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Federal Reserve Personal FinancialEducation Initiatives
This article was prepared by Lynn Fox, of the Board’sOffice of Staff Director for Management, and Joy Hoffmann, of the Federal Reserve Bank of San Fran-cisco, with assistance from Carolyn Welch, of the Board’s Division of Consumer and Community Affairs.
Personal financial education, once primarily the con-cern of individual households and the organizationscommitted to assisting and educating them, nowplays a prominent role in the work of many financialinstitutions, community and faith-based groups, non-profit organizations, and local and federal govern-ment agencies. Growing concern about the level of knowledge needed to manage personal finances hasresulted from the confluence of many factors, includ-ing an expansion of credit availability and changesin pension funding mechanisms that have made con-sumers more responsible for their long-term financialsecurity. Also contributing to the rise of interest hasbeen a marked increase in the number of providersand the complexity of the consumer products offeredby the financial services industry.
1
These trends underscore both the promises and thepitfalls of financial services and draw attention to theimportance of deliberate financial planning and sav-ings to achieving such life goals as buying a home,funding higher education, starting a business, andsecuring a comfortable retirement. In addition toaffecting the quality of life of individual households,the attainment of these goals, when taken in theaggregate, has important macroeconomic implica-tions, as a more financially educated population con-tributes to market efficiency and thereby helps pro-mote the general economic welfare.The Federal Reserve has for many years workedwith educators and community groups to promoteeconomic and financial education and consumerawareness. More recently, Federal Reserve BoardChairman Alan Greenspan, other Board members,and Federal Reserve Bank presidents have steppedup their advocacy of financial education, noting thattechnological advances and a changing financial mar-ketplace require informed financial decisionmaking.In recognition of the growing importance of suc-cessful personal financial management to individualsand the broader economy, the Federal ReserveSystem—from the Board of Governors at its centraloffice in Washington, D.C., to the twelve regionalFederal Reserve Banks and their Branches—hasintensified its efforts, focusing on three strategicareas:• increasing awareness of the importance of per-sonal financial education• participating in and facilitating collaborationsto improve efficiency in the delivery of financialeducation• studying the effectiveness of financial educationprograms
 R
 AISING
A
WARENESS
 National Awareness Campaign
In May 2003, the Federal Reserve System launched‘‘There’s a Lot to Learn about Money,’’ a multifac-eted, nationwide financial education campaign withtwo purposes: to highlight the importance of soundfinancial decisionmaking among American familiesand to raise awareness of the financial educationresources available through the Federal Reserve andother providers. The campaign reached out to indi-viduals, community groups, and consumer advocatesthrough a variety of media. A website rich in infor-mation on borrowing, homebuying, wealth building,and other topics of interest to consumers was devel-oped. A brochure full of tips for consumers on waysto take charge of their financial future was prepared.Public service announcements (PSAs) featuringChairman Greenspan were recorded for radio andtelevision, in English and Spanish. The System
Note.
Also contributing to this article were Marianne Hilgert,Jeanne Hogarth, Rose Pianalto, Jeff Smith, and Karen Vassallo, of theBoard of Governors.1. For a discussion of the changes prompting increased attention tofinancial literacy, see Sandra Braunstein and Carolyn Welch, ‘‘Finan-cial Literacy: An Overview of Practice, Research, and Policy,’’
Fed-eral Reserve Bulletin
, vol. 88 (November 2002), pp. 445–57.
447
 
hosted a toll-free telephone number, advertised in thePSAs, through which callers could request copies of the brochure. And both the Board and the ReserveBanks hosted national, regional, and local events andeducation activities for the public throughout themonths following launch of the initiative.
2
The campaign
’
s reach was broad. The 30-secondPSAs were broadcast in many media markets acrossthe country; the radio version was aired more than37,000 times, and the television version 12,500 times,during the
fi
rst twelve months of the campaign. Thewebsite averaged more than 9,700 visits a monthover the period. And more than 141,000 brochures inEnglish and 6,700 in Spanish were distributed.Members of the Board were actively involvedin the effort, beginning with a press conference inMay 2003 at which Governor Edward M. Gram-lich announced the campaign. In June, ChairmanGreenspan, together with then-Richmond ReserveBank President J. Alfred Broaddus, Jr., and OperationHope CEO John Bryant, spoke to eighth grade stu-dents at a Washington, D.C., middle school aboutthe importance of learning good money managementskills. In September, Chairman Greenspan alsoappeared before the annual legislative conference of the Congressional Black Caucus to discuss the impor-tance of 
fi
nancial education.
3
Three days after launching the nationwide cam-paign, the Board, together with the U.S. Depart-ment of the Treasury, co-sponsored a roundtable oncredit management for representatives of 
fi
nancialservices organizations and community and consumergroups.
4
The participants identi
fi
ed the practices mostimportant to effective management of personal credit:building savings to avoid high-cost debt and improvepayment options; paying bills on time; paying morethan the minimum payment; comparison shoppingfor credit and obtaining only the credit you need; andunderstanding your credit history and how it affectsyou. Those top practices were publicized in a pressrelease issued jointly by the Board and the Treasurythe following August.
5
Federal Reserve Bank Activities
Activities undertaken by the Federal Reserve Bankswere an important part of the awareness campaignand are an ongoing element of the Federal Reserve
’
sefforts to promote
fi
nancial education. The ReserveBanks have used creative programming, teacher train-ing, sponsorship of public events, and developmentof new print and web resources to reach people of all ages in the twelve Federal Reserve Districts. Forexample,
•
The Chicago Reserve Bank 
’
s 2003 edition of itsannual
‘‘
Money $mart Week 
’’
featured nearly ninetyfree educational events tailored for a wide range of groups
—
educators and students; children, parents,and seniors; public housing residents and
fi
rst-timehomeowners; small-business owners; and the generalpublic
—
all promoting effective management of per-sonal
fi
nances in one way or another. The events,many sponsored by local community organizationsand
fi
nancial institutions, were held in schools, com-munity centers, libraries, and banks throughout thecity. In 2004, Chicago
’
s Money $mart Week grew tomore than 100 events, and a similar week of activitieswas held in Detroit by the Chicago Reserve Bank 
’
sDetroit Branch.
•
The New York Reserve Bank collaborated withlocal
fi
nancial institutions, community organizations,the FDIC, and the local Operation Hope af 
fi
liate tolaunch the
‘‘
Banking on Youth
’’
program for inner-city 16- to 18-year-olds who participated in the city
’
ssummer youth employment program. The programhad both classroom and practical elements: A
fi
ve-week course focused on management of personalcredit, with an emphasis on savings; local banksopened savings accounts for the participants; andorientation sessions for the participants were usedas opportunities to reach out to participants
’
familieswith information about banking and banking oppor-tunities. Some of the young people saved as muchas $2,500 over the summer. The Banking on Youthprogram is now being replicated in Buffalo, N.Y.
•
The Cleveland Reserve Bank takes its
‘‘
GreatMinds Think!
’’
education road show to citiesthroughout the District. At these free, day-long work-
2. The
‘‘
There
’
s a Lot to Learn about Money
’’
website is availableat www.federalreserveeducation.org/ 
fi
ned/index.cfm; the brochure isavailable in English at www.federalreserveeducation.org/ 
fi
ned/psa.pdf and in Spanish at www.dallasfed.org/educate/pubs/emoney.pdf.3. The complete text of Chairman Greenspan
’
s remarks is avail-able at www.federalreserve.gov/boarddocs/speeches/2003/20030926/ default.htm.4. Participants in the roundtable, which was chaired by TreasuryAssistant Secretary Wayne A. Abernathy and Board Governor Gram-lich, included representatives of the National Foundation for CreditCounseling, the Association for Financial Counseling and PlanningEducation, the In-Charge Institute, the American Bankers Associa-tion, America
’
s Community Bankers, the Credit Union National Asso-ciation, the Fannie Mae Foundation, Freddie Mac, American Express,MasterCard, Visa, the Community Financial Services Association of America, the Consumer Federation of America, the National Councilof La Raza, AARP, and College Parents of America.5. The release is available at www.federalreserve.gov/boarddocs/ press/other/2003/20030813/default.htm.
448 Federal Reserve Bulletin Autumn 2004
 
shops, students and teachers learn about using eco-nomics and personal
fi
nance basics to make educateddecisions. Workshop attendees discover economicprinciples portrayed in the world around them
—
in great literature, art, and contemporary movies.Teachers learn about economic policymaking and gettips on teaching economics and personal
fi
nance.Students take part in interactive activities, includingan
‘‘
in
fl
ation auction
’’
that allows them to experiencerapid deterioration in play money
’
s purchasing powerand
‘‘
A Million or One?
’’
which illustrates the powerof compound interest and exponential growth.
•
The Philadelphia Reserve Bank has established afaith-based initiative to make personal
fi
nancial edu-cation available to low- and moderate-income indi-viduals. Educational programs are presented by des-ignated volunteers at participating places of worship;the Bank conducts train-the-trainer workshops for thevolunteers.
•
The Atlanta Reserve Bank brought together poli-cymakers, researchers, business people, and educa-tors in a policy-oriented examination of the currentstate of economic and
fi
nancial education in Georgia.Sessions at this
‘‘
Georgia Summit on Economic andFinancial Education
’’
considered curriculum, teachertraining, and assessment, with a goal of identifyingand understanding the practical linkages betweeneconomic education and
fi
nancial education in theclassroom and beyond. Governor Gramlich was aspeaker at the conference.
•
The San Francisco Reserve Bank 
’
s CommunityAffairs department has facilitated numerous meetingson Indian reservations to promote access to credit and
fi
nancial education. At each meeting, a representativeof the Consumer Credit Counseling Service, a non-pro
fi
t community service organization, describesways the organization can help tribal members repairtheir credit and reach their
fi
nancial goals. Severaltribes have engaged the organization to develop train-ing programs on their reservations.
•
The Minneapolis Reserve Bank 
’
s CommunityAffairs department has taken a leadership role on theYouth Committee of the Native Financial EducationCoalition, an organization that works to facilitate theexchange of information, forge partnerships, developstrategies for outreach and training, and identify gapsin information about the
fi
nancial education needsof Native Americans. The Bank has assisted thecoalition in developing pilot programs to bring Nativeyouth together with
fi
nancial education tools tailoredto their needs.
•
The Dallas Reserve Bank has translated its work-book on personal
fi
nances into Spanish and has addedit to the Spanish-language portion of its website. TheBank has also added a Spanish-language option to itsphone line for requests for publications and has dis-tributed twenty thousand copies of the workbook thisyear.
6
These and other Federal Reserve programs tar-geted to a variety of audiences are summarized in thetable at the end of this article.
 Recognition for Contributions
The Federal Reserve
’
s efforts have been recognizedby organizations that promote economic and
fi
nancialliteracy. The National Council on Economic Educa-tion (NCEE) presented its 2003 William A. ForbesPublic Awareness Award to the System for its work to advance economic and
fi
nancial literacy. And theGeorgia Council on Economic Education (an af 
fi
liateof the NCEE) in May 2004 presented its
fi
rst-everChampion of Economic Education award to theAtlanta Federal Reserve Bank for its educationefforts and its cooperation with other organizations inthe state that promote economic education. Theaward was recognized in a special supplement to the
 Atlanta Business Chronicle
.
F 
OCUSING ON 
E 
 MPLOYEE 
E 
 DUCATION 
The Federal Reserve
’
s outreach has also extendedto its own employees. The Board and nearly all theReserve Banks planned extensive programs of 
fi
nan-cial education for their employees following a 2002meeting hosted by the Board at which private- andpublic-sector employers discussed ways to makeworkplace
fi
nancial education successful. Attendeesagreed that critical components of a successful pro-gram include basing education and communicationson life events (marriage and retirement, for example),providing a dynamic and changing curriculum (onethat is kept fresh and interesting), and delivering theinformation in both high-touch (in person) and high-tech (Internet and intranet) formats.At the Board, an interdisciplinary staff group beganmeeting in early 2003 to plan an initiative to providepersonal
fi
nancial education for Board employees.The resulting program was announced in a letter fromGovernor Mark W. Olson to the Board
’
s roughly1,800 employees at their homes in mid-April 2003.The letter noted the reasons for the initiative:
6. The Dallas Reserve Bank 
’
s Spanish-language website is atwww.dallasfed.org/entrada/index.html, and the workbook is availableat www.dallasfed.org/ca/ewealth/pdfs/riqueza.pdf.
Federal Reserve Personal Financial Education Initiatives
449
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