Editor’s note: This post was authored by Vishnu Sridharan, Director of the Make Your Path (MY Path) Program at Mission SF Community Financial Center in San Francisco, California and a former member of the Global Assets Project at New America.
To mark the launch of Financial Literacy Month in April, the Council for Economic Education will release a new set of standards to establish what youth should know about money by the end of 4th, 8th, and 12th grade. The state of Florida is considering passing a bill that requires that “financial literacy must be included in high school graduation requirements.” An increase in attention to financial literacy is a positive development. However, growing research shows that financial literacy alone is “not sufficient,” and that what genuinely impacts the economic trajectory of youth is the ability and opportunity to act on their knowledge. As such, we might be better off focusing not on financial literacy initiatives as such, whose primary aim is to impart information, but instead on financial capability initiatives, which also include a strong behavioral component.