Ann A. Berry and Jeanette A. Tucker
Financial security plays a major role in a person’s overall feeling of wellbeing and satisfaction. Anxiety about money affects how people feel about themselves, how they relate to others, their productivity at work and many other aspects of their everyday lives. Research suggests that personal financial stress negatively affects the productivity of 15 percent of workers, and one in six financially troubled employees is involved in a threat of violence in the workplace.
The Jump$tart Coalition for Personal Financial Literacy is a partnership comprising representatives from business, industry, government, education and nonprofit groups that seeks to improve the personal financial literacy of young adults. Its purpose is to assess the financial literacy of young adults and promote the teaching of personal finance in grades K-12.
A financially literate individual has the financial management knowledge and skills to budget, spend, use credit, save to function in everyday life. In a survey of the financial literacy of Louisiana high school seniors, which was conducted in 2004 through the Jump$tart program, the average score was only 46 percent. Louisiana is graduating too many students who are not financially literate – a deficiency that can affect them both personally and professionally throughout their lives. It is not surprising that more than 10 percent of working families have financial troubles, more than 60 percent of families live on 110 percent of their income, bankruptcies among people under 25 have more than doubled and colleges lose more students because of financial difficulty than academic failure.
To better prepare youth to become financially literate consumers and selfsufficient, productive members of the state’s workforce, legislation was enacted in 2004 requiring financial education in free enterprise classes in Louisiana schools. Research suggests that a minimum of 10 hours of financial education can positively affect the personal financial practices of students. This financial education could potentially save future employers money through increased worker productivity, reduced absenteeism and reduced human resource administrative costs. It can generate a positive return on every dollar or hour invested.
The LSU AgCenter has taken a proactive approach in preparing Louisiana’s young people to be financially literate. During the summer of 2004, extension family resource management faculty members conducted 18 six-hour teacher training sessions at 13 locations across the state. The AgCenter financial educators partnered with Louisiana Jump$tart, which provided $110 stipends to 191 participating free enterprise teachers who received in-depth training in saving, investing, money management, financial and career planning, insurance and credit.
The sessions included interactive, hands-on learning experiences. Such train-the-trainer programs yield a significant multiplier effect. The participants reported they would use information and resources learned at the workshops to teach more than 15,000 students during the 2004-2005 school year. A total of 407 teachers participated in training session during 2003 and 2004. These teachers indicate they will teach approximately 35,700 students annually (for an average of 91 students each).
The National Endowment for Financial Education’s High School Financial Planning Program (HSFPP) curriculum formed the basis of the program. Each participant received free a 400-page teacher manual and 100-page student workbook. The teachers were able to order sufficient quantities of student workbooks to provide a copy for every student they would teach. Teachers’ selfassessments of their preparation to teach financial management to high school students increased 36 percent.
To measure the effect of the teacher training initiative on students, pretests and post-tests along with scan sheets were provided for teachers to assess their students’ knowledge gained from the curriculum. The teachers were also given addressed envelopes for returning the tests to the AgCenter for analysis. Properly completed assessments were received from 1,704 students representing 25 high schools. Respondents included 789 males and 639 females.
Questions in the assessment tool were designed to measure students’ knowledge of principles of saving, investing, money management, budgeting, credit, insurance and the basics of financial and career planning.
Analysis of the student assessments showed an increase in overall knowledge gained, with mean scores increasing from 62.69 to 70.03. Male students scored higher on the pretest than female students; however, the overall knowledge gain of female students exceeded that of males.
Pretest scores were highest in financial planning (78.95), followed by career planning (72.12), budgeting (61.44), credit (63.28), insurance (54.11) and saving and investing (47.28).
Students posted the greatest knowledge gain in budgeting, a key skill for future financial success. Mean scores increased from 61.48 to 76.52. Scores measuring students’ knowledge about insurance followed with mean scores increasing from 54.11 to 63.45. Saving and investing scores increased from 47.28 to 55.36. Students posted lowest pre-test scores on this topic. Scores on the credit portion of the survey improved from 63.28 to 69.58. While knowledge relating to saving and investing and credit showed great improvement, the scores suggest additional emphasis should be given to these topics.
Less knowledge gain was measured in those topics that received the highest pre-test scores. For example, knowledge of career planning increased from 72.12 to 76.52. Scores on test questions measuring financial planning concepts showed minimal increase from 78.95 to 82.24. This suggests that students learned more about the topics in which they had little prior knowledge.
While research suggests that financial education begin as early as preschool and continue throughout the lifespan, this study indicates that tenth grade is the most effective level to incorporate this financial management curriculum. Tenth grade students posted the greatest knowledge gain (11.73 percent) and highest total scores of all groups (mean = 74.41).
Louisiana free enterprise classes are most often taught in tenth grade. This study suggests that tenth grade is the most appropriate level for instruction in the HSFPP curriculum. It also suggests that classroom instruction in this curriculum is most effective when targeted to students who are 15-16 years of age. Their scores increased over 10 percent.
A limitation of the study is that teachers did not report the number of hours devoted to financial management instruction or the teaching methods they employed. Future evaluations will study the impact of delivery methods used, as well as the number of classroom hours devoted to instruction using this curriculum. Evaluation of this AgCenter program reveals that instruction in the HSFPP curriculum increases students’ knowledge, thus preparing them to become financially literate consumers and self-sufficient, productive members of the state’s workforce.
Ann A. Berry, Assistant Professor, and Jeanette A. Tucker, Associate Professor, School of Human Ecology, LSU AgCenter, Baton Rouge, La.
(This article appeared in the fall 2005 issue of Louisiana Agriculture.)