As Chair of the Assembly Banking and Finance Committee, one of my top priorities is spreading the word on the importance of financial literacy. A well informed and financially literate consumer can save thousands of dollars at the closing table, avoid abnormal fees and charges and build up savings for retirement. Financial literacy is not only about learning the skills necessary to balance a check book, it is about personal empowerment.
Let’s Talk about Financial Literacy
The U.S. Financial Literacy and Education Commission define financial literacy as "the ability to make informed judgments and to take effective actions regarding the current and future use and management of money."
Financial literacy is not only the basic skills of balancing a checkbook, or computing interest rates, but the ability to use that information to make informed decisions about ones financial future and stability.
The market place functions best when educated consumers are able to make informed choices regarding their personal financial needs and goals.
A well informed and financially literate consumer can save thousands of dollars at the closing table, avoid abnormal fees and charges and build up savings for retirement. Financial literacy is not only about learning the skills necessary to balance a check book, it is about personal empowerment.
Financial literacy is a growing issue and is already affecting Californians in a myriad of ways. To name a few, financial illiteracy depresses college graduation rates, homeownership, and increases dependence on welfare services, the number of bankruptcy filings, as well as mortgage default rates.
Research shows that teaching financial literacy early in life – through our K-12 education system, private entities and nonprofits all working diligently on this issue – is crucial in order to prevent these consequences from negatively impacting our youth and their future.
Moving forward, the Legislature must address existing gaps in these approaches and ensure that the next generation doesn’t lose out on the American dream simply because we fail to make available the tools needed for success.
That is why I introduced AB 858, which establishes the California Financial Literacy Initiative for the purpose of improving the availability of instructional materials and programs to help students understand how to manage their finances and protect their financial privacy.
AB 858 – California Financial Literacy Initiative
AB 858 will establish the California Financial Literacy Initiative, which will make financial literacy material more accessible to our teachers and educators throughout California.
ACR 53 – Financial Fitness Month
California highlighted the importance of Financial Literacy by passing ACR 53, which declared the month of April 2017 as Financial Fitness Month. The theme of “Financial Fitness for Life,” was chosen to raise public awareness about the continuing need for increased financial literacy.