ABSTRACT
Now more than ever, financial security is linked to the choices consumers make in their personal financial management. Consumer behavior is tracked through credit bureaus and other agencies, impacting the access consumers have to loans, rental property, mobile phones, and insurance; it also impacts the cost. In addition, trends over the last several decades have transferred the risk and responsibility of funding retirement from employers to the individual as defined benefit plans have been replaced with defined contribution plans. Individuals need to decide not only to invest, but also how much and where they should invest for their retirement. In a time when financial markets show extreme year-to-year swings, the consequences of poor investment choices may be substantial (VanDerhei, 2009). Financial markets have also become increasingly sophisticated. Deregulation has blurred the lines between banks, credit unions, and other financial institutions. The role of consumer information has increased and there is a great deal of information asymmetry between financial services providers and many consumers. Products have evolved substantially. The last several decades have seen new insurance products and securities-not to mention the influence of technology on access to information, sophistication of analysis, market functionality, and more. Economic education has been changing over the past few decades. Influential officials such as Alan Greenspan and Ben Bernanke have strongly advocated providing more personal finance education in school. Today, the U.S. Treasury has an Office of Financial Literacy and a Presidential Task Force on Financial Literacy. This is largely
due to the fact that consumers today have to make many more individual financial decisions regarding how to save and invest. This chapter will discuss the importance of financial education, its role in the economics curriculum and identify several ideas for teaching, as well as key resources.
