Explosive growth in the number and complexity of financial products available to Americans has far outstripped programs aimed at teaching consumers how to choose and use those products, experts said Wednesday at a financial education conference in Oklahoma City.
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Consumers have dozens of options unavailable to previous generations in terms of retirement plans, loans and credit cards, said Karen Murrell of the New America Foundation, a Washington, D.C.-based think tank.
"What hasn't changed is the amount of education people get to help them make these decisions,” Murrell said.
One of the results has been a sharp decline in personal savings, Murrell said.
"People are not only spending every dime they have, they're dipping into savings,” she said. "Debt is rising much faster than household income.”
That problem is particularly acute in Oklahoma, where larger than average numbers of residents face divorce, bankruptcy and low wages, attendees said during the Financial Education in Oklahoma conference sponsored by the Oklahoma City branch of the Federal Reserve Bank of Kansas City.
Oklahoma is one of about 10 states that now require instruction on financial matters for middle-school and high school students. But the state's chapter of the Jump$tart Coalition also focuses on adult financial literacy, unlike its national parent that considers only student education.
Lack of financial literacy is a "serious problem” in the state, said Jennifer Wallis, president of the Oklahoma Jump$tart chapter.
Much of Wednesday's event focused on implementation of new financial education requirements in Oklahoma schools, but also included sessions on reaching other populations.
"One of the biggest challenges is meeting people at their current level of understanding,” Wallis said. "It's not a one-size-fits-all solution when it comes to education.”
Irving Faught, state Securities Department administrator, said his agency's investor education program is seeking to reach new audiences in several ways.
The agency provides financial literacy workbooks to teens moving from foster care and the juvenile justice systems, and the department also soon will begin broadcasting its InvestOK public service announcements in Spanish, Faught said.
A lack of financial savvy can bring consequences far beyond economics, said Rene Renick, director of programs and operations for the National Network to End Domestic Violence.
Financial skills often are needed to escape an abusive relationship, Renick said. Surveys show that finances are the No. 1 reason cited by women for remaining in a violent relationship, she said.
"It's not enough to provide a bed to get someone away from a life of violence,” Renick said.
Murrell said financial knowledge carries other benefits.
Three studies indicate financial education and counseling improve consumers' economic conditions, Murrell said. Informed consumers cut their mortgage default rates, boost their savings and increase their participation in retirement programs, the studies show.
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