Speaking at a Fed town hall meeting with educators, Chairman Ben
Bernanke said kids today will have it better than their parents. But
they'll also need to be financially astute, and Bernanke said every
student should be exposed to an economics or personal finance class.
Children today will have a better lifestyle than their parents. But they will also have to take on greater personal responsibility for their futures and require a higher level of financial acumen, Fed Chairman Ben Bernanke said Tuesday.
“My best guess is that our kids will be better off than we are,” Bernanke said during a town hall meeting with educators, called to discuss financial education in schools. He cited technology gains that make workers more productive, great universities, an entrepreneurial culture, an efficient market-based economy, and a diverse workforce as leading factors for his optimism.
But the Fed chief was quick to note that kids will face many challenges, and one of them is the need to become more financially astute. “If you think about what adults are required to do each day,” economics and financial literacy are critical, he said. Among the things that Bernanke says kids must learn:
- How to evaluate student loans
- How to seek credible information before making a purchase
- That financial education is a “lifelong undertaking”
He also said that incorporating money lessons in classes on civics, history and math makes sense, adding, “I don’t think there are any students who should not be exposed to a basic financial literacy course.” From his prepared remarks:
One interesting and timely approach, he said, would be to study why countries compete to host the Olympics, which are so often massive money losers.“Financial education supports not only individual well-being, but also the economic health of our nation. As the recent financial crisis illustrates, consumers who can make informed decisions about financial products and services not only serve their own best interests, but, collectively, they also help promote broader economic stability. Smart financial planning–such as budgeting, saving for emergencies, and preparing for retirement–can help households enjoy better lives while weathering financial shocks. Financial education can play a key role in getting to these outcomes.”
Jim Lo Scalzo / EPA
Federal Reserve Chairman Ben Bernanke has called the buying-up of mortgage-backed securities a "viable option."
Bernanke said rates are low for a reason. That is what will get the economy moving again, which is good for everyone. Meanwhile, you still have goals like paying for college, buying a home and retiring. This requires saving no matter how low rates may go—in fact it requires saving even more as rates decline. He didn’t say it in so many words, but his message was: Focus on the goal, not the rate of return, and you’ll be ahead of the game.
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