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Posts from April 2011

Talking to Our Daughters and Sons about Personal Finance

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Today is Take Our Daughters and Sons to Work Day! This day is partly about the fun children can have in seeing your workplace, but it is also a chance for them to think about the future. Money skills are part of that future. Whether or not you take your children to work today, think about talking to them about money and savings when you get home from work.

Here at the CFPB, parents who bring their kids to work will talk to them about what we do, and also about why we do it. We’re working for our families and for all American families. We want everyone to understand the prices, risks, and benefits of financial products so they can make the best decisions for their families.

Kids learn about money from their parents. One of the best ways to help our kids follow good financial practices as adults is to talk to them now. Consider:

  • A recent survey shows that almost half of adults who closely monitor their finances say they learned about personal finance from their parents or at home.
  • Peer influences are important for adolescents, but parents have a greater influence than peers in at least one area: money management.
  • Adolescents who practice financial tasks modeled by their mothers tend to feel more financially prepared as adults.

Talking to kids about money can seem daunting. Their questions can get uncomfortably personal, but you can decide before you start the conversation if you want to tell them all the details or give an overview. You might want to give specific examples, such as why it is good to pay more than the minimum on your credit card bills or how you can save for a down payment on a family car. Or you can describe a financial trick or trap that is important not to fall into. Of course, what is appropriate depends on the age of your child and whether you’ve already started the conversation.

We want to help! Here is a list of resources that can help you figure out what you want to say, how to explain it clearly, and how to get both teens and kids to think creatively about saving and personal finance.

Talking to Teens

Talking to Kids

  • “You Are Here” from the Federal Trade Commission
    “You Are Here” uses a familiar shopping mall setting to teach kids to be more savvy consumers.
  • The Bureau of Public Debt’s kids site
    The Bureau of Public Debt (BPD) helps make the U.S. debt real to kids. Part of the site is devoted to how the government borrows money and what that money is used for. The site also offers videos and tools to help kids understand saving, including information about U.S. Treasury bonds.
  • The U.S. Mint’s education page
    What better way for a young child to start saving than with coins? The U.S. Mint site offers puzzles and other interactive tools to help children understand coins and savings.

Most important of all, your conversation should be goal-oriented. Remember that saving money – at any age – is about planning for the future. Thinking about future family or personal expenses for your child will help both of you think about saving in a practical way. It also makes the outcome of saving that much more concrete.

My kids are adults now, so I couldn’t bring them to work with me today. But when they were kids, we had the same kinds of dinner table conversations that my parents had with my brother and I when we were kids: about the value of education, hard work, and savings. I remember my parents talking about saving to replace our car. We talked to our kids about that, and about how much more something costs if you put it on a credit card and carry a balance. I think those moments help to prepare children for their lives as adults. Please join us at the CFPB in sharing these kinds of conversations with your kids.

Continuing our work with Community Banks and Credit Unions

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Since Professor Warren spoke at the Independent Community Bankers of America convention last month, she and I have continued to meet with community banks and credit unions. We were thrilled to reach the milestone of connecting with small providers in all fifty states, but we know there is still more for us to do. As we said at the time, we are continuing to reach out to independent bankers and credit unions from across the country to better understand their concerns.

The week before last, Professor Warren connected with thirty-eight members of the North Carolina Bankers Association in Charlotte. In Columbus, Ohio, I spoke about the new consumer bureau and our goal to ensure a level playing field for small depository institutions with several hundred members of the Ohio Credit Union Association at their annual convention. And over the last two weeks, we have been in touch with community bankers from California, Arkansas, Kentucky, New York, and Alabama. We have reached out to the State Department Federal Credit Union, and we spoke to the community bank group at the American Bankers Association.

Finally, last week Professor Warren traveled to Lexington, Kentucky, where she delivered the Chellgren Lecture at the University of Kentucky Law School. While there, she also participated in a seminar in Louisville called A Day with the Commissioner. The event was hosted by the Kentucky Department of Financial Institutions and the Federal Reserve Banks of St. Louis and Cleveland. Many attendees of the seminar came from nearby banks, and Professor Warren stressed that consolidating the functions of several agencies into one will simplify the banks’ regulatory burden.

We want to hear from you: Consumer Education and Engagement at the CFPB

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I’ve just joined the CFPB as the Associate Director for Consumer Education and Engagement. I come from outside Washington, D.C., and from outside government. I moved across the country to do this job because, like my colleagues, I believe in the mission of the CFPB. That mission is to promote a fair, transparent, and competitive financial marketplace in which consumers can easily compare financial products and have the information they need to make the best choices for themselves and their families. As I get started, I want to tell you a bit about our work and ask for your thoughts.

My team and I will focus on two big tasks: financial education and consumer engagement. Consumers with financial knowledge and tools are an essential part of a fair, transparent, and competitive market. Consumer engagement refers to our work sharing ideas and information with consumers and listening to the experiences and views of consumers. Together, these initiatives will enhance the other work the CFPB will do for consumers: handling consumer complaints; understanding markets; making or amending rules where necessary; and ensuring compliance with applicable rules through supervision and enforcement.

The Consumer Education and Engagement team will work to reach you, the American consumer, wherever you are. We will focus on what is helpful and usable. We recognize that we will need to provide a variety of tools and approaches to respond to the different types of financial choices you face.

Our primary focus in financial education is simple: We will promote what works. We will identify proven, effective forms of education that help consumers make their own sound financial choices. We will work with a variety of experts: educators, consumer organizations, economists, researchers, and community leaders. We will focus on how to help consumers understand the financial choices they need to make. Our goal is to help consumers understand the costs, risks, and benefits of financial products as they decide whether to buy those products.

Financial products change so fast that our work may focus more on the types of questions to ask and things to consider than on the details of each and every complicated product. At the same time, throughout the CFPB, we will work to make the costs, risks, and benefits of financial products more transparent. We will also talk about the value of savings. Even a small emergency fund can protect you and your family. When you have a financial emergency, that fund gives you a choice you wouldn’t otherwise have: between borrowing and using those savings.

The CFPB is focused on consumers, and we want to learn from you. We have an obligation to understand all types of consumers, including those who face unique types of financial markets or financial challenges. The Consumer Education and Engagement team has four offices dedicated to this task. We will talk to and listen to servicemembers, students, older Americans, and groups who have traditionally been underserved in the financial system. In response to those conversations, we will develop ways the CFPB can help address problems faced by those groups.

You may already know about the work of Holly Petraeus, who leads the Office of Servicemember Affairs. She has been visiting military bases and units across the country since January, talking about the financial challenges facing American men and women in uniform. Zixta Martinez leads our Community Affairs office and is reaching out to consumer groups, civil rights groups, community organizations, and others. Soon we will hire leaders in the fields of student financial issues and the special financial issues facing older Americans.

We want to hear from you and work with you. Please share your ideas with us. If there is a topic you think we should offer resources about, let us know. If you like what you see from us, consider reposting it, tweeting it, or sharing it with your friends both online and offline. If you have ideas about new tools that could make it easier to compare financial products, please share them. You can start by sharing this post with others, by commenting on this post, or by sending us an email.

National Financial Literacy Month

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April is National Financial Literacy Month! Read the Presidential Proclamation here.

At the CFPB, we’re working to raise awareness by offering a few seasonal tips to help you get your financial house in order and spring into financial security. Stay tuned in the days ahead for blog posts and other new content.

  1. Dust off Your Credit Report
    Check your credit report at least once a year to correct errors and detect unauthorized activity. It’s free and it’s yours, so make sure you know what’s in there. Remember, only one web source is authorized to distribute this information to you for free once a year: www.annualcreditreport.com. You can also request your report by phone. Call 1-877-322-8228 or fill out this Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
  2. Learn your Federal Student Aid Options
    High school graduation is just around the corner. Don’t miss out on the many federal grant and loan options available to almost everyone. Start by completing the new and improved FAFSA form today.
  3. Know Before You Go
    Navigating the financial marketplace can be overwhelming. Prepare yourself with these helpful checklists and tip sheets before making your next financial decisions.

Fulfilling a Commitment

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In our first week on the job, Professor Elizabeth Warren set a goal for the new consumer bureau: to reach out to small, independent bankers from all 50 states before July 21st. We are excited to announce that she has reached her goal early after speaking to bank heads from Arizona, New Jersey, New Hampshire, Maryland, and Connecticut.

From Hawaii to Maine to Texas to Florida, we have engaged in thoughtful discussions with hundreds of bankers who come from all walks of life. We are grateful to them for the time they have spent with us, and we have listened closely to their thoughts and concerns. As we’ve worked toward our 50-state goal, we’ve tracked our progress with a map in my office. The pushpins below are a small piece of it; we’ve also kept it up to date here on the website.

Left: Elizabeth Vale's map. Right: Professor Warren at the ICBA. Click through for more photos from ICBA.

Left: Elizabeth Vale’s map. Right: Professor Warren at the ICBA. Click through for more photos from ICBA. Click the image to see more photos from this and other events on our Flickr page.

Speaking to bankers from all 50 states is a starting point. But making sure bankers will be able to continue effectively serving their customers cannot stop after a single meeting. We will continue to engage with the small institutions that help to create a robust and diversified financial services marketplace.

As part of this mission, Professor Warren was the keynote speaker at the Independent Community Bankers Association’s annual conference in Southern California last month. She spoke to more than 1,500 community bank CEOs about the new bureau’s top priorities and our commitment to engage with community banks as we build the CFPB. As she says in the clip below, there are issues they understand all too well, and we need them to share that knowledge.

During my many visits with you, I’ve heard about the high cost of regulatory compliance. I understand the difficulty of determining what is or is not required by a particular regulation – and the costs that creates. I appreciate the widespread anxiety and frustration over the future of community banks and other small financial institutions. I know that you want a regulatory structure that doesn’t require an army of lawyers. Big banks may be able to afford to hire all those lawyers, but you cannot.

This is what you have said to me in visits all around the country: Community banks work hard to build long-term partnerships with the families they serve. Community banks didn’t cause this financial crisis. And badly done regulation can further weaken our community banks, significantly increasing the pressures they face. How should the new consumer bureau incorporate these lessons into its work?

Read her full remarks.