Financial Literacy 2007 - Budgeting
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smart spending
Interview: Anna Escobedo Cabral

In the aftermath of Hurricane Katrina, the underserved and the unbanked -- those without an established relationship with a financial institution -- faced significant challenges to making financial transactions. These people conduct most of their business on a cash-only basis, but finding access to needed check-cashing facilities or other financial services after the hurricane was not easy. Unbanked individuals could not benefit from services such as direct deposit, electronic bill payment or ATM withdrawals. In addition, many alternative providers of financial services throughout the Gulf Coast region faced property losses or other disruptions. As a result, unbanked individuals who were displaced often had limited access to their funds until after they relocated.

Anna Escobedo Cabral
Her signature is the official signature on our
nation's currency.

The challenges witnessed in the wake of Katrina demonstrate it is so important for people to sign up for direct deposit. Through Treasury's GoDirect Campaign we're encouraging seniors or anyone receiving federal benefit payments to switch to direct deposit. To sign up for direct deposit for Social Security or other federal benefits, individuals can call the Go Direct toll-free number at (800) 333-1795, or sign up online at The information is also available in Spanish at (800) 333-1792 and Direct deposit is a safer and more convenient way to receive federal benefits.

q_v2.gifRonald Reagan was fond of saying that the scariest sentence in the English language is, "I'm from the government, and I'm here to help." He also said that government is not the solution, government is the problem. Why should the federal government get involved in educating people about financial literacy?

a_v2.gifPromoting financial literacy is really about improving quality of life. It's about helping people take advantage of the wonderful opportunities that result from our country's strong economy. Certainly, if we can promote economic development for families and individuals through financial education, we can help raise the standard of living for entire communities, as well as our country as a whole.

All Americans should take advantage of the variety of resources and information to help them manage their money more effectively. The federal government has a role to play in educating Americans on how to access these resources, but this is a task we cannot accomplish alone. That is why we collaborate closely with the private sector and nonprofit and community-based organizations to deliver this important information, in addition to free resources like and (888) MyMoney. We will continue to work with our many partners at all levels to encourage economic development and opportunity for all Americans.

q_v2.gifYour office has done work to educate the unbanked -- people who don't have bank accounts or other ties to permanent financial institutions. These people use check-cashing services and payday lenders. Why should we care about the unbanked? What should be government's role in "banking the unbanked?" What should nonprofits, banks and schools do?

a_v2.gifThere's a saying, "It costs more to be poor." Individuals who operate outside of the financial mainstream don't always know all of their options and sometimes don't have a true sense of how to take that first step to exercise those financial options. They frequently face less secure, less convenient and more expensive alternatives to carrying out their everyday transactions.

Why should we care? Because, again, it's about opening doors for our citizens, improving quality of life and ensuring the continued strength of our economy. Recently, the Financial Literacy and Education Commission hosted the Southwest Regional Unbanked Conference in Edinburg, Texas. The conference -- the second in a series of conferences -- brought together the federal government, private industry, as well as nonprofit and community-based organizations, to address the challenges of reaching the unbanked. I have had the pleasure of attending these first two conferences, and they have been valuable in forging new partnerships and strengthening existing ones in order to help bring people into the financial mainstream. These conferences represent one in a series of calls to action outlined in the National Strategy at, and at the end of all the conferences, we anticipate having generated new ideas and innovative solutions to addressing this challenge.

q_v2.gifTalk about public schools. Nowadays they focus so tightly on the three Rs that students are graduating from high school without knowing how to balance a checkbook, or what the difference is between a certificate of deposit and a passbook savings account. What should public schools teach about personal finance? What should students know by, say, the end of fifth grade, eighth grade and 12th grade?

a_v2.gifWe always say more financial education is better than none. Research has shown that the earlier kids learn to develop good savings habits, the more likely they'll be to keep those same habits in the future.

Students in schools across the country have benefited from the integration of financial education into core curricula. Through integration, schools are able to meet their obligations to teach required courses while also exposing students to valuable financial education lessons. In this way, educators do not have to choose between financial education and other disciplines.

The National Strategy available at provides a chapter on how to incorporate financial education into K-12 curricula. It also offers models of successful programs and resources for schools and teachers who may want to develop similar programs.

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