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The journey to adult financial well-being

Research from the Bureau of Consumer Financial Protection shows that the attitudes, skills, and habits adults need to make informed financial decisions and achieve financial peace of mind begin to develop in youth.

Explore four key steps on the journey to adult financial well-being, including a look at when, where, and how youth learn and develop the building blocks of financial capability.

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Adult financial well-being

People with the same income, opportunities, or education can have very different levels of adult financial well-being.

That’s because achieving financial well-being as an adult is about more than how much money you make or whether you’re able to do your taxes, balance your checkbook, or pay your bills. It’s about having control over your money and being able to make choices that allow you to enjoy life.

Since financial well-being is the ultimate measure of success for financial literacy education, educators are vital to this journey.

That’s where you come in.

Next stop: Nuturing youth financial capability

Youth financial capability

As children grow, their ability to manage money and understand financial concepts grows with them.

Youth financial capability grows over time and is a key stepping-stone on the path to adult financial well-being. By understanding how, when, and where youth acquire the building blocks of financial capability, educators can select relevant programs and introduce innovative financial education strategies to nurture this development.

You play a critical role in helping youth acquire these building blocks.

Next stop: The building blocks of financial capability

The building blocks of youth financial capability

Financial capability stems from three interconnected building blocks that support and encourage the development of additional skills and capabilities.

These building blocks provide a framework for youth financial literacy education and help define how students learn the skills and knowledge they need to achieve financial well-being as adults. They go beyond traditional financial education by fostering a holistic and interdisciplinary approach to teaching financial literacy in all grade levels and subject areas.

  • What is this building block?

    Executive function is the ability to plan ahead, remember information, multitask, solve problems, and control impulses.

    Why is it important?

    Executive function lays the foundation for financial capability. The associated skills help you save money, set financial goals, make buying and saving decisions, stick to a budget, and resist impulses.

    When do young people develop it?

    Development of this building block begins during early childhood and increases in complexity throughout childhood and adolescence, as a young person’s brain evolves, and their cognitive abilities mature. Executive function continues to develop into adulthood.

    How is it fostered in the classroom?

    Effective strategies for fostering executive function allow students to practice patience, planning, problem-solving, and other foundational skills and cognitive processes.

  • What is this building block?

    Financial habits and norms are the values, standards, routine practices, and rules to live by that you use to navigate your daily financial activities.

    Why is it important?

    Financial habits and norms help guide your day-to-day behaviors and money management routines for spending and saving. They shape the way you carry out common financial tasks.

    When do young people develop it?

    During middle childhood, this building block becomes more well-developed through observation of peers and the world around them, as well as their own direct experiences with money. Financial habits and norms continue to evolve through adolescence and into adulthood.

    How is it fostered in the classroom?

    Effective strategies for fostering financial habits and norms allow youth to draw meaning and connections from hands-on and real-world scenarios and experiences and apply them to their own set of practices.

  • What is this building block?

    Financial knowledge and decision-making skills include familiarity with financial facts and concepts along with competency in research and analysis.

    Why is it important?

    Financial knowledge and decision-making skills help you identify times when you need credible financial information, process and compare the information you find, and lay out steps to act on that information.

    When do young people develop it?

    During adolescence, development of this building block is at its height, as young people have more direct experiences with money and the financial world and are more engaged in complex tasks and decision making. Financial knowledge and decision making continues to develop into adulthood.

    How is it fostered in the classroom?

    Effective strategies for fostering financial knowledge and decision-making skills help youth find and evaluate financial information and recognize when they should seek out more information before making financial decisions.

Introducing activities that develop the knowledge, skills, and behaviors of each building block helps better prepare youth for financial success.

Next stop: Integrating the building blocks

The building blocks in the classroom

Integrating the building blocks of financial capability throughout K–12 education represents a promising opportunity to reach young people at pivotal points in their development and in their financial lives.

Educators working in schools, after-school programs, and community organizations can implement research-based strategies and provide supports and opportunities to help youth build a rich foundation for adult financial capability.

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Teach the building blocks of financial capability