The Importance of Financial Literacy Education & Research

     Educators and MCEE Supporters, consider having your students, colleagues, friends, and family members measure their own financial literacy by taking this 3 question quiz from GFLEC, the Global Financial Literacy Excellence Center (GFLEC click here).  These 3 questions can be especially telling about their level of financial literacy knowledge. In fact, according to Professor Anna Maria Lusardi, GFLEC’s Academic Director, and as indicated in the 2015 National Financial Capability Study, 44% of the respondents that did not know the answer to at least 1 of the 3 basic questions, also similarly, reported being “financially fragile” (Lusardi, 2016). What does it mean to be “financially fragile”? (Lusardi & Tufano, BPEA, 2011). According to the survey, it is those individuals that specified their inability to come up with $2000 to cover an unanticipated expense (Lusardi & Tufano, BPEA, 2011).

Lusardi and Tufano attribute, based on survey results, “financial fragility” as either a “symptom of a lack of assets”, or a “lack of borrowing capacity of highly leveraged households” (Lusardi, 2016). But what is so telling for the Maryland Council on Economic Education’s work, is that 42% of millennials fell within the “financially fragile” category (Lusardi, 2016).  So clearly inferred is that young people could benefit from enhancing their financial education skills.  Additionally, in the 2015 FRB Survey of Household Economics and Decision-making (SHED), 46% of the respondents indicated that they would have trouble coming up with even $400.00 to cover an unanticipated expense (Lusardi, 2016). And, if you are wondering if a rigorous high school financial literacy education standards matter, consider listening to the following presentation by Max Schmeiser, a Senior Economist from the Federal Reserve Board of Governors, on the Effectiveness of Financial Education in High Schools. In a study of 3 states with rigorous financial literacy education standards, Schmeiser found that students (after graduation) tended to have higher overall credit ratings and better performing payment histories than students whose states lacked the same approach to financial literacy education (Schmeiser, 2015).

Educators, and Financial Capability Supporters, as we begin a new year, we hope that you will consider either supporting or taking part in Maryland Council on Economic Education financial literacy education programming.  Given the impact of our young peoples’ first financial decisions such as whether or not to seek post-secondary training, and how to pay for it, and their noted “financial fragility”, we think you’ll agree, that what we do in promoting financial and economic education matters.


Lusardi, Annamaria (2016). Household Financial Fragility: Evidence and Implications. Retrieved on December 6, 2016 from


Schmeiser, Max, (2015). What’s the Big Idea in Financial Literacy; Effectiveness of Financial Education in High Schools. Retrieved on December 6th, 2016, from