Other Youth Topics

Breadcrumb

  1. Youth Topics
  2. Financial Capability & Literacy

Financial Capability & Literacy

Click here for the youth topic on financial capability and literacy

Financial capability and literacy is “the capacity, based on knowledge, skills, and access, to manage financial resources effectively.”1 This set of skills can help youth achieve financial well-being, which happens when they can fully meet current and ongoing financial obligations, feel secure in their financial future, and are capable of making decisions that allow them to enjoy life.2 Financial education is how youth can learn these skills through a variety of resources and programming.

Today’s youth face a financial marketplace that is more complex than the one faced by previous generations. A recent study found that millennials have greater financial concerns than older generations:

  • 55 percent of millennials with student debt worry that they will not be able to pay off their debt, and
  • almost 50 percent are concerned that they have too much debt in general (i.e., credit cards).3

Financial capability is knowing how to spend wisely, manage credit, and plan for the future. Financial capability is an effective way to help youth, no matter their circumstances, avoid common financial vulnerabilities and build economic stability.4 Youth should be educated about finances early in life and at pivotal points in their development and financial lives.5 Having a higher financial literacy early in life is associated with:

  • less credit card debt,
  • higher savings rates,
  • and fewer personal bankruptcies.6

As they approach high school graduation, students and their caregivers will make important decisions about whether to pursue higher education and if so, how to face the reality of paying for it. Additionally, youth who do not attend college or trade school directly after high school will more quickly face financial responsibilities as adults.7 These early choices can have a long-lasting impact on their financial well-being.

Resources

Brochures and Fact Sheets from the Consumer Financial Protection Bureau (CFPB)
This website provides a list of the CFPB’s brochures, bookmarks, fact sheets, fliers, worksheets, and posters that can be downloaded or ordered in bulk. Many of these publications are available in multiple languages.

Consumer.gov
This website can help youth manage their money, understand credit, identify scams, and prevent theft.

Money Smart for Young People
The Federal Deposit Insurance Corporation (FDIC) offers Money Smart, a financial education curriculum designed to teach basic financial topics to people with low- and moderate-levels of income. Tools are available for different age groups and in nine languages.

MyMoney.gov
This website contains financial education resources for young people, caregivers, and educators. It is organized around the My Money Five principles: spend, earn, save and invest, protect, and borrow.

Quick Tips for Managing Your Money (from the FDIC)
This web page provides strategies and practical guidance to help young adults and teenagers with borrowing, saving, banking, and avoiding scams.

References

1 U.S. Department of the Treasury, 2010
2 Consumer Financial Protection Bureau, 2015
3 Mottola, 2014; millennials are born between 1978 and 1994
4 Consumer Protection Financial Bureau & U.S. Department of Health and Human Services, Administration for Children and Families, 2014
5 Center for Financial Security, 2012
6 Bernheim, Garrett, & Maki, 2001
7 McCormick, 2009

Other Resources on this Topic

Youth Voices

Youth Briefs

How Individualized Education Program (IEP) Transition Planning Makes a Difference for Youth with Disabilities

Youth who receive special education services under the Individuals with Disabilities Education Act (IDEA 2004) and especially young adults of transition age, should be involved in planning for life after high school as early as possible and no later than age 16. Transition services should stem from the individual youth’s needs and strengths, ensuring that planning takes into account his or her interests, preferences, and desires for the future.

Youth Transitioning to Adulthood: How Holding Early Leadership Positions Can Make a Difference

Research links early leadership with increased self-efficacy and suggests that leadership can help youth to develop decision making and interpersonal skills that support successes in the workforce and adulthood. In addition, young leaders tend to be more involved in their communities, and have lower dropout rates than their peers. Youth leaders also show considerable benefits for their communities, providing valuable insight into the needs and interests of young people

How Trained Service Professionals and Self-Advocacy Makes a Difference for Youth with Mental Health, Substance Abuse, or Co-occurring Issues

Statistics reflecting the number of youth suffering from mental health, substance abuse, and co-occurring disorders highlight the necessity for schools, families, support staff, and communities to work together to develop targeted, coordinated, and comprehensive transition plans for young people with a history of mental health needs and/or substance abuse.

Young Adults Formerly in Foster Care: Challenges and Solutions

Nearly 30,000 youth aged out of foster care in Fiscal Year 2009, which represents nine percent of the young people involved in the foster care system that year. This transition can be challenging for youth, especially youth who have grown up in the child welfare system.

Coordinating Systems to Support Transition Age Youth with Mental Health Needs

Research has demonstrated that as many as one in five children/youth have a diagnosable mental health disorder. Read about how coordination between public service agencies can improve treatment for these youth.

Civic Engagement Strategies for Transition Age Youth

Civic engagement has the potential to empower young adults, increase their self-determination, and give them the skills and self-confidence they need to enter the workforce. Read about one youth’s experience in AmeriCorps National Civilian Community Corps (NCCC).