Does Financial Education Really Help Consumers?
Duval County social service agencies, financial institutions, governmental agencies, and educational entities – including the UF|IFAS Duval County Extension Service - joined forces in 2002 as the Real Sense Prosperity Campaign to improve the financial wellness of Jacksonville’s residents. The social marketing message Make One Smart Move with Your Money begins with “take a free financial class.”
The Duval County Extension service has been a leader in providing workshops taught by its agent and trained volunteers using curricula and content developed by the Extension, the University of Florida and the Federal Deposit Insurance Corporation.
The Research Project
Knowledge-gain assessments after each workshop indicate that participants are increasing their knowledge of budgeting, saving, credit use, and financial accounts. In 2010, the financial ed committee of Real Sense developed a research project to determine if their workshop participants were retaining key skills needed for financial health and converting knowledge to behaviors. At the request of the committee representative from Bank of America, Ulrich Research Services, Inc. donated the resources to compile and analyze the results of the day-of-class and six-month follow-up surveys.
The results indicated significant positive change in all seven of the indicators.
- Have an open checking account
- Have an open savings account
- Have a written budget
- Pay bills on time
- Checked credit report in the last year
- Decreased debt in the last 6 months
- Incurred overdraft fees in the last 6 months
See the chart below for the details. Participants also significantly improved confidence in their ability to manage their personal finances from an average of 6.5 in the day-of-class survey to an average of 7.6 (on a 10-point scale) in the follow-up survey.
Why These Changes Help
Positive changes in these key behavioral indicators lead to greater financial stability for consumers. A written budget is the most important financial behavior of good money managers. Budgeting leads to the ability to pay bills on time which helps individuals and families avoid late fees and disconnects. Individuals who have checking and savings accounts are more likely to avoid predatory or higher-priced financial products. Ordering and reviewing credit reports periodically increases the likelihood that errors will be detected that might adversely affect credit standing needed for home ownership and transportation loans, as well as getting and maintaining a job, apartment, and financial accounts.
Financial Education CAN help individuals and families improve their financial security!