before the
Subcommittee on Financial Institutions and Consumer Credit, House Committee on Financial Services, U.S. Government Accountability
Oce, April, 2014, GAO-14-556T,
32. See https://studentaid.gov/resources/prepare-for-college/students/career-search, https://nces.ed.gov/collegenavigator/, and https://studentaid.
gov/app/counselingInstructions.action?counselingType=entrance.
33. See https://www.consumernance.gov/practitioner-resources/servicemembers/mimm/.
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4. Conclusion
Financial education has become widely recognized as an important tool for building and maintaining
nancially independent individuals, families, and communities. is broad agreement means that many
dierent stakeholders – governments, private, and nonprot organizations – have undertaken actions to
educate Americans on nancial concepts and products to improve their ability to make sound nancial
decisions and support improved nancial well-being.
Expanded nancial education has not always been accompanied by rigor, quality, and cost-eectiveness. Given
the sizable investment by the federal government, the private sector, and others, the nancial education eld
is in an optimal position to pursue necessary improvements on these issues. If the eld focuses on assessing
outcomes, measuring performance, and deploying evidence-based best practices, it can more positively
inuence the nancial outcomes and decision-making of millions of Americans.
e federal government, through the coordination eorts of the FLEC, will support and encourage this
drive by directing its eorts where it can be most eective. ese actions will improve and expand nancial
education by promoting best practices, sharing evidence, creating expert, unbiased resources where needed,
and deploying policy solutions to support the country’s nancial education infrastructure. By serving as a
thought leader and partner, the federal government can help improve Americans’ nancial knowledge, skills,
and decision-making, and encourage Americans to use these abilities in pursuit of a brighter nancial future.
rough this leadership, the federal government can work with those across the nation who are similarly
committed to improving the quality and reach of nancial education and promoting prosperity and better
economic outcomes for all Americans.
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Appendix 1: National Strategy Process and Consultations
34. FFLR, 62-65
is National Strategy 2020 builds on the research and consultations conducted by the Treasury in developing
its 2019 Federal Financial Literacy Reform report. at process included review of the nancial education and
related literature, discussion and data collection from members of the FLEC, and consultation with more than
140 outside entities, including state and local governments, academic and research institutions, trade and pro-
fessional organizations, and both nonprot and for-prot nancial educators and nancial service providers,
among others. A list of those consultations is found in Exhibit A of the 2019 report.
34
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i
. This Appendix is excerpted from FFLR.
Appendix 2: Best Practices for Delivery of Financial Literacy and
Education
i
Introduction
Based on extensive review of the research, consultations with experts, and discussions with members of the
FLEC, Treasury has noted a number of themes regarding eective nancial literacy and education. ese
themes point to best practices for incorporating nancial education into diverse situations, with various
populations, covering a number of key topics. ey are cross-cutting, rather than subject specic, and thus can
be used to inform nancial education policy and practice whether at home, in a community program, or when
setting national policy.
Treasury has identied the following eight best practices for eective nancial literacy and education programs.
e rst ve best practices are consistent with the principles identied by CFPB in its study entitled the “Five
Principles of Eective Financial Education.” e additional three best practices have been added based on
Treasury’s outreach to stakeholders
Know the Individuals and Families to be Served
Financial education, information and delivery methods must be tailored to the circumstances and needs of the
user. “Knowing the population” happens at two levels: understanding the demographic context of the individual,
and assessing the individual’s own needs, barriers, skills and motivation.
Several studies are already produced by government agencies to help understand dierent populations. Some
examples include the FDIC’s National Survey of Unbanked and Underbanked Households and the Federal
Reserve Board’s Survey of Household Economics and Decision making and Survey of Consumer Finances.
Other organizations provide more specialized understanding of distinct populations, such as the DoD’s Status
of Forces Surveys of Active Duty Members.
e eective educator must also understand the individual and his or her unique situation and mindset.
Attitude and needs assessments can help the educator and consumer identify gaps and motivations in order to
customize the nancial education approach. For example, CFPB developed a Financial Well-being Scale which
helps assess a person’s perceptions about their nancial well-being.
Provide Actionable, Relevant, and Timely Information
Although the academic community has an ongoing debate on the eectiveness of nancial education alone,
there is agreement that when nancial information is delivered in an actionable, relevant and timely manner,
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people are more likely to retain the information and act on it. For example, a body of evidence indicates that
nancial education alone has had a small impact on nancial behaviors, in part because nancial knowledge
decays within two years of the lesson. On the other hand, some academics point to the need for behaviorally
based strategies such as nudges or designed choice architecture, and information provided in close time
proximity to when consumers are making nancial decisions, known as “just in time nancial education.”
is type of relevant, timely and actionable information should include concrete steps for the consumer and
be directly applicable to a nancial decision about to be made. For example, pre-purchase housing counseling
takes advantage of what is important to the person seeking information and is typically delivered close to the
purchase of a home. In another example, the benet estimates in the Social Security Statement provided to
individuals near to retirement age have been found to help people make more informed decisions about when
to claim Social Security benets, thus impacting their income in retirement.
Improve Key Financial Skills
Financial literacy and education can be more eective when it helps develop skills in knowing how to achieve
their specic goals, rather than transmitting knowledge of particular facts about nancial products and
services. Eective nancial literacy approaches are structured to: 1) help consumers know when and how
to locate information for making nancial decisions; 2) help consumers understand how to interpret
information for decision-making; and 3) help consumers have skills and condence to take action and
implement their decisions.
Build on Motivation
Eective nancial literacy and education programs capitalize on people’s motivations. People driven by
intrinsic values, desires, interests or aspirations are more likely to stay focused (because they want to learn) than
those forced into learning through extrinsic pressures (because they have to learn). is best practice highlights
the importance of nancial educators who use empathy and identify learners’ specic goals, understand the
learners’ nancial conditions and help learners achieve their own goals. For example, people who are strongly
motivated by values of a particular faith may nd programs that build on those values, such as those developed
by a faith-based organization, to be particularly helpful. Similarly, one-on-one coaching and peer support have
also proven eective at turning motivation into action.
Make It Easy to Make Good Decisions and Follow Through
is best practice acknowledges that it can be hard for people to stick with their goals, but the environment
or context can make it easier for people to carry out their intentions. Even small adjustments to a process,
such as nudges and defaults, can help make it easier for people to make sound choices. Changing the options
presented, removing hassles and barriers, and adding supports can help people bridge the gap between their
intentions and what they actually do. is best practice also highlights that programs can be designed to make
it easier for people to get nancial education, for example, by integrating nancial education into programs
and places where people already are, like their job or a higher education institution. For example, institutions
of higher education are uniquely positioned to inuence how education-related nancial choices are presented,
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ii. Consumers should be careful to identify coaches or counselors that provide a legitimate, fairly-priced service. The Federal Trade Commission
provides guidance at: https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor.
made and executed, such as through nancial aid oers, and can provide nancial education
through various
venues and times to engage students during their education.
Develop Standards for Professional Educators
According to the National Endowment for Financial Education (NEFE): “e educator needs to be condent,
competent, and knowledgeable about the topic of personal nance in order to create a learning environment
that is ideal for student-learning. Fundamentally, educators should demonstrate high levels of understanding—
both with the content and the pedagogy—of the topics that espouse the tenets of nancial capability.”
However, there are few standards or designations to denote the quality or qualications of nancial educators.
is lack of standards may result in uneven quality of delivery, and makes it dicult for consumers, funders
and policy-makers to select appropriate providers.
Many stakeholders point to the need for clearer guidelines and possibly standards to make nancial education
a more serious, evidence-based endeavor. e GAO’s 2011 report assessing the feasibility of a federal nancial
literacy certication process determined that a federal certication process was feasible, but a number of
challenges need to be considered. ese include the cost and stang of certication, lack of consensus on
denitions and standards and uncertainty that certication would improve quality and be valued by consumers.
e GAO noted ways to improve quality without full certication, including voluntary certication and
specic guidelines provided to federally-funded nancial education programs. Financial education standards
would provide a baseline for developing curriculum, include core competencies for both consumers and
educators, and provide a common platform for evaluation and measurement.
Provide Ongoing Support
Financial education is most eective when it is not a one-time strategy, but rather enables continuing
opportunities for people to build their knowledge and condence, set goals, and receive feedback as action
is taken. For example, there is a growing body of research pointing to the positive potential of one-on-one
financial coaching and counseling as a method for teaching financial literacy and education and assisting
clients with taking action to strengthen their financial health and well-being.
ii
Trained professionals
collaborate with and guide clients in reaching the client’s financial goals, which may involve overcoming
setbacks (like too much debt) and creating action plans (saving for a child’s education or starting a business).
Evaluate for Impact
National Endowment for Financial Education and other national stakeholders have stressed the importance
of supporting research to identify and promote eective practices in nancial literacy and education. e array
of nancial education providers (many of which are small in scale), the relative youth of the eld, and the
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diversity of goals in nancial education pro¬grams create a lack of consistency that makes data collection and
evaluation challenging. Researchers do not have a shared set of standards for reporting on nancial education
and measuring changes in nancial literacy that clearly identify changes in knowledge or behavior. Despite the
call for national goals, the federal government has not established a methodology for achieving common goals.
In addition, the federal government has not established a strategy for evaluating the eectiveness of individual
programs and initiatives nor developed a way to measure national progress towards improving nancial literacy.
While there may be challenges to assessing federal activities, performance metrics, gauging progress towards
goals and promoting a culture of data collection, evaluation and continuous improvement should be a key focus
for the FLEC moving forward.
