Lois A. Vitt, Founding Director FINANCIAL LITERACY EDUCATION: Building Support for Sustainable Programs Second Annual Financial Literacy Leadership Conference.

Lois A. Vitt, Founding Director

FINANCIAL LITERACY EDUCATION:Building Support for Sustainable Programs

Second Annual Financial Literacy Leadership Conference October 5, 2009, Washington, DC

What ISFS Does…

• Evaluates financial and investor education in all societal sectors: youth, adult, corporate, military, community, faith organizations.

• Benchmarks programs to identify and help educators replicate best practices.

• Assesses whether the education program works for all parties involved.

• Program participants

• Educators

• Funding organizations

• Policymakers

Seven Components of Successful Financial Education Programs

1. Unambiguous Mission and Goals*

2. Targeted Outreach

3. Adequate Resources

4. Relevant Curriculum*

5. Commitment to Evaluation*

6. Program Accessibility

7. Dynamic Partnering

*Unambiguous Mission and Goals

1. Debt elimination, money management, saving

2. Assessing risk tolerance, asset building, investing

3. Consumer/investor protection

4. Specific actions/behaviors:• Spending vs. saving decisions• Homeownership, financing• Increase 401(k) participation• Retirement planning

High Touch - High Tech Curriculum is Most Effective

Successful content goes beyond financial

factors:

• Employ a familiar frame of reference

• Hands-on, realistic, problem solving

• Teach how to access resources

• Encourage shared feelings, beliefs, attitudes

• Discuss contexts

Source: Research grant funded by the National Endowment for Financial Education (NEFE) 2007-2008.

Feelings in Poor Financial Circumstances

• Trapped, caged

• Depressed, lacking motivation

• Angry and frustrated

• Afraid (to invest, to seek help)

• Hopeless (things will never change)

• Out of control

Source: MARMC Study, May 2007

Feelings when in financial control

• Stress-free

• More confident

• Proud, happy

• Blessed with options

• Enjoy better personal relationships

Source: MARMC Study, May 2007

*Commitment to Evaluation

1. Requires advance planning.

2. Reflects the goals of all parties:

• Program participants, students• Educators • Sponsors and funding organizations• Policymakers

3. Is measurable.

Program Measures…

1. Performance Measures: were participants satisfied with the program?

2. Effectiveness Measures: did the education make a difference in the lives of participants?

3. Organizational Measures: have the sponsors and/or funding organizations achieved their objectives?

4. Policy Measures: does the education satisfy the goals of policymakers?

1. Performance Measures

• Program growth.

• Satisfaction measures: Topics covered Quality of instruction Learning activities Time and convenience Length of instruction Facilities

Performance Measures…cont’d.

Gathered from participants on post-educational evaluation forms.

Are additive: they can be accumulated from course to course.

Can be compared.

2. Effectiveness Measures

• Cognitive changes: awareness, knowledge, attitudes, and values.

• Behavioral changes we want are actions: spend less, save more, eliminate debt, invest in 401(k), make risk adjustments in portfolio mix.

• Objective changes are proof of behavioral changes: increases and decreases in accounts, portfolio mix, net worth.

Effectiveness Measures…cont’d.

• Changes in awareness, knowledge, and attitudes can be ascertained from pre- and post-education forms.

• Behavioral changes require follow up to learn whether intentions were turned into action: debt elimination, saving, investing, changes in portfolio?

• Objective increases and decreases in financial accounts, portfolio mix, net worth. How will data be gathered?

3. Organization’s Evaluation Goals

• Did the program fulfill the goals of the education sponsoring organization?

• Have the objectives of the funding organization (if different) been met as well?

• What about policy?

Evaluation Methods

• On-going, not one-time effort

• Subjective, objective measures:• Logic Modeling or Framework: Input—

Output—Impact.• “Chaining” short-term, intermediate-and

long-term outcomes.• Trust your data sources and intuition.• Have your work reviewed by others.• Find resources to help you plan your

evaluation.

4. Policy Measures

• Macro level economic indicators?• Wealth loss, home loss, job loss?• Corporate sensitivity or legislation?• Increasing retirement readiness?• Debt/saving rates of populations?• Well-being indicators?• Research: what works, what doesn’t?

•“I increased my savings $250 a month.”

•“Yes, I changed… I invest in my company 401(k) Plan now.”

•“Now that I see where I need to be, then I can change my investment strategy and add to plan contribution each pay period.”

Does Financial Education Work?