With research showing that financially capable young people are more likely to become financially secure adults, the Financial Literacy and Education Commission recently launched an exciting new effort to help enhance young Americans’ financial capability. The Starting Early for Financial Success initiative builds on the experience and resources of Treasury and key federal agencies to help young people have an understanding of financial basics as they begin their careers.
Treasury’s Under Secretary for Domestic Finance Mary Miller discussed the new initiative at a Commission meeting last week:
The Commission will now focus on improving Americans’ financial capability in childhood, a critical time in an individual’s financial education. As surveys have shown, young adults today face high levels of debt, which may cause them to delay building assets that lead to more stable futures. Today’s youth are not thinking about their retirements either. For example, one study from PNC Financial found that only 13 percent of 20-21 year-olds and less than 50 percent of 28-29 year-olds reported that they had contributed to a retirement savings account.
There is an enormous opportunity to reach these young Americans by “Starting Early.” We know that starting retirement accounts early in an individual’s life allows assets to accumulate towards the goal of a financially secure retirement. Research indicates that individuals who have a savings account in their own name as children are more likely to finish college, which also leads to more financially secure futures. Children whose parents teach them about financial topics early in life are more likely to have positive financial outcomes in adulthood, such as higher credit scores and lower credit card debt.
The Commission spent several months working to develop this new effort, which also increases access to proven resources designed to help parents and teachers prepare young people for financial success. Treasury is proud to lead the Commission and looks forward to working with it and other partners to implement this exciting initiative.
To learn more about the Commission, click here.
Louisa Quittman is the Director for Financial Education in the U.S. Department of the Treasury’s Office of Consumer Policy.