Office of Financial Literacy seems tucked away in financial reform bill

The financial reform bill Congress would like to pass by the Fourth of July consists of establishing a new Office of Financial Literacy. The new Dodd-Frank financial reform bill also includes a new Consumer Financial Protection Bureau to enforce ethical behavior from banks. But ultimately, consumers will have to educate themselves about money management to stay out of financial trouble. The Office of Financial Literacy will try to make it easier for them to do that.

Source of article:Office of Financial Literacy tucked away in financial reform bill by Personal Money Store

Financial literacy national strategy
The Office of Financial Literacy as written into financial reform bill isn't really the first effort by the government to encourage financial management from consumers. A 2003 law that provided individuals a free credit report once a year also established the Financial Literacy and Education Commission, which was charged with developing a national strategy for financial literacy. In 2004 the FLEC started the MyMoney.gov site to give a central location where consumers can find money management tools and useful government financial info.

The great FLEC financial literacy site
Recently the FLEC's financial literacy website got a new look. The new version of the site creates online access where users can discover data about how to plan for life events that have financial implications, like birth or adoption of a child, home ownership or retirement. There are also answers to questions about a variety of personal or professional situations. MyMoney.gov offers money-management tools including a savings calculator, household budget worksheets and a college prep checklist.

Americans are literally lazy about finances
To promote financial literacy, the government has pushed knowledge more than regulation. The assumption is the a lot more high-quality details and money management tools consumers have, the better choices they will make. But Americans are financially lazy. It seems like it is common knowledge that we should spend less, conserve more and shop around for the best credit card rates. But many of us don't.

The American financial literacy is lacking
In a survey of American financial literacy, the Wall Street Journal reports the Finra Investor Education Foundation — the research arm of the securities industry regulator — found that about half of those 45 or older hadn't tried to calculate their retirement needs. About half of the 1,500 people who were surveyed also admitted to sometimes carrying a credit-card balance and paying interest. When interest rates rise, bond prices fall was a fact known by only five. The survey also found that 57 percent of adults who earn more than $ 75,000 a year don't shop around for credit cards, and 46 percent don't compare prices on auto loans bad credit. Also, each year, adults do not typically check their credit.

The Key will always be debt to income ratio
Debt is the most painful consequence of inadequate financial literacy. Seerpress.com reports that although the current average debt-to-income ratio of in America is down to 122 percent from 133 percent in 2007, it still should be below 100 percent. In contrast, from 1960 to 1985, the debt-to-income ratio in America was way below 70 percent. The government is trying to do its part by imposing stricter policies and offering free advice. Spending less than you make might be financial literacy. That is a personal responsibility.

More information available at these web sites:

FLEC website
205.168.45.52/

Wall Street Journal
online.wsj.com/article/SB10001424052748703280004575309143171720002.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop

Seerpress.com
seerpress.com/four-things-that-could-help-you-financially-understand-money-save-money-stop-borrowing-money-and-think-outside-of-the-financial-box/1795/