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Treasury Notes

 Strengthening Americans' Financial Capability

By: Melissa Koide

As the country recovers from the worst economic crisis in generations, one of the most important questions Americans face is how to manage and maximize their personal finances. There is no question that Americans’ financial well-being depends first and foremost on employment and steady income. But it also depends on a solid understanding of how personal finance works, an ability to access safe financial products for short-term needs and long-term goals, and knowing the best resources to turn to if financial decisions are too complex.  

As Deputy Assistant Secretary for Financial Access, Financial Education, and Consumer Protection, I lead the office at Treasury focused on strengthening Americans’ financial capability. And while I don’t profess to have the magic bullet, I do have three ideas to help us get there.

First, we have to bring more financial education into our classrooms. Giving our children the education to master math and personal finance will arm them with the knowledge and the confidence to successfully navigate the range of financial decisions they’ll make throughout their lifetimes.  As a mom of three children, I know how crowded the school day is, but I also see how early in life money management habits form. Teaching our kids basic money management and math skills is an essential first step, and teachers are critical to reinforcing what kids learn at home.

Second, we must make sure that families have trusted information and resources to rely on when making financial decisions. Even minor daily decisions can add up to serious long-term financial problems if not handled correctly. Big financial decisions – how to safely borrow for college, buy a car, or purchase a home – also have tremendous impact on a family’s finances, yet millions of Americans make these decisions without enough information or access to trusted resources. The government provides free, reliable financial resources for Americans to take advantage of, including at and And the Consumer Financial Protection Bureau, created in the 2010 Wall Street Reform and Consumer Protection Act signed into law by President Obama, is focused on making sure Americans have the information they need to make sound financial choices.

Last, I believe we must take full advantage of new technology to deliver timely, relevant, personalized financial information so individuals can make informed, real-time decisions. Over the past few years, innovators have begun creating technology-driven savings, payments, and financial education tools that can help Americans better manage their finances day-to-day. From new ATMs that let customers set monthly withdrawal limits, to smart phone and personal computer programs, useful financial messaging and alerts are now available to provide people timely information before fees are charged and budgets are exceeded.  

As President Obama said last week at the start of National Financial Capability Month, “The resilience and ingenuity of our people are driving our economic recovery, and as we lay the foundation for an America built to last, we must also promote a financial system that is fair and sound for all.” Earlier today, Deputy Secretary of the Treasury Neal Wolin opened a meeting of the President’s Advisory Council on Financial Capability where he echoed those sentiments. He said, “It’s important for us to remember what set this crisis into motion. Businesses took on too much risk. Washington let those risks grow unchecked.  And in communities across the country, Americans made dangerous financial decisions that they did not fully understand. We are in a much better place today, but there’s still more to do. […] We must knock down barriers that keep consumers from successfully navigating today’s complicated financial world.”

These exciting new financial capability tools and resources have the potential to knock down those barriers and help Americans become better, more capable financial stewards.  Our Office of Financial Access, Education, and Consumer Protection is excited to leverage these types of innovations which could supplement the tested, effective approaches that already exist to help strengthen Americans’ financial capability.

Melissa Koide is Deputy Assistant Secretary of the Treasury for Financial Access, Financial Education, and Consumer Protection.

Posted in:  Financial Capability
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