Online Investment Education: Listening to Learners to Develop an Effective Financial Literacy Program for Farm Households

By O'Neill, Barbara; Porter, Nancy M. et al. | Journal of Financial Counseling and Planning, January 1, 2010 | Go to article overview

Online Investment Education: Listening to Learners to Develop an Effective Financial Literacy Program for Farm Households


O'Neill, Barbara, Porter, Nancy M., Pankow, Debra, Schuchardt, Jane, Johnson, Jason, Journal of Financial Counseling and Planning


A needs assessment was conducted for the adaptation of an existing online Cooperative Extension investment course for use by farm households. The theoretical model was Social Marketing Theory. Data about financial attitudes, practices, and learning preferences of farm households were collected through a telephone survey of 300 farm households and two focus groups. Quantitative and qualitative data confirmed that farmers prefer investing in land and farm-related assets instead of securities. Further, an increasing number of farm family members engaged in paid employment, which provided access to employee benefits. Many farmers did not plan to retire in later life but indicated a desire to scale back their work hours and/or reduce the size of their farm business. Women in the sample were more engaged with the Internet than men and less likely to dislike using computers.

Key Words: farm households, farmers, financial literacy, investing, retirement planning

In an article about strategies to motivate people to improve their financial practices, the National Endowment for Financial Education® (NEFE®) recommended "remember to ask what a client wants rather than telling him or her what you have to sell" (NEFE, 2004, p. 42) and "study the demographics and requirements of target audiences in order to incorporate relevant examples, language, and anecdotes in courses and materials" (NEFE, 2004, p. 43). This article provides a case study example of how these recommendations were carried out in the development of a financial education program. Specifically, the article describes findings and implications from a study of the personal finance and investing learning needs of a specific target audience: farm households. The term "farm households" is defined as any operation with $1,000 or more of annual sales from agricultural products including crops, livestock, and timber (Economic Research Service, 2005).

This study, the result of a market analysis conducted by a public relations firm for a grant-funded financial education project, was undertaken to inform the adaptation of the Cooperative Extension1 basic investing course, Investing for Your Future, for the intended target audience of farm households. It underscores the importance of understanding the mindset and culture of a target audience as the basis for providing relevant and appropriate content. The "Online Investment Education (OIE) for Farm Households" project was created to reach farm families nationwide with investment information that is relevant to their needs. The project was funded with a 2-year grant to the eXtension2 Foundation from the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation. The objective of the OIE project was to expand the existing eXtension Investing for Your Future (IFYF) online course so that it is interactive and designed with the needs and lifestyles of farm households in mind. The project was guided by a team of 16 members from 10 states, the National Institute of Food and Agriculture of the U.S. Department of Agriculture, and eXtension.

The OIE project enhances and expands existing IFYF content to make it interactive and attractive to farm households. An introduction and eight new farmer-centric lessons were developed with discussion of topics that farmers specifically asked for, such as a comparison of stock versus farmland as an investment. Also included are features such as chats and exercises to engage users and encourage them to take action related to investing.

Farm households are an under-served audience because large financial services firms and financial education providers are often not located nearby, making it difficult to access personalized investment information. In addition, they have unique investment education needs. For many farmers, their wealth is tied up in their land instead of in tax-deferred retirement savings accounts and other investments. If their land is subsequently sold to a developer or another farmer, or their development rights are sold to a farmland preservation program, farmers need to make wise investment decisions so that the proceeds of their sale last throughout their lifetime.

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