This is a modest proposal and actually may not be very original. But this is a very important topic that is not getting enough attention. This proposal could be implemented easily and quickly if it had the right partners.
Our financial system offers many options for people to save, invest and obtain credit. But having all these options is not necessarily a good thing. These increased options have also added more complexity to a financial system that was already pretty intimidating for many people. Many of us do not have a basic understanding or knowledge about finance to make good financial decisions for ourselves. Studies have shown that this financial "illiteracy" is widespread across the U.S.
A lack of understanding of basic financial concepts has been linked to a lack of retirement planning and bad borrowing habits. Financial illiteracy can lead to people not only making poor financial decisions it makes people vulnerable to predatory practices such as predatory home lending, payday loans and other financial scams. Financial literacy is an essential life skill.
Since financial literacy is such an important life skill, access to learning basic financial skills (such as balancing check, monthly budgeting and understanding loan terms) should be free and broad. Actually, this proposal would provide an excellent marketing opportunity for credit unions across the country - an opportunity to expand credit union membership.
The proposal: National Financial Literacy Centers
1) These centers would provide a basic financial skills curriculum plus additional classes covering specific topics such as investing in stocks, bonds or real estate or home ownership.
2) Teachers for these classes could be retired volunteers or unemployed college students (which would require some training) or unemployed financial industry people. Maybe, we could use some stimulus money to pay these teachers.
Credit unions would be the ideal partner in this public-private partnership because of their membership structure and not-for-profit status.