Evaluation White Paper


Financial education is benefiting from a time of national attention, particularly since the recent recession. Educators, researchers, and the wider community are rallying around the idea that financial education plays an important role in giving individuals the tools with which to better navigate their financial lives. It is a natural extension, then, to focus on transmitting financial knowledge within the school environment. Doing so provides some measure of confidence that accurate information is being conveyed. It also provides more widespread coverage than solely relying on parents to teach financial literacy to their children.

Within schools, beginning financial education in the elementary grades is important. First, young children have experiences with finances through the receipt of allowances, gifts, and payment for chores. Second, they can be aware of not only their own financial transactions, but also those of their parents. Third, financial education is (or can be) closely tied to numeracy, allowing early math lessons to be contextualized in a way that heightens interest in a core subject, but also imparts financial concepts. Finally, to the extent that financial education is included in a broader umbrella of teaching children the tools with which to evaluate options—good decision-making—beginning this focus in elementary school makes sense for cognitive development. Financial education can be taught in the same way as other academic subjects: establishing foundational knowledge and abilities early and adding incremental skills as children progress. Financial education also should be provided for children to prepare students for high school instruction, as is the case for most academic subjects such as math, science, and history. The instructional model for financial education can and should follow the same cognitive progression from elementary to high school.

1A. Key Programs and Resources

Several resources support the delivery of financial education in the elementary grades. One of the best and most extensive sources of material for this age range comes from the Federal Reserve Bank of St. Louis. This website contains both economic and financial education resources, searchable by grade, concept, resource type, and more. Their education specialists have particular expertise in combining economic and financial education with children’s literature, so most of the resources for the elementary classroom center on this integration. Not surprisingly, the role of the Federal Reserve plays a prominent part in these lessons, particularly at the upper elementary level. Most of the lessons are also interactive white board ready. In addition to traditional classroom lessons, this site also has multimedia resources, power point slides, and resources for teachers or parents to teach the concepts. The other Federal Reserve Banks are engaged in economic education as well and have a wealth of resources available.

Another resource is EconEdLink, a site maintained by the Council for Economic Education (CEE). The CEE is a national nonprofit organization whose mission is to provide economic and financial education to kindergarten through twelfth grade (K-12) students and educators. The CEE oversees a network of state councils and local centers in each state that provide teacher training, educational resources, and direct-to-student programming. EconEdLink is a compilation of resources searchable by type, grade, concept, and other categories. These resources are developed and vetted by classroom teachers and other professionals (such as staff members of the state councils and local centers). Lessons are also reviewed and rated by EconEdLink users, so visitors to the site can quickly find popular lessons for every grade and application.

Other websites offer a wealth of financial education resources. Northwestern Mutual Insurance provides content with The Mint that should not be confused with Mint.com, a personal finance website for adults. The Mint has resources for children of all ages, parents, and teachers. There are online tools and an app to help children budget and plan. Wells Fargo’s Hands on Banking has content for several constituencies, including an alien named Zing who guides fourth and fifth graders through the intricacies of spending and saving. Edutopia is a teacher sharing site with lists of financial education resources from other sources, along with more general classroom management, assessment, and pedagogy content. Similarly, MoneyTeach is a teacher resource site focused solely on financial education programs and tools.

Money as You Grow was developed by Beth Kobliner, a member of the President’s Advisory Council on Financial Capability. It offers age-segmented activities for teachers as well as “conversation starters” for parents to begin instilling financial education at an early age (beginning at age 3). A companion to this resource is Math That Makes Cents. This resource was developed by The Math Forum at Drexel University and the Economics Center at the University of Cincinnati to provide lessons that integrate math and financial literacy concepts for grades 3-8. These are worksheets rather than the longer lessons and activities found on some of the other sites, suitable for math instruction within a financial education context.

The National Education Association has devoted part of its website to financial education resources. Many of the lessons at this site are correlated to the national math standards. Practical Money Skills for Life also has lessons plans, activities, and games for students from kindergarten through college. The U.S. Mint offers a range of lessons, not surprisingly, focused on coin recognition, but also includes creative integrations of history, math, and basic decision-making.

Finally, while the above resources are a compendia of individual lessons, activities, or other content, a digital platform called $martPath is a comprehensive curriculum program for grades one through six that was developed for the Economics Center at the University of Cincinnati. Each grade level consists of four lessons that correlate to state and national standards in economics, financial literacy, math, and English/language arts. Each grade consists of an overarching story that is told through animated videos and punctuated with in-class activities and interactive games. Although it is a digital platform, it is designed for teachers (or parents) to use as a group experience (as opposed to individual interaction).

1B. Major Topics and Literature Review

Elementary students are certainly participants in the economy, and they are involved with financial decision-making—both their own and, by observation and influence, that of their parents. So the issue of financial education is not one of if it should be included in the elementary classroom. Instead, it is first a question of what are its goals, and second a question of how is it delivered?

Narrowly defining financial literacy to be the ability to perform rudimentary skills, such as balancing a checkbook, for example, or as a vocabulary list significantly restricts the opportunities that exist in the elementary classroom. This treatment does a disservice to the subject and to students. Instead, we could expand our common understanding of what financial education is—critical thinking within a larger ability to develop decision-making skills by understanding cost and benefit analysis and recognizing opportunity costs. Teaching financial literacy can be thought of in the same way as teaching reading literacy: starting with the ABCs, creating age-appropriate, foundational knowledge that is built upon year after year with increasing complexities.

All of this work gets to the crux of the issue—if elementary financial education continues to be defined in a rudimentary way, then its role in providing foundational knowledge for additional complexity in later grades is significantly curtailed. Teaching children to become financially literate involves more than the one-time imparting of a set of skills or knowledge. It requires shaping behavior, molding responsible attitudes toward choices, and developing critical thinking. If financial education is not provided to students in elementary school it makes later instruction in high school more difficult than it needs to be. If, however, financial education for children provides the framework for the development of decision-making skills in a variety of contexts, then specific, real-world applications have a more solid basis, and students will have formed positive attitudes that, hopefully, will lead to increased financial capability in later life.

Which leads to the second question—how should this broader conceptualization of financial literacy be delivered? Although most states have financial education threads woven in (primarily) the social studies curriculum, without a well-defined mechanism for the delivery of financial education in the elementary grades, it is often a rather murky enterprise. Further, the majority of elementary teachers, particularly at the lower elementary level, are generalists. That is, they are responsible for teaching the full complement of academic subjects, as opposed to specializing in one area. As generalists, elementary teachers are less likely to have taken a course in economics or financial education during their own education than middle or high school teachers whose educations include these focused areas. As a result, financial education competes for valuable class time when high-stakes testing results are increasingly becoming the currency used to assign a value to the educational experience.

A cursory look at the resources referenced above suggests a solution. Both as a matter of expediency and appropriate modeling, focusing on integration of financial education into the core curriculum offers a path forward. As generalists, teachers are likely to be more comfortable with delivering financial education if it is embedded in more familiar subjects (Way & Holden, 2009). If the definition of financial education is expanded to include the development of decision-making skills, then modeling those skills in a variety of contexts and academic disciplines provides more opportunities to understand real-world behaviors.

Presenting financial education in the elementary grades in an embedded manner may constitute a compelling narrative. But researchers do not live in a narrative space. Researchers struggle with constructing experimental designs that will have the most validity and specifying models that are the most robust. And the research on elementary financial education is not as clear-cut as the narrative would imply.

While more and more rigorous analyses are being conducted—using an experimental design with control and treatment groups, ensuring that consistent curriculum and delivery are maintained, using reliable and valid assessments—research on the efficacy of elementary financial education is not as plentiful as for other groups.

A particularly useful place to start a research overview is the framework that was developed by Collins and Odders-White (2015). Their three-part conceptualization of financial education research facilitates comparisons and commonality among analyses by articulating the mechanisms, the immediate outcomes, and the impact (intermediate and longer-term) of programs. The authors invite researchers in this area to be explicit in their articulation of intended cognitive acquisition, to clearly identify those immediate changes in knowledge and/or attitudes that could proxy longer-term behavioral changes, and finally, to be mindful of what success means in terms of longer-term behaviors. The authors make the compelling case for greater understanding of the linkages between early financial education and later financial capability.

Using a control and treatment design, Batty, Collins, and Odders-White (2015) examined the efficacy of Financial Fitness for Life (FFFL). It consists of lessons clustered within four grade bands: K-2, 3-5, 6-8, and 9-12. This study involved students in grades 4 and 5 in Wisconsin. Students received lessons in five 45-minute sessions (one per week). The lessons focused on savings, money management, and decision-making. The teachers were trained on the curriculum in the same way and they utilized the same materials, including the assessment instrument. Classrooms of students were randomly assigned to control or treatment groups, with control classrooms receiving the financial education instruction after the study was completed. The study was conducted over the course of two academic years. The fifth graders in the second year did not receive the lessons again (they had received them the year before in the fourth grade), but they were assessed to see if knowledge had depreciated. After only five weekly lessons, students in the treatment group had significantly higher scores than those in the control group, a result that persisted with the addition of other variables controlling for student, school, and parent characteristics. The study found no statistically significant change in student attitudes on most of the measures, except when the second year of data was included. In this case, attitudes were positively affected by the intervention, and financial knowledge persisted over time. The intervention was also linked to positive behavior (i.e., savings). This research is important because it utilized “best-in-class” methodologies, as well as a longitudinal component.

The effect of sound curriculum is seen in another study using the FFFL materials with students in elementary school (grades 3-5) middle school (grades 7-8) and high school (grades 9-12). Harter and Harter (2009) found significant improvements in tests of financial knowledge as a result of economically disadvantaged students in eastern Kentucky receiving the FFFL materials at all three education levels. Again, using a control and treatment design and similarly trained teachers, the authors found significant differences between the posttest and pretest scores of the students in the treatment group. They also found significantly greater gains between the post-test scores among those students who had received FFFL and another financial literacy curriculum.

Again, using the FFFL curriculum, Chen and Heath (2012) found that elementary students (grades 3-5) and middle school students (grades 6-8) made significant gains in financial knowledge from instruction in financial education using 16 lessons. In this study, teachers were trained during the same timeframe by the same instructor using the same materials. This study was not an explicit treatment/control design. The advantage of having a control group is that a “trend” (difference between control group’s pre- and post-test scores) can be identified and subtracted from the “gross” effect of the program for the treatment group. The remaining effect represents the net contribution of the program, absent any common, external influence on levels of financial knowledge. But since both elementary and middle school students were included in the analysis, a proxy for that trend exists—the difference between middle pre-score and elementary pre-score. This difference indicates the change in financial knowledge absent any financial literacy instruction over what is, on average, a three-year time period (age difference of middle and elementary student). The assessments given to elementary and middle school students varied only in the level of the language—the same concepts were covered in each. Since the difference in pre-scores for the two groups was statistically the same, the authors assumed that a trend was nonexistent, and that the results were attributable to the program. As with the other cited studies, all students experienced significant gains from financial instruction, with the most significant among disadvantaged students. Teacher attitude (belief that teaching financial literacy is important) was also found to be a significant determinant of student gains in knowledge.

Given the increasing recognition that experiential learning is an important component of all student learning, but particularly as it relates to financial education, examining the efficacy of school-based programs can add an important facet to discussions of elementary financial education. Sherraden et al. (2010) used a quasi-experimental design to assess the effectiveness of a school-based financial education and savings program (I Can Save). This program exposed elementary students to financial literacy lessons from either FFFL or Wise Pockets World. Children also were provided incentives for opening and contributing to savings accounts in the form of seed money and dollar-for-dollar matches for deposits. This comprehensive program also included after-school clubs and parental engagement. The results indicated that students who received the treatment scored significantly higher on tests of financial knowledge and showed significant differences in financial capability via savings behavior.

1C. Evaluation Practices, Strengths and Limitations

As with all other types of program evaluation research, many analyses that focus on the efficacy of financial education in the elementary grades suffer from inconsistent methodologies: lack of a control and treatment design, short length of treatment and lack of standardization of treatment, lack of explicit standards, small sample sizes, and a struggle with what financial literacy means when applied to elementary-aged children. From the studies cited above, however, it is clear that when empirical structures are carefully created and applied, financial education in the elementary grades is successful in increasing student knowledge and—at least—short-term behavior. These results certainly indicate that much more can and should be done to better understand financial education in these early years.

Paradoxically, the characteristic of elementary financial education that makes it so amenable to adoption—its ability to be integrated into other core academic subjects—also makes it difficult to evaluate and measure all outcomes. For example, financial education may affect math scores in addition to the anticipated effect on the increase in financial knowledge. Also, if we more broadly define financial education, particularly at the lower grades, as good decision-making, how do we measure its acquisition with the same sort of rigor and attention to empirical modeling that we afford a more narrow definition?

1D. Public Communication

There are opportunities and challenges for financial education for children and in elementary schools. This financial education makes sense because it serves as the foundation for later education in middle school or high school, just as early instruction provides the foundation for later instruction in major academic subjects in the school curriculum. Financial education can be embedded within and effectively taught in these other subjects. It can be delivered in a cross-curricular way by teachers who are generalists and thus in the best position to model good decision-making in a variety of contexts and with different content.

This infusion or seamless integration, however, makes it challenging to isolate the effects of financial education. Although the most rigorous experimental designs and most robust empirical approaches can be applied in a study, it is still possible to miss the important effects that financial education can have—effects and behaviors not easily measured by tests or other measures.