April is National Financial Capability Month, after all.

Several stories this month about financial literacy and what it means. There is a set convinced that literacy is a self-serving exercise for financial institutions who promote murky products (the CDO is apparently back, here).  If financial institutions did not create complicated products, then we would not need to be financially literate. Preach transparency, promote opaqueness etc. etc. Whatever happened to caveat emptor?

A second line of thinking is convinced that financial literacy  is a crock (here and here). Literacy programs do not appear to increase financial knowledge. As an example, one literacy challenge of the week (here) asks students to estimate their student-loan payment. Even finance students might seriously consider bashing their heads repeatedly against a wall rather than engaging in this exercise! Okay , so amortization schedules are not cool, but how about the stock market? This is the thinking behind stock market contests, games and apps. But then it circles back to the self-serving argument again. The stock market is rigged, sucking you into the stock market under the guise of literacy is another way these sharks take your money.

The fact is that most people do not want to learn about finance, they just want financial advice and for someone “reliable” to tell them what to do. I might find the intricacies of the municipal bond market interesting, but my neighbor just wants to know if she should buy such a bond or not.The true challenge is for finance educators to try to make this stuff interesting. Perhaps it is not about finance after all, but only about marketing?

Some links of note–The National Financial Educators Council (here),  Bank of America partners with the Khan Academy (here).

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