Released: October 2007
The National Standards for Adult Financial Literacy Education identify the personal finance knowledge and skills an adult should possess. The Institute for Financial Literacy® contends that all adults who receive financial literacy education should have, at a minimum, the knowledge and ability to competently perform the basic tasks of managing their personal finances.
Financial literacy is a lifelong process requiring both academic and practical components. No single textbook or educational program can result in a financially literate adult. Financial literacy textbooks and education programs must be clear and concise, and they may be components of a comprehensive financial literacy curriculum. Such curricula should be graduated and consistent with the user’s financial sophistication. Furthermore, the effectiveness of adult financial literacy education programs and textbooks should be validated by research.
The Institute for Financial Literacy strongly recommends that adult financial literacy education programs be designed to appeal to multiple adult learning styles and modalities, and utilize any educational resources found to be effective.
To download PDF versions of these documents:
National Standards for Adult Financial Literacy Education (PDF)
Best Practices Guidelines for Adult Financial Literacy Education Materials (PDF)
Standard I: Money Management
Recognize how cash flow management and net worth analysis can be used as tools to achieve financial goals.
Money Management Benchmarks:
Cash Flow Management
Identify the components of a budget
Create personalized budget documents
Revise their budgets to reflect current cash flow
Personal Net Worth
Identify the components of a personal net worth statement
Create personalized net worth statements
Understand that their net worth will fluctuate as the values of their assets and liabilities change
Financial Goal Setting
Differentiate between short and long term financial goals
Prioritize their financial goals
Construct a realistic financial goal action plan
Revise their financial goals as life circumstances change
Standard II: Credit
Know how and where to obtain credit, and the implications of using and misusing credit.
Differentiate among the types of credit
Understand which types of credit are better suited for particular purposes than other types
Identify types of financial institutions where credit can be obtained
Understand how the credit application process works
Utilization of Credit
Comprehend the legal implications of using credit
Understand what a credit report is, how to dispute errors in credit reports, and what a consumer’s rights are regarding credit reports
Understand what credit scores mean and the significance of their use in modern life
Recognize what precautions can be taken to prevent identity theft and fraud, and what to do if victimized
Standard III: Debt Management
Recognize how using debt can be a tool in asset building.
Debt Management Benchmarks:
Know what tools are available to them to measure their debt load
Determine what their appropriate debt load is
Understand the difference between good debt and bad debt
Recognize the warning signs of excessive consumer debt
Understand options available to assist with excessive debt loads
Evaluate which professionals can assist in dealing with excessive debt issues
Standard IV: Risk Management
Use appropriate risk management strategies to protect assets and quality of life.
Risk Management Benchmarks:
Differentiate among the types of insurance products
Understand their insurance needs
Comprehend the implications of being insured or uninsured
Evaluate the effectiveness of risk management tools in protecting against financial loss
Assess their risk tolerance level
Use risk tolerance levels in developing risk management strategies
Standard V: Investing & Retirement Planning
Implement investment and retirement strategies to achieve financial goals.
Investing & Retirement Planning Benchmarks:
Differentiate among the types of investment vehicles
Identify the types of financial institutions where investment products can be purchased
Understand the differences between retirement and non-retirement, and qualified and non-qualified investments
Recognize the importance of planning for retirement
Evaluate the risks and rewards associated with investment options
Understand the role risk tolerance plays when choosing investment vehicles
Comprehend the legal implications of investing
Assess their overall financial situation in determining retirement needs