Tuesday, September 7, 2010

US Department of the Treasury Requests Comments on Financial Education Core Competencies

The Treasury Department has released a proposed set of Core Competencies for Financial Education and has asked for public comment on them. You can follow the links from the page above to see the competencies and how to submit your comments.

"The goal of the Core Competencies is to define what consumers should know and be able to do to successfully understand and make informed decisions about their personal finances." There are 5 "core concepts," which include: Earning, Spending, Saving, Borrowing and Protect and for each core concept relevant "knowledge" is listed and "action/behaviors." As I look at this list, I think about the mathematical knowledge that is needed for each action/behavior, or in some cases if mathematical knowledge is needed. 

Core Concept:  Saving
Knowledge: Saved money grows
Action/Behavior: Start saving early. Pay yourself first.

Core Concept:  Protect
Knowledge: Identity theft/fraud/scams
Action/Behavior: Protect your identity. Avoid fraud and scams. Review your credit report.

For Savings, there is a lot of mathematics behind why it's important to start saving early, but the habit of paying oneself first is more behavioral than mathematical (the behavioral economists have plenty to say about the best ways to do this and to automate it). Under the category of Protect, I would argue that there's some great mathematics to help consumers understand fraud and scams, but strategies to actually protect one's identity and to review one's credit report are not inherently mathematical.

I certainly don't think each financial education skills needs to have math behind, but as a math educator, it's nice to look at these topics to think of entry points for real world experiences into the mathematics classrooms.

What do others think when they look at the proposed core competencies?

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