Financial education plays an important role in guiding individuals to achieve their financial goals and contribute to the economic well-being of society as a whole. While the examination on the effectiveness of financial education has many factors to consider, the National Endowment for Financial Education (NEFE) has taken measures to improve evaluation studies—both for the practitioner and the researcher. These actions include the conception of two documents what will assist in guiding practitioners and researchers in planning high-quality evaluations. The first is the Financial Education Evaluation Manual that is designed to support the evaluation of financial education programs by helping educators to understand the purpose and goals of evaluation, and to provide a basic understanding of the evaluation process. This information is designed for program managers, educators, and decision-makers, in traditional school settings or community-based programs/non-profit organizations, who are implementing financial education programs. The manual is organized around four sections:
Section 1. Introduction to Evaluation
Section 2. Planning: Preparing for the Evaluation of Financial Education Projects & Programs
Section 3. Implementing: Financial Education Evaluation Design & Data Collection
Section 4. Utilizing: Evaluation Data Use & Continuous Quality Improvement
The Evaluation Manual is paired with the NEFE Financial Education Evaluation Toolkit—an online assessment management tool.
The second document is this Evaluation White Paper, written with the premise that future studies and program evaluations need improvement and that studies and evaluations can be improved by drawing on the research that has demonstrated effectiveness. Enhancing educational interventions is imperative; with better measurement, as well as improved interventions, the effect of financial education can be more clearly documented within research literature and within the field of practice. Specifically, the improvement in measurement needs to be embraced by both researchers and practitioners who evaluate their programs; more robust research protocols will provide more accurate assessments of the classes, workshops, and counseling sessions that are providing financial education (Hensley, 2015). As such, with better data, the outcomes and program goals can be more precisely assessed.
Continuously seeking information on the impact of a program or educational session is imperative. Well-designed evaluations tell educators whether and how they are improving behavior, knowledge, and confidence, and where improvements need to be made. Without evaluation, or by using ineffective tools without considering the factors that influence outcomes, instructors rely on anecdotes to inform their work and evaluators miss opportunities to measure multiple facets of a program. A more robust assessment can show where immediate improvements can be made and which areas of success can be capitalized. By clearly presenting several of the key research studies, this white paper seeks to provide a minimum research and evaluation standard. While this paper is not a comprehensive answer to the obstacles faced by financial educators, it is a clear platform from which to begin a deeper and more impactful discussion on the effectiveness of the collective work of the field.
Billy J Hensley, Ph.D.
Senior Director of Education
National Endowment for Financial Education