Five Key Factors for Effective Financial Education

  1. Well-trained Educator (and/or tested e-learning protocol)
  2. Simply integrating personal finance topics into a learning environment is not enough. The educator needs to be confident, competent, and knowledgeable about the topic of personal finance in order to create a learning environment that is ideal for student-learning. Educators attain this proficiency by attending college-level courses and/or post-certification workshops that have been evaluated to demonstrate impact in increasing instructor effectiveness. Fundamentally, educators should demonstrate high levels of understanding—both with the content and the pedagogy—of the topics that espouse the tenets of financial capability.

  3. Vetted/Evaluated Program Materials
  4. The content and program materials (e.g., classroom activities, topics, examples, and assignments) should be created with the consultation of field experts (e.g., insurance agents and financial planners) and tested to be appropriate for the audience for which instruction is being implemented. For example, all instructional materials should include correct and up-to-date information, be guided by complex learning outcomes and objectives that are age appropriate, and tested to be impactful by external evaluators.

  5. Timely Instruction
  6. Program goals, instructional tools, and instruction topics should link to decisions that learners are readily able to make. If the topics cover concepts that are many years away from the capability of those participating in the instruction, alternative examples should be instituted which convey similar concepts, but that can be relatable to a near-term decision or implementation. This concept is especially true if the program has a limited time of exposure to convey the content. For instance, using a considerable amount of time focusing on mortgages, when the learners are 16, may be less effective than covering borrowing (using examples like student loans or automobiles) and highlighting the planning process associated with attaining secured debt. In addition, learners should have access to program materials beyond any formal instruction to allow the opportunity for utilization of content and exercises at times that are opportune.

  7. Relevant Subject Matter
  8. As with timely instruction, relevant subject matter is essential in not only engagement with the content, but also in the prospect of impacting behavior. If learners are unable to relate to the topics, examples, and content, then the level of engagement the instructor seeks will not be achieved. Consider young adult learners who are attending a free community money management workshop who mostly have jobs that do not offer 401(k) or 403(b) savings plans. Without an understanding of the audience and the context, an instructor may focus their presentation examples of saving on the need for diversified mutual-funds instead of conveying the same concepts by discussing saving, having an emergency plan, and explaining the difference between savings accounts, CDs and ROTH IRAs.

  9. Evidence of Impact (Evaluation)
  10. Continuously seek information on the impact of a program. Well-designed evaluations, which can be managed internally or by an external party, tell educators where they are having impact on behavior, knowledge and/or confidence, where students are engaged, and where improvements need to be made. Without evaluation, instructors rely on anecdotes to inform their work, where a more robust assessment can show where immediate improvements can be made and which areas of success can be capitalized.

Click here for a PDF version of the key factors.