Research and Best Practices in Financial Literacy

Knowledge Pay$ Off Readers, if you are looking for research on best practices to share with parents and administrators, or to use to foster economic and financial education in your classroom, consider these research findings compiled by CFED, a “multi-faceted” enterprise dedicated to “working on the local, state and national level to promote economic opportunity to alleviate poverty”.1  CFED in partnership with CFS, the Center for Financial Security, conducted a 2 year study (2011-2013) with elementary teachers and students in two school districts, one located in Texas, and one in Wisconsin.2  What they found is that elementary students that took part in a more “hands-on approach” to financial literacy tended to exhibit positive attitudes towards saving; even with a minimum of five hours of direct financial literacy instruction.3 This hands-on approach involved partnering with local area banks to establish an in-school banking program coupled with at least five hours of financial education instruction.4  Study findings also indicate that students with in-school banking programs were also more likely to establish a savings account verses students without in-school access.5

Additionally, in Amarillo, Texas, Happy Bank State Bank, in partnership with the Amarillo School System, not only offered in-school based banks for elementary students, but also conducted a study where they randomly selected students to receive $25.00 in seed money to further entice the opening of student savings accounts.6 Study findings indicate that students with seed money incentives were 18% more likely to open an account.7  Additionally, school-wide marketing efforts geared towards fostering parent engagement were also found to support the establishment of savings accounts.8 What is particularly relevant about this study is that a significant percentage of the school population met the “economically disadvantaged” criteria for “free and reduced lunch”.8

CFED also routinely reviews other financial literacy research to compile “empirical evidence” to foster best practices in financial literacy education. Their latest review reiterated that children are more likely to exhibit positive financial behaviors later in life if they have received financial literacy instruction and participated in school bank savings programs.9

Additionally, children from low to moderate income families that had savings accounts established at a young age for college were also more likely to plan, save, and enroll in college; especially those kids in a matched savings program.10This information suggests that partnering with local banks and credit institutions to complement economic and financial curricula may enhance student knowledge retention and their long-term financial well-being.

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2 Ibid.

3 Ibid.

4 Ibid.

5 Ibid.

6 Ibid.

7 Ibid.

8 Ibid.

10 Ibid.