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The need for financial education—knowledge that helps
people make sound, informed financial decisions—has become
increasingly important for financial institutions and community
economic development practitioners. Rising consumer debt and
low household saving rates show Americans’ growing need for
financial education, as do other indicators (see below).
Why is the need for financial education so pressing?
Today’s consumers are no less knowledgeable than past generations;1
rather, quickly accelerating changes in the financial
services market have increased all Americans’ need for financial
literacy, regardless of income or educational background.
Consumers must choose from a wide array of providers and
complex new financial products, and they have become more
responsible and involved in asset building and retirement
planning. Long-term investments that affect future financial
well-being require deliberate, informed decisions. Demographic
changes—such as new immigrant populations, a growing
proportion of elderly in certain regions, baby boomers preparing for retirement,
and college students graduating with debt—highlight the need for all populations
to understand the basics of planning for their financial present and future.