Why is every person’s ability to recover from financial setbacks important to the Federal Reserve, and are there resources you recommend to ready people for the unexpected?
As appeared in the Cleveland Fed Digest's Ask the Expert
I realized at a very young age the importance of being prepared for unforeseen financial circumstances. Growing up, my mother always talked about how her parents, especially her father, instilled in her the importance of having your own resources because “life happens.” My parents separated when I was 7, when my mother found herself in a situation that wasn’t healthy for her and me. Because she had gone to college, because she had embraced the mindset that even as a married woman it was wise to have her own financial means, she was able to leave and make a better life for us.
It was around high school when I started realizing the impact of what financial knowledge could do to help people improve their standing in life and be independent. Education is a huge component of that. I’ve always been passionate about finding ways to help the people around me, and that’s led me down the career path to community outreach.
One aim of the Federal Reserve is a stable financial system. You can’t have a financially healthy community if people don’t have basic knowledge about what financial health is or how to get there. It’s important that all people are empowered to make informed choices. When people don’t know what financial health looks like and aren’t prepared to recover from financial setbacks, they can end up relying on the help or generosity of others to stay afloat.
In our Education & Museum Outreach department, one of our goals is to teach people of all ages about various topics ranging from the basics of money to preparing for the future. Our Great Minds Think interactive workbook, available in English and Spanish, teaches kids and their parents the basic foundations of personal finance; it offers young learners a place to dream about things they’d like to save for, and it stresses the importance of budgeting and saving.
For young people and adults, the Building Wealth workbook from the Federal Reserve Bank of Dallas is among the Fed’s most popular personal finance resources. And the Atlanta Fed offers Katrina's Classroom: Teaching Money Skills for Life, a series framed around the aftermath of Hurricane Katrina with the theme of emergency and financial preparedness. All three are among the free resources available at federalreserveeducation.org.
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