While some parents do a great job of teaching their children how to handle money, many people become adults without ever learning the importance of saving money for emergencies and future expenses. Personal finance education has been available for decades from a variety of sources, but renewed interest in the topic may be the silver lining in the cloud of the global financial crisis and housing market meltdown.
Whether you are a parent or a teacher looking for financial education for young people or an adult hoping to get a better grasp on your assets, a variety of resources are available. The National Financial Educators Council has developed a financial literacy curriculum that can be used by schools, employers, nonprofit organizations and individuals. Courses can be found on the organization's website and are separated into sections for students in pre-kindergarten through second grade, third through fifth grade, middle school, high school, college and for adults.
Community Organizations
Community and business groups around the nation also provide financial literacy training, typically at little or no cost. For example, the Financial Women's Association in New York City has a Financial Literacy Committee that provides a seven-week course to teach financial skills to economically challenged women who are entering the workforce through training programs. The classes are taught at Nontraditional Employment for Women (NEW), an organization that trains women for jobs as plumbers, electricians, carpenters and other skilled positions, and at The Grace Institute, an organization that trains women in business skills.
The New York City Public Library offers a Financial Literacy Now program that offers one-on-one consultations with a certified financial planner.
Schools
Financial literacy classes are required in 14 states for high school students, while five states require students to be tested in the subject. In some cases, personal finance is incorporated with math or economics classes. According to U.S. News & World Report, the Jump$tart Coalition, which supports personal finance literacy throughout the United States, recommends that schools provide more than a single semester of personal finance training. Many schools offer things like in-school banks, stock market games and financial simulations starting in elementary school to promote an understanding of financial issues.
In addition to the curriculum used by individual schools, many banks and credit unions partner with schools to open accounts and to teach students about personal finance and the importance of saving.
Military
While the military trains men and women for defense and combat activity, most branches of the military also try to provide members with some personal finance training. For example, the Navy provides personal finance classes to sailors stationed at bases to prepare them for the financial decisions they need to make. Members of the military, particularly those who are young and inexperienced, are often victimized by people who try to take advantage of their vulnerability with financial scams.
In addition to classes, the booklet "Financial Field Manual: The Personal Finance Guide For Military Families," is in its second edition. Produced by a partnership between the Investor Protection Trust (IPT), the Investor Protection Institute (IPI), the Council of Better Business Bureaus (CBBB) and "Kiplinger's Personal Finance" the book focuses on key issues that are of importance to military families, such as investing, homebuyer resources and special benefits available to military families. The booklets are distributed for free at military bases around the globe, and are used as part of education programs for military families in 29 states and the District of Columbia.
Government
Over 20 federal government agencies have websites with personal finance information for consumers on topics ranging from home financing to credit card debt to student loans to avoiding scams, retirement planning and more. Information from all 20 of these sites is accessible from MyMoney.gov, a searchable website that functions as the primary source for consumers looking for advice on personal finance topics. The site can be read in English or in Spanish, and includes a variety of tools and calculators to assist with budgeting and financial decisions.
Credit Bureau
Most people think of FICO as the credit score generated by the three major credit reporting bureaus, but at MYFICO.com, consumers can find a plethora of information related to debt management and improving their credit scores.
The Bottom Line
With the wide availability of personal finance training, consumers have very few excuses for not learning to manage their money.
More From Investopedia
Debt crisis: Germany signals shift on €2.3 trillion redemption fund for Europe - Daily Telegraph
“We must recognise that we have a systemic problem. I am not sure the urgency of this is fully understood in all the capitals,” he said in a thinly veiled attack on Berlin.
Yields on 10-year Spanish debt hovered at danger levels just under 6.8pc on Wednesday on doubts that the EU’s €100bn rescue for the country will be the end of the story, with drastic knock-on effects in Italy. “The crisis will inevitably roll onto the next domino, and that is Italy, “ said Simon Nixon from Societe Generale.
Rome had to pay 3.97pc to raise €6.5bn of 12-month debt on Wednesday, compared with 2.34pc in May. Europe's bourses were mostly level with the FTSE 100 up 0.2pc, ignoring the warning signals from the credit markets.
"I feel very sorry for Italy," said Andrew Roberts, credit chief at RBS. "They have done the hard work over the years and have a cyclically-adjusted surplus. This is pure contagion."
"The fact that the rally lasted just two hours after Spain's bail-out is very corrosive. We are now accelerating into the end-game. Either we have fiscal pooling of one sort or another, or we are heading straight into euro exits and defaults," he said.
Italy's premier Mario Monti told the Italian Parliament on Wednesday that he expects the Redeption Pact to be "on the table" at the EU summit, even if it does not come into force immediately.
In Germany, the opposition Greens and Social Democrats both back the plan. Mrs Merkel cannot ignore them since she needs their votes to ratify the EU Fiscal Treaty, which requires a two-thirds majority.
Green leader Jürgen Tritten warned that his party would block the Treaty in the upper house unless the Redemption Pact was adopted. "It is central for us. The Europe of austerity is ending," he said.
Cross-party talks in the Bundestag broke down in acrimony on Wednesday over demands by the opposition for a "growth compact" to help lift Southern Europe out of its downward spiral. Mrs Merkel's Chrisitian Democrats will clearly have to give ground.
The Redemption Pact covers all public debts of EMU states above the Maastricht limit of 60pc of GDP, roughly €2.3 trillion. It is modeled on Alexander Hamilton's Sinking Fund in 1790 to clear up legacy debts after the American revolutionary war.
The idea is to treat the first decade of monetary union as a learning experience -- with mistakes made all round -- and allow a fresh start. The excess debt would be paid down over twenty years.
The beauty of the proposal is that would return Europe to the Masstricht discipline where each state is responsible for its own debts. It is the exact opposite of fiscal union.
Officials at Germany's top court say it appears compatible with the country's constitution -- unlike eurobonds. There would be a fixed limit to costs and the fund would not endanger the tax and spending sovereignty of the Bundestag.
The debt would be covered by joint bonds, payed for from a designated tax. Each country would be responsible for its own share of debt in the fund -- Italy €960bn, Germany €580bn, France €500bn, and so forth -- but would issue bonds jointly.
It is not yet clear whether Chancellor Merkel can persuade her own party to support the Pact. Her own finance minister Wolfgang Schäuble poured cold water over the idea earlier this week. "This fund is not feasable because it breaches with the European treaties and the `no bail-out' clause, which says countries cannot be responsible for the liabilities of another country. Without a joint fiscal policy you can't have shared liabilities," he told Stern Magazine.
Experts say this overlooks the tough conditionality. Italy and other states would have to pledge gold and other forms of collateral equal to 20pc of their debt in the fund.
"The assets could be taken from the country's currency and gold reserves. The collateral nominated would only be used in the event that a country does not meet its payment obligations," said the proposal.
Berlin would have veto lockhold, able to ensure discipline in a way that it cannot do with the European Central Bank where it has just two votes.
The fund would entail sacrifices for Germany. The country would no longer enjoy safe-haven borrowing costs -- curently 1.48pc for 10-year Bunds -- on a quarter of its total debt. A study by Jefferies Fixed Income concluded that it would cost Germany 0.6pc of GDP each year.
Yet the authors insist that any such costs will be outweighed by massive relief as Europe finally breaks the logjam of the last two years and offers southern Europe a chance to claw its way out of perpetual depression. Mrs Merkel is beginning to agree.
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