personal finance and the rush to competence

234 Pages·2001·2.53 MB·English

PERSONAL FINANCE AND THE RUSH TO COMPETENCE:
Financial Literacy Education in the U.S.
Fannie Mae Foundation
4000 Wisconsin Avenue, NW
North Tower, Suite One
Washington, DC 20016-2804
[phone]
www.fanniemaefoundation.org
FMF C 122 © 2001 Fannie Mae Foundation. All rights reserved
PERSONAL FINANCE AND THE RUSH TO COMPETENCE: Financial Literacy Education in the U.S.
Personal Finance and the Rush to Competence:
Financial Literacy Education in the U.S.
Lois A. Vitt, Project Director
Carol Anderson, Jamie Kent, Deanna M. Lyter, Jurg K. Siegenthaler, Jeremy Ward
A National Field Study
Commissioned and Supported by
The Fannie Mae Foundation
ISFS
Institute for Socio-Financial Studies
14 S. Madison Street
PO Box 1824
Middleburg, Virginia · 20118
www.ISFS.org
ACKNOWLEDGMENTS
AND
DEDICATION

We are grateful to the Fannie Mae Foundation for conceptualizing and funding this study
and to Karen Murrell and Lopa Kolluri for their leadership and direction. Jenny Ward at
ISFS provided superb administrative and accounts management supervision and also
helped with the production of the matrix and various reports to the Foundation
throughout our project.
We appreciate the participation of every program manager, instructional designer,
educator and industry leader for helping us understand their financial literacy education
initiatives and for sharing with us their vision for the future of financial education.
Heartfelt thanks to program participants who told us their hopes and dreams and also of
life enhancing changes that followed their experiences in financial literacy education.
Special thanks to Joyce Adkins, Bill Arnone, Joe Bradley, Pat Brennan, Debbie Conover,
Tom Garman, Kathryn Garnett, Frances Graham, Sally Hass, Steve Herrmann, Tony
Jurney, Jim Laffargue, Steve McLamar, Gary Nederveld, Barbara O’Neill, Janet
Paulovich, Jane Schuchardt and Ike Templeton.

Behind every personal financial education program we studied, both large and small, we
found a champion (sometimes more than one) who strives passionately to help people
increase their financial knowledge and skills. These champions—because they have
observed the newly self-reliant—know that such persons can become better parents,
partners, employees, neighbors, community members and citizens. This study is
dedicated to these program champions and to the millions of Americans whose lives can
be uplifted when the language and management of their everyday personal financial
affairs becomes routinely comprehensible to them.
Institute for Socio-Financial Studies (ISFS) 2000
All Rights Reserved
Contents
Acknowledgments and Dedication .........................................................................i
Executive Summary..............................................................................................xi
Chapter One: Introduction..........................................................................................1
What Is Personal Financial Literacy?.....................................................................2
Financial Literacy Literature..................................................................................2
Financial Literacy Education .................................................................................3
Setting the Stage ....................................................................................................4
How Financial Literacy Education Programs Are Evolving ..................................5
Campaigns to Save, Invest, and Learn ..................................................................6
Objectives and Limitations of the Study ................................................................7
Organization of the Report.....................................................................................8
Chapter Two: Study Methods, Populations, and Program Characteristics 11
Study Purpose and Design ...................................................................................11
Critical Pathways Stages Model ..........................................................................12
Characteristics of the Sponsoring Organizations..................................................13
Survey Results – Program Characteristics ...........................................................14
Inception.........................................................................................................14
Needs Assessment ..........................................................................................14
Program Planning ...........................................................................................14
Rationale.........................................................................................................14
Scale, Participants, and Strategy .....................................................................14
Program Content, Pedagogy, and Delivery .....................................................15
Evaluation and Follow-up...............................................................................17
Multi-Sector and Special Purpose Programs........................................................18
Individual Development Accounts (IDAs)...........................................................21
Confidence, Gender, and Age .............................................................................23
Women’s Programs .............................................................................................24
Age ......................................................................................................................25
Homebuyer Programs and Financial Literacy......................................................25
Characteristics of Program Participants Interviewed ...........................................27
Chapter Three: Effective Personal Financial Literacy Education ...................29
When Is an Individual Financially Literate? ........................................................29
What Motivates People to Participate in Financial Literacy Education?..............29
Education, Self-Efficacy, and Attainable Goals...................................................31
Money Meanings, Culture, and Values in Financial Education ...........................32
Life Choices for Emerging Populations ...............................................................34
Attitude Changes and Action Steps......................................................................35
Effective Strategies and Notable Practices...........................................................35
Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S. iii
Program Challenges.............................................................................................36
Elements of an Effective Financial Literacy Education Program.........................36
1. Unambiguous Mission and Purpose ............................................................37
2. Targeted Outreach.......................................................................................38
3. Adequate Staffing and Administration.......................................................39
4. Successful Evaluation and Follow-up ........................................................39
5. Program Accessibility ................................................................................41
6. Relevant Curriculum..................................................................................42
7. Dynamic Partnering ...................................................................................43
Chapter Four: Workplace Financial Education ............................................... 45
Overview of Participating Workplace Programs..................................................45
Workplace Programs Study Findings.................................................... 47
Inception.........................................................................................................47
Needs Assessment ..........................................................................................47
Planning..........................................................................................................48
Purpose and Positioning..................................................................................48
Funding and Resources ...................................................................................48
Scale, Participants, and Strategy .....................................................................49
Program Content, Pedagogy, and Delivery .....................................................49
By-Products ....................................................................................................49
Evaluation.......................................................................................................49
General Observations......................................................................................50
Case Study: Weyerhaeuser Company..................................................... ...51
Case Study: United Parcel Service .......................................................... ...61
Chapter Five: Cooperative Extension Service (CES) Financial Education .. 69
CES Programs Study Findings............................................................ .. 70
Inception.........................................................................................................70
Needs Assessment ..........................................................................................70
Planning..........................................................................................................71
Purpose and Positioning..................................................................................71
Funding and Resources ...................................................................................71
Scale, Participants, and Strategy .....................................................................72
Program Content, Pedagogy, and Delivery .....................................................72
By-Products ....................................................................................................73
Evaluation.......................................................................................................73
General Observations......................................................................................73
Case Study: Rutgers Cooperative Extension ...............................................74
Case Study: Mississippi Housing Initiative ..................................................82
Chapter Six: Community-Based Financial Education .................................... 89
Community-Based Programs Study Findings .........................................90
iv Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S.
Inception.........................................................................................................90
Needs Assessment ..........................................................................................91
Planning..........................................................................................................91
Purpose and Positioning..................................................................................91
Funding and Resources ...................................................................................92
Scale, Participants, and Strategy .....................................................................92
Program Content, Pedagogy, and Delivery .....................................................93
By-Products ....................................................................................................93
Evaluation.......................................................................................................93
General Observations......................................................................................94
Case Study: International Institute of Boston ......................................... ...95
Chapter Seven: Faith-Based Financial Education .........................................105
Faith-Based Programs Study Findings
Inception.......................................................................................................106
Needs Assessment ........................................................................................107
Planning........................................................................................................107
Purpose and Positioning................................................................................107
Funding and Resources .................................................................................108
Scale, Participants, and Strategy ...................................................................108
Program Content, Pedagogy, and Delivery ...................................................108
By-Products ..................................................................................................108
Evaluation.....................................................................................................108
General Observations....................................................................................109
Case Study: MidAmerica Leadership Foundation....................................110
Chapter Eight: U.S. Military Financial Education..............................................117
U.S. Military Programs Study Findings ...................................................118
Inception.......................................................................................................118
Needs Assessment ........................................................................................118
Planning........................................................................................................119
Purpose and Positioning................................................................................119
Funding and Resources .................................................................................119
Scale, Participants, and Strategy ...................................................................119
Program Content, Pedagogy, and Delivery ...................................................120
By-Products ..................................................................................................120
Evaluation.....................................................................................................120
General Observations....................................................................................120
Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S. v
Chapter Nine: Community College Financial Education.................................121
Community College Program Study Findings .......................................122
Inception.......................................................................................................122
Needs Assessment ........................................................................................122
Planning........................................................................................................122
Purpose and Positioning................................................................................122
Funding and Resources .................................................................................123
Scale, Participants and Strategy ....................................................................123
Program Content, Pedagogy, and Delivery ...................................................123
Evaluation.....................................................................................................123
General Observations....................................................................................124
Chapter Ten: The Internet.......................................................................................125
Overview ...........................................................................................................125
Internet Sites......................................................................................................129
Chapter Eleven: American Dream Sequencing:
Issues and Ideas for Program Managers, Educators, and Policymakers ...133
Financial Education in the Workplace ...............................................................134
Financial Education in the Community..............................................................135
Financial Education Topics and Teaching Materials..........................................136
Socioculturally Sensitive Teaching Methods .....................................................137
Life Planning Education Approaches for Pre-Retirement ..................................138
Financial Education for Later Life.....................................................................138
High-Tech Teaching Methods ...........................................................................139
Financial Literacy is a Two-Dimensional Concept ............................................140
Financial Literacy and Renewed Opportunity....................................................141
Appendix A: Financial Education Programs Matrices....................................145
A-1. Workplace Financial Education Matrix ....................................................145
A-2. CES Financial Education Program Matrix................................................154
A-3. Community-Based Financial Education Programs Matrix ........................167
A-4. Faith-Based Financial Education Programs Matrix...................................182
A-5. U.S. Military Financial Education Programs Matrix.................................186
A-6. Community College Financial Education Programs Matrix......................188
Appendix B: Survey Instrument............................................................................193
Appendix C: Matrix of Program Content, Delivery and Evaluations............201
Appendix D: About the Institute for Socio-Financial Studies (ISFS)............207
Appendix E: About the Authors .......................................................................209
vi Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S.
List of Figures and Tables
Figures
Figure 2-1. Financial Literacy Education Program Sectors ......................................... 11
Figure 2-2. Topics Covered in Programs..................................................................... 14
Figure 2-3. Course Delivery ........................................................................................ 15
Figure 2-4. Course Evaluation..................................................................................... 16
Tables
Table 2-1. Overview of Multi-Sector Elements in Programs...................................... 17
Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S. vii