Fall 2004
Wayne Abernathy is a staunch advocate for improved financial literacy and seeks to highlight successful programs as he travels across the United States.
Mr. Abernathy, U.S. Treasury Assistant Secretary for Financial Institutions, selected the Orlando offices of InCharge® Education Foundation to conduct a roundtable August 10 to discuss the importance of improving the nation's level of financial literacy. In addition to InCharge executives, more than 15 representatives from local private, non-profit, academic and government sectors participated in the forum.
"Businesses, schools and local leaders play a key role in improving financial education in their communities. By continuing to work together and identifying best practices for financial education, communities can help people enjoy the benefits of acquiring good personal finance skills," said Abernathy. "By helping to coordinate this important effort, groups like the InCharge Education Foundation improve access to financial education."
InCharge Education Foundation, the personal finance education arm of InCharge Institute, produces a variety of personal finance education tools including Military Money. We interviewed Abernathy during his Florida visit; here are some highlights:
MM: What are your responsibilities as Assistant Secretary for Financial Institutions?
ABERNATHY: My main responsibilities in the area of financial education are to encourage people to be engaged in the process of educating our fellow citizens of all ages on the basics of financial education and to share with them the best practices we have discovered from across the country that have the greatest likelihood of changing people's behavior. We work with standard K-12 educational programs in public and private schools, as well as private sector businesses and non-profits that recognize that a financially educated consumer makes a better consumer, for example, or that by reducing bankruptcy rates we can reduce costs on business as well as business customers.
MM: Is there room for financial education in the classroom? There are only so many hours in the school day…
ABERNATHY: Maybe we don't need more courses so much as we need to integrate personal finance concepts into what is already being taught. If you're teaching math basics, why not have them do that with a checkbook? Not only do the children learn financial literacy issues, they learn math and other subjects better because they see the immediate practical application.
MM: How will the Fair and Accurate Credit Transactions Act of 2003 benefit Americans?
ABERNATHY: We have an outstanding system for sharing consumer financial information in this country, and it makes it possible for consumers to carry their reputations with them. We have a very mobile society and when someone moves, they don't need to re-establish their credit history. We looked at how we can harness that reporting system to promote things like the security of personal information. So with that legislation, customers, businesses and law enforcement will obtain new tools to fight problems like identity theft.
MM: What are your thoughts on the brisk use of credit today?
ABERNATHY: Consumers always need to be careful that they're borrowing for the right reasons and not use debt and credit to live beyond their means. Fortunately, the data seems to suggest, as a group, that actual debt service costs are declining, and that's a very good sign. People have been taking opportunities to restructure some of their debt, such as home refinancings. Of course, we are always concerned about individuals who may be getting themselves into debt difficulty, and that's why one of the basic principles of financial literacy we encourage is proper credit management.
MM: What is your top goal in terms of achievements in financial literacy?
ABERNATHY: We are pursuing many different goals but, at the top of the list, I would hope to see these concepts of financial education find their way into the textbooks. If we can have these important principles in the textbooks being used by children in their math, social studies or civics classes, then we will lay the groundwork for making financial literacy a permanent part of our culture.
# # #
Carl Surran is managing editor of Military Money. He may be reached at comments@militarymoney.