Assessing a Community-Based Financial Literacy Program: A Case Study in California's Silicon Valley

By Xu, Xiaoyan | Journal of Financial Counseling and Planning, January 1, 2018 | Go to article overview

Assessing a Community-Based Financial Literacy Program: A Case Study in California's Silicon Valley


Xu, Xiaoyan, Journal of Financial Counseling and Planning


A significant proportion of American adults-particularly those with limited schooling, in lower income categories, in minority groups, or who are in their twenties or near retirement- have very limited financial knowledge or an ability to manage personal finances (Agarwal, Driscoll, Gabaix, & Laibson, 2009; Chen & Volpe, 1998; Lusardi & Mitchell, 2008, 2009; Lusardi, Mitchell, & Curto, 2010). In particular, financial illiteracy among lower-income consumers has been shown to be a serious issue: individuals in this group are more prone to making poor financial choices than others and are more vulnerable to economic conditions (Gale, Harris, & Levine, 2012; Jacob, Hudson, & Bush, 2000). The recent economic crisis was a grim reminder that the financial difficulties of individuals and families can dramatically affect the financial health of local communities and financial markets. The former Federal Reserve Chairman Ben Bernanke has recognized the need for greater financial education in underserved communities and suggested strengthening efforts in these areas. As he puts it, "There needs to be a broader understanding in minority communities, which haven't had that much exposure [to financial education], about saving and building a credit record and being part of the mainstream economy" (Goo, 2009).

In an effort to help low-income minority families in the heart of wealthy Silicon Valley to take control of their finances, a community-based financial literacy and assetbuilding program were started in 2014. The long-term goals of the program include helping families in targeted neighborhoods to increase savings, reduce debt, and build credit. The program design addressed the key challenges that many community-based financial literacy and asset-building programs face, including reluctance for the families to engage in a financial relationship with formal financial institutions and turning passive absorption of knowledge into action. Our participants were mostly middle-aged Hispanic females with lower than high school education. At the start of the program, about 70% of the participants already possessed some type of bank accounts with less than $1,000 savings, and most participants reported having problems with saving on a regular basis. At the completion of the program, participants reported significant improvements in key financial knowledge areas, such as budgeting, debt management, and basic banking. Participants reported engaging in several behavioral changes, such as setting financial goals, regularly reviewing their credit, and actively seeking debt reduction. And among the participants who did not have a bank account yet, 44% said they were planning to obtain one; at 2-month follow-up interviews, some of these participants indicated that they had successfully obtained bank accounts for the first time. Most parents also reported that their children gained financial knowledge and that they started saving their own money as a result of the children's financial education portion of the program which had been provided concurrently with the adult services.

This article serves as a preliminary evaluation of the program after 2 years of implementation and explores possible enhancements for future efforts in community-based financial education and asset building. It also adds to the relatively scarce research in community-based financial education. Compared to previous studies which usually concentrated on assessing knowledge learned or specific outcomes such as number of bank accounts opened (Lyons & Scherpf, 2003), our program evaluation was more comprehensive, ranging from knowledge gain to changes in behavioral tendencies. It also illustrates how a unique partnership between financial institutions, a university, community-based organizations, and government agencies can bring shared resources together to address important social and economic issues in the local community.

Literature Review

Financial literacy goes beyond understanding of financial concepts to the actual ability to use those concepts in managing personal finance and choosing and managing financial products (Lusardi et al. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Assessing a Community-Based Financial Literacy Program: A Case Study in California's Silicon Valley
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.