House Bill 1462 would establish an Office of Personal Financial Education in New Hampshire's Treasury Department. If passed, the bill would provide financial literacy resources to New Hampshire's citizens and equip the State Treasurer with the authority to coordinate current efforts to improve financial literacy within state. This policy brief aims to explain the issues surrounding financial literacy and the policy options currently available to address them.
Although the definition of financial literacy remains somewhat ambiguous, authorities generally agree that a financially literate individual is one who can:
Make informed decisions about money
Manage basic financial instruments such as savings accounts
Avoid obvious scams
The primary questions addressed in this report are:
Why is there a need for financial literacy education?
What kinds of financial literacy programs currently exist?
What guidelines might help New Hampshire ensure the success of this office?
Over the past fifteen years, American consumers have found it increasingly complicated to manage their personal finances. Predatory lending, sophisticated marketing, and technological advances have created a fast-paced, overcrowded environment that many consumers struggle to navigate. As a result, more and more Americans find themselves fighting to stay out of debt. These trends are found in New Hampshire and throughout the United States.
In response to these changes, a growing movement has emerged to help tackle these problems by improving financial literacy through education. National, state, corporate and non-profit entities have implemented financial literacy education programs in an effort to teach individuals about money management with the expectation that increased education will result in wiser choices about spending and savings.
If the New Hampshire Legislature establishes an Office of Personal Financial Education, certain performance benchmarks may help to ensure adequate progress. A range of "best practices" may aid the New Hampshire Legislature in creating important accountability standards. They include: