By Shankar, Vivek
American Banker , Vol. 169, No. 209
Though the federal government, banks, schools, and many others are trying to teach Americans about their finances, few data are collected on the effectiveness of the programs.
No one even knows how many Americans lack a bank account. A common statistic tossed around is 10 million households, but that figure has not changed in years, and its original credibility is also suspect.
Without a way to measure progress, it is easy to question whether all the effort at financial education is worthwhile.
"We've made progress, but there's a long way to go to in establishing a scientific approach to financial education," said Stephen Brobeck, the executive director of the Consumer Federation of America.
"We have more financial education programs than we can deal with," said Angela Lyons, a professor at the University of Illinois at Champaign-Urbana.
William Anthes, the president and chief executive of the National Endowment for Financial Education, said the study of consumer illiteracy has just begun. "Intuitively we would have to reason that [increased educational] materials are making a positive impact," he said. "One of the areas where attention will be shifting is measurement of impact."
In fact, of the eight guidelines to a successful literacy program that Treasury Department's Office of Financial Education outlined in January, tracking its progress is No. 5.
"We try to help organizations to discern what is a good method of making a program effective," said Dan Iannicola Jr., the Treasury deputy assistant secretary overseeing the office, which was established in May 2002.
Under a grant from the National Endowment for Financial Education, Prof. Lyons is developing a set of evaluation metrics for programs. It should be ready in about 18 months, she said.
"There are concrete things you can measure: Did they increase their saving, reduce their debt? You can measure changes in attitude and satisfaction levels and general financial behavior," she said.
Statistics are available on some programs for example Money Smart, started by the Federal Deposit Insurance Corp. in 2001 with a goal of reaching 1 million adults over five years.
"Recent survey results show we've reached 300,000 people and 40,000 have opened bank accounts," said Donna Gambrell, the FDIC's deputy directory of compliance and consumer protection. By "reached" she means the person has taken at least one of the 10 Money Smart "learning modules."