Spain’s Economy May Be a Mess — but It Can Teach the U.S. About Financial Literacy

A nation at the heart of the global debt crisis has a financial-education strategy focused on schoolkids. I speak with one of the architects of the plan in Madrid, where a new four-year plan is in development

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Angel Navarrete / Bloomberg / Getty Images

A Spanish national flag flies above the Madrid Stock Exchange in Madrid on April 11, 2012

MADRID–It’s all about the kids there.

That summarizes Spain’s four-year national strategy for financial literacy, which is in the final stages of development and will steer the nation through 2016. This student-centric approach is embraced by much of Europe and stands in contrast to the U.S. strategy, in which reaching students is also a goal but getting to adults at work and advising consumers at the point of sale are a rising priority.

“They are important,” Gloria Caballero Núñez, deputy director of research at the National Securities Market Commission, an agency much like the Securities and Exchange Commission in the U.S., says of schoolkids. “They are the investors and consumers of the future.” Núñez is one of the leaders of Spain’s financial-education campaign. We spoke in her office for more than an hour, and I came away impressed with her passion for the cause and Spain’s commitment to what is a fairly new initiative.

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Spain is one of 36 countries with a formal strategy for raising the financial IQ of its citizens, having adopted its first plan in 2008. The program has roots in the aftermath of the Internet bubble in 2002, when educating investors about things like risk and diversification was the mission. The housing collapse, which was every bit as devastating as the one in the U.S., broadened the focus to mortgages and all sorts of “family debt.” Now, with austerity measures tied to the euro crisis, Spain has a well-rounded personal-finance-education program that includes budgeting, saving, retirement planning and general consumer banking.

The country is at the epicenter of the euro crisis. As Spain struggles to repay its crushing national debt, its people have been thrust into a financial twilight zone. Things that used to be cheap or free, like medical care, education, electricity and transportation cost more each month. Taxes keep going up too and, as one hotel employee told me, “This isn’t just words; you have to pay.”

Subway fares go up regularly, and the trains don’t run as often. Park fountains get shut down at night, and some restaurants have begun charging for a glass of water with your meal. Jobs are scarce and public pensions are in trouble as well, and there is a broad fear that this will go on for another decade and even then entitlements will never return to close to what they once were.

With that backdrop, the government is committed to helping people learn to fend for themselves. It has created a website ( with all sorts of financial and consumer information — similar to the U.S.-sponsored There is a separate website for students cleverly named, a play on the navigation system GPS.

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Spaniards are conservative by nature. In a 2002 Bank of Spain survey, 75% said they had “a total aversion to risk.” But they were sucked into the housing boom nonetheless and with their temporary housing wealth began to invest in financial products they knew nothing about.

“What we had was a crisis of values,” says Núñez. “Everyone acted like they were rich. Now they are more aware. They need to think before they buy.”

This experience should resonate with Americans who behaved much the same way before the financial meltdown. Since then, the U.S. too has adopted a national strategy for financial literacy, headed by the Treasury Department. But whereas in the States we have a vigorous debate about where and how to deliver financial education, and whether it even works, in Spain they have virtually unanimous buy-in, says Núñez.

“We know it’s a difficult and long-term objective,” she says. “But we are moving step by step.” That means focusing on students, and this year shapes up as critical. A pilot program that started with 14- and 15-year-olds at 32 schools in 2010–11 has expanded to 200 schools this year and will be evaluated next June. The Ministry of Education will then consider whether to make personal finance a requirement for high school graduation.

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If Spain makes that commitment it will leapfrog most nations in this regard, including the U.S. where the Department of Education has no plans to push for mandatory classes in personal finance or economics. School curriculums are the province of each state, and only 14 require that a personal-finance course even be offered while just four require a stand-alone, semester-long course for graduation. Just 11 countries currently have an economics or personal-finance requirement in at least some schools, according to the Organisation for Economic Co-operation and Development.

Why should Americans care what’s going on in Spain? The financial-education movement is a modern global phenomenon. No one knows for sure what works best and how to reach individuals with the information they need to make smart money decisions. Different nations are trying different approaches, and all of them can learn.

In Spain, they hope to reach all age groups but see getting to students with money basics as the long-term fix. In the U.S., students are on the radar for sure — but a rising emphasis is on helping adults by requiring simpler financial statements and products, providing closer regulatory oversight and creating online tools that will offer third-party advice at the point of sale.

Simpler products and timely impartial advice are fine. Let’s do it. But those are stopgap fixes. Empowering young adults to be confident about money — to be financially literate, just as they learn to read and write — is the right approach. Maybe we’ll learn something from a country at the center of the euro crisis.

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