In 2019, NEFE embarked on a strategic planning process to help us better focus on our resources. Throughout this course it became clear that the role of financial education and what it can realistically achieve is neither well-defined nor well-understood. We know that high-quality financial education is a powerful force for positive change. It builds knowledge, boosts confidence and is the cornerstone of better decision making. But financial education alone does not create financial well-being. It is one factor in a complex landscape of internal and external elements—some controlled by individuals and some not.
NEFE’s purpose in defining the ecosystem is to:
- Chart the foundations that underpin an individual’s level of financial well-being.
- Give context to the elements that comprise financial well-being.
- Rightsize expectations for what various educational and behavioral influences, interventions and efforts realistically can achieve.
Research is conducted throughout the ecosystem.
Assessment and evaluation are conducted on educational engagements.
*This is an evolving framework and is subject to change.
To help us better understand the role of financial education as it relates to financial well-being, and to begin defining terms in the field that are being used interchangeably, NEFE developed the Personal Finance Ecosystem. The goal of the ecosystem is to outline the interrelated landscape that impacts an individual’s financial circumstances. As the Personal Finance Ecosystem framework evolved, we realized its potential value to the field at large and began sharing it at various events. The current version of the ecosystem presented here is the product of thoughtful critique and insight from leaders and practitioners in our field.
It is our hope that the Personal Finance Ecosystem will help our field better define how we collectively can enhance Americans’ financial well-being. No one intervention can fix the problem, but each has an important role to play. NEFE’s primary focus in the ecosystem is one of the catalysts:
knowledge influencers, comprised of financial education and financial information. High-quality financial education and timely financial information can assist people with navigating the financial system as it exists, but we need clarity on what realistically can be achieved within these frameworks, insight into the factors that education alone cannot overcome.
NEFE seeks to be a catalyst for growth, along with impact and change for our field. Outlining this ecosystem is one of the many ways we seek to best serve our community.
* Your feedback on this framework is needed. Please send insights to [email protected]. This document will evolve as we incorporate additional response. Check www.nefe.org/PersonalFinanceEcosystem regularly for the latest version.
A more detailed explanation of the ecosystem, including expanded definitions of terminology, can be found at www.nefe.org/PersonalFinanceEcosystem. We look forward to sharing the results of our strategic planning process in the next issue of Digest.