Financial education for adults

Adult financial education programs often cover topics such as basic budgeting, bank use, and credit management. Specialized education programs can focus on preparing for divorce, bankruptcy, credit building and counseling, homeownership, retirement, or other relevant topics. Financial education may be provided one-on-one or in groups, in person, over the phone, or online. Programs can be offered through non-profit organizations, for-profits, government entities, and employers, and often serve individuals with lower incomes.

Expected Beneficial Outcomes (Rated)

  • Improved financial literacy

  • Increased financial stability

Evidence of Effectiveness

There is insufficient evidence to determine whether financial education for adults improves financial literacy, increases positive financial choices, or increases financial stability (Fernandes 2014, Hastings 2013*). Available evidence suggests that financial education programs may lead to small positive changes in financial decisions and financial literacy (Skimmyhorn 2016*Xiao 2016*Fernandes 2014, Collins 2012, Collins 2010b), but effects vary widely (Hastings 2013*). Education in the workplace related to retirement may also increase retirement savings (Skimmyhorn 2016*).

Experts suggest that programs designed for specific audiences, focused on a distinct topic, and delivered just before a relevant financial event may be more likely to change participants’ financial behavior than other programs (Hathaway 2008). A large study of military personnel and small studies examining programs that support survivors of domestic abuse, individuals participating in an Individual Development Account (IDA) program, and low income individuals living in subsidized housing appear to support this recommendation (Skimmyhorn 2016*, Hetling 2015*Reich 2015*, Grinstein-Weiss 2015*, Collins 2012). However, additional evidence is needed to confirm effects.

Impact on Disparities

Likely to decrease disparities

Implementation Examples

Several government agencies provide financial tools or curriculums. The Financial Literacy and Education Commission of the United States Department of the Treasury, for example, has a national financial education website, (US Treasury-Resource center). Also, the Federal Deposit Insurance Corporation (FDIC) offers Money Smart, a financial education curriculum that can be used by individuals, financial institutions, or other organizations (FDIC-Money smart). Private non-profits, such as the National Endowment for Financial Education, provide financial education resources and training tools for youth and adult learners at all income levels (NEFE).

Implementation Resources

CFPB - Consumer Financial Protection Bureau. Resources for financial educators.

FDIC-Money smart - Federal Deposit Insurance Corporation (FDIC). Money Smart: A financial education program. - Federal Trade Commission (FTC). Consumer protection basics. - US Department of the Treasury. - National Credit Union Administration (NCUA). Financial Literacy Tools & Resources.

NEFE - National Endowment for Financial Education (NEFE).

Citations - Evidence

* Journal subscription may be required for access.

Fernandes 2014 - Fernandes D, Lynch JG, Netemeyer RG. Financial literacy, financial education, and downstream financial behaviors. Management Science. 2014:1-23.

Hastings 2013* - Hastings JS, Madrian BC, Skimmyhorn WL. Financial literacy, financial education, and economic outcomes. Annual Review of Economics. 2013;5(1):347-373.

Skimmyhorn 2016* - Skimmyhorn W. Assessing financial education: Evidence from boot camp. American Economic Journal: Economic Policy. 2016;8(2):322-343.

Xiao 2016* - Xiao JJ, O’Neill B. Consumer financial education and financial capability. International Journal of Consumer Studies. 2016;0.

Collins 2012 - Collins JM. The impacts of mandatory financial education: Evidence from a randomized field study. Journal of Economic Behavior & Organization. 2012;95:146-158.

Collins 2010b - Collins JM, O'Rourke CM. Financial Education and Counseling-Still Holding Promise. Journal of Consumer Affairs. 2010;44(3):483-498.

Hathaway 2008 - Hathaway I, Khatiwada S. Do financial education programs work? Federal Reserve Bank of Cleveland. 2008: Working Paper.

Hetling 2015* - Hetling A, Postmus JL, Kaltz C. A randomized controlled trial of a financial literacy curriculum for survivors of intimate partner violence. Journal of Family and Economic Issues. 2015.

Reich 2015* - Reich CM, Berman JS. Do financial literacy classes help? An experimental assessment in a low-income population. Journal of Social Service Research. 2015;41(2):193-203.

Grinstein-Weiss 2015* - Grinstein-Weiss M, Guo S, Reinertson V, Russell B. Financial education and savings outcomes for low-income IDA participants: Does age make a difference? Journal of Consumer Affairs. 2015;49(1):156-185.

Citations - Implementation Examples

* Journal subscription may be required for access.

US Treasury-Resource center - US Department of the Treasury (US Treasury). Resource center: Financial literacy and education commission.

FDIC-Money smart - Federal Deposit Insurance Corporation (FDIC). Money Smart: A financial education program.

NEFE - National Endowment for Financial Education (NEFE).

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