How Effective is Financial Education? Unique Tool Provides Insight

Free Evaluation Resource Now Available Online

Date: October 21, 2009

Contact: Paul Golden 303-224-3514, [email protected]

GREENWOOD VILLAGE, COLORADO—Financial education programs in the research marketplace have proliferated in recent years. Yet, accessible ways to evaluate their effectiveness have not kept pace. Focusing on this challenge, the National Endowment for Financial Education (NEFE) provided a grant to a team of university researchers for creating a powerful assessment tool designed to help educators measure the success of their respective programs. The result of the collaboration led to the development of the NEFE Financial Education Evaluation ToolkitSM, an innovative resource that now is available online at no cost to users.

The toolkit has two components: a database, which allows users to quickly and conveniently customize an evaluation tailored to their financial education program; and a supplemental manual, assisting educators in designing a measurement tool and collecting and analyzing the resulting data. Equipped with this knowledge, instructors can improve their program’s effectiveness, provide accountability to stakeholders and even use program results to support funding requests.

In introducing the toolkit, Ted Beck, president and CEO of the Colorado-based National Endowment for Financial Education, said, “A financial education program without evaluation is like an explorer without a compass. Evaluation should be integrated into a program’s design from the beginning, yet research has found that a lack of understanding about how to measure a program’s impact, combined with limited time and resources, have prevented educators from giving the evaluation component the attention it deserves. The result is that we often do not know if education efforts are in fact improving consumers’ financial situation.”

The research Beck refers to was conducted in 2004 through a grant funded by NEFE to the University of Georgia. The study involved eight focus group sessions and a national online survey of financial professionals and educators. Participants said that the most common barriers associated with program evaluation included not having enough time, staff and financial resources; difficulty in motivating participants to complete an assessment; lack of existing evaluation materials and resources; and lack of attention paid to evaluating performance. The study participants also noted that an ideal evaluation tool should be flexible, adaptable, quick and easy to use and provide guidance on how to design a successful instrument, gather and study data and effectively present the results.

Using the study’s findings as a guide, a research team began work on an evaluation tool that would address each of the challenges identified to create an ideal instrument. During 2005 and 2006, the team developed an evaluation database and manual, and tested them with financial educators in Georgia. After modification, the Evaluation Toolkit was launched on the NEFE Web site. The program’s developers will introduce the tool over the next several months at training workshops and professional conferences across the nation.

With the free toolkit, educators can customize an evaluation by selecting various options. For example, they can choose a post-program evaluation only; pre- and post-evaluations; stages-to-change evaluations (i.e., document the process of behavior change over time); or train-the-trainer evaluation. In addition, educators can decide which aspects they want to assess, such as knowledge growth, increases in skills or confidence, actions taken and changes in financial behavior and/or financial position.

Users also can select, add or edit knowledge questions, behavior statements, open-ended questions to elicit qualitative information and demographic questions. In addition, the database spans a wide range of financial topics, which allows the evaluation tool to be tailored to subjects covered by many different education programs. Educators will find questions and statements on decision-making, cash-flow management, savings and investments, credit and debt management, homeownership and retirement, among others.

“We believe this is the most significant evaluation tool yet to be made available to the financial literacy community,” Beck says. “The toolkit’s flexible design allows it to be customized for different organizations, audiences and topics; and it can be used on a national, regional or local level. This is a huge step toward a more standardized, consistent approach to program evaluation, which ultimately will improve the outcome of financial education efforts.”

Koralalage S.U. Jayaratne, Ph.D., who at the time was the evaluation specialist in the Cooperative Extension Family and Consumer Sciences department at the University of Georgia and is currently the state leader for program evaluation and an assistant professor at North Carolina State University, led the research team. Other researchers included Angela Lyons, Ph.D., assistant professor, at the University of Illinois at Urbana-Champaign; Lance Palmer, Ph.D, CPA, assistant professor, at the University of Georgia; Jimmy Hansen, Cooperative Extension Service, at the University of Georgia; Pamela Turner, Ph.D., assistant professor, at the University of Georgia; Joan Koonce, Ph.D., associate professor, at the University of Georgia; Erik Scherpf, doctoral student, at the University of Illinois at Urbana-Champaign; and C.W. Copeland, doctoral student, at the University of Georgia.

To access the NEFE Financial Education Evaluation Toolkit, click here.



  • Paul Golden

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