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Lois A. Vitt, Founding Director

FINANCIAL LITERACY EDUCATION: Building Support for Sustainable Programs. Lois A. Vitt, Founding Director. Second Annual Financial Literacy Leadership Conference October 5, 2009, Washington, DC. What ISFS Does….

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Lois A. Vitt, Founding Director

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  1. FINANCIAL LITERACY EDUCATION: Building Support for Sustainable Programs Lois A. Vitt, Founding Director Second Annual Financial Literacy Leadership Conference October 5, 2009, Washington, DC

  2. 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

  3. Seven Components of Successful Financial Education Programs • Unambiguous Mission and Goals* • Targeted Outreach • Adequate Resources • Relevant Curriculum* • Commitment to Evaluation* • Program Accessibility • Dynamic Partnering

  4. *Unambiguous Mission and Goals • Debt elimination, money management, saving • Assessing risk tolerance, asset building, investing • Consumer/investor protection • Specific actions/behaviors: • Spending vs. saving decisions • Homeownership, financing • Increase 401(k) participation • Retirement planning

  5. 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

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

  7. 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

  8. Feelings when in financial control • Stress-free • More confident • Proud, happy • Blessed with options • Enjoy better personal relationships Source: MARMC Study, May 2007

  9. *Commitment to Evaluation • Requires advance planning. • Reflects the goals of all parties: • Program participants, students • Educators • Sponsors and funding organizations • Policymakers • Is measurable.

  10. Program Measures… • Performance Measures: were participants satisfied with the program? • Effectiveness Measures: did the education make a difference in the lives of participants? • Organizational Measures: have the sponsors and/or funding organizations achieved their objectives? • Policy Measures: does the education satisfy the goals of policymakers?

  11. 1. Performance Measures • Program growth. • Satisfaction measures: • Topics covered • Quality of instruction • Learning activities • Time and convenience • Length of instruction • Facilities

  12. 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.

  13. 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.

  14. Effectiveness Measures…cont’d. • Changes in awareness, knowledge, and attitudes can be ascertained from pre- and post-education forms. • Behavioral changes require follow upto 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?

  15. 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?

  16. 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.

  17. 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?

  18. Does Financial Education Work? • “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.”

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