Considerations for the Future of Financial Literacy



On March 31, President Biden issued a proclamation recognizing April of 2021 as National Financial Capability Month1. Since the month of April is already reserved for Financial Literacy, the additional focus on financial capability seems a reflection of the times. According to CNBC, a recent survey revealed that many Americans believe that more financial education would have helped them better manage their money throughout the pandemic2. This ought to come as no surprise to those working in the financial realm, especially considering our previous reports on the state of financial education, but why aren’t financial literacy initiatives enough, why must we now hone focus upon capability as well and what does that mean for Financial Literacy Month moving forward?

National Financial Literacy Month was made official in 2004 when the U.S. Senate passed a resolution to formally assign it to April, according to Forbes. Its roots, however, can be traced back to the National Endowment for Financial Education (NEFE) and its Jump$tart Coalition which sought to raise awareness around financial literacy and education. The original event was dubbed Youth Financial Literacy Day, which evolved in 2000 to Financial Literacy for Youth Month3. Congress may have nixed ‘youth’ from the title, but Financial Literacy Month still tends to revolve around the basics.

That is not to say that the basics are no longer relevant or that the state of financial education is currently flawless. Instead, the key takeaway is that full financial awareness does not stop at knowing how to read and speak the language. Director of educational outreach at Next Gen Personal Finance Yanley Espinal explains, “Studies show that at the end of the day if your behavior isn’t changing then what’s the point of reading a million articles?2

In short, knowing the basics and applying those basics to real life are two very different things, and financial capability is about taking financial literacy to its next logical step. According to the Center for Financial Inclusion, capability refers to taking what you know about finance and having the willingness, confidence and opportunity to act on that knowledge. In practice, one’s capability relies heavily upon circumstance and is therefore a more abstract practice for individuals4.

So, what does this mean for the future of Financial Literacy Month? A review of the past illustrates just how far financial education has come since 2004. While there is still much to be done in the realm of financial literacy and education, the time has come to expand those lessons into the abstract world of applying financial savvy to situational realities. To do this, the Center for Financial Inclusion suggests, “Those who use financial education must work hand-in-hand with those whose goal is to improve the enabling environment, whether these are financial service providers, savings group promoters, activists trying to change the ‘rules of the game,’ regulators who set those rules, or other stakeholders within a particular economy and society4.”

The MICPA will continue to be an active force in the push for greater financial education, capability and equality. We encourage our members to continue working throughout the year to raise awareness around financial literacy. Members interested in taking this issue forward can login to MICPA Connect to find how to get involved with the MICPA Financial Literacy Task Force and continue to drive financial literacy and capability initiatives into the future.

  1. A Proclamation on National Financial Capability Month.” White House Briefing Room. 31 Mar 2021. Accessed on 28 Apr. 2021.
  2. Reinicke, Carmen. “More Financial Education Would Have Helped People…CNBC. 6 Apr. 2021. Accessed on 28 Apr. 2021.
  3. Payne, Kevin. “National Financial Literacy Month: 30 Days to…Forbes. 2 Apr. 2021. Accessed on 28 Apr. 2021.
  4. Stuart, Guy. “What is Financial Capability?” Center for Financial Inclusion. 1 Nov. 2013. Accessed on 28 Apr. 2021.

Source: MICPA

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