Financial Literacy, as defined by the Presidents Advisory Council on Financial Literacy, or PACFL is...
"the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being."
Other conceptual definitions are that financial literacy means someone:
- has knowledge of finances
- understands how financial markets work at a basic level
- understands basic economic principles and how global economies work
- has the ability to make investment decisions
- understands how money works so that they can make better savings and investment decisions
Now matter how you define it, in the end, the outcome of any financial literacy program is to help you understand that if you spend less than you earn, and invest your money wisely, you will be more likely to enjoy a higher quality, more productive life.
As far back as 1787, financial literacy has been a concern for the leaders of America.
In a letter to Thomas Jefferson, John Adams wrote...
“All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.”
The first 200 years of financial literacy saw a recognition by global leaders of the need to educate people on how to better understand and manage their finances.
In 2004, the CPA profession got involved with their own initiative called the 360 Degrees of Financial Literacy. This is a collaborative effort between the AICPA and local CPA societies to tackle the financial illiteracy epidemic.
Then, in recognition of the growing need in the United States for people to become more financially literate, on January 22, 2008, then President George W. Bush signed an executive order creating the President's Advisory Council on Financial Literacy. (PACFL)
The purpose of the council was to bring together experts in both business and personal finance to "encourage financial literacy among the American people.
As part of our ongoing effort to support financial literacy programs in our community, we are, for the full school year, going to be working with the public schools in Milford, MA to deliver in-school and evening educational financial literacy sessions.
There are two parts to the program. One will be delivered as part of an in-school session specifically geared towards the kids.
The other part will be delivered in the evening, once of month, for each month of the school year. Starting October 8th, we will be delivering a program to Tweens, Teens and their parents.
We created a page where we are going to collect financial literacy resources over time.
There are a number of execellent free resources available on a number of organization websites. Here are a few of the more comprehensive websites:
The AICPA started the 360 Degrees of Financial Literacy as a volunteer effort if the nation's CPA's to help Americans understand and develop better financial management skills.
There are free resources for everyone including teens, students, employed persons, business owners and more.
Feed the Pig is a website designed to help you start saving your money. They have tools, resources, tips and more, all designed to help you put together an action plan to better manage your finances.
Jump Start Coalition Resources is a comprehensive library of resources dedicated to helping advance finance education from kids pre-school through college age.
Channel One News has a great interactive tool to help you get started putting together your budget.