Consumer Education Initiatives in Financial and Health Literacy. Implications for Future Initiatives


Potential next research steps could lead to a more comprehensive understanding of the value of achieving financial literacy and health literacy among low-income populations.

Continue and enhance qualitative research with consumers, to ensure that the content of current and new financial and health information is appropriate. Both the literature and the interviews identified the importance of generating appropriate content and noted that information that individuals with low financial or health literacy levels can easily understand will also be easily understandable for those with higher levels of financial or health literacy. Most commonly, participants recommended focus groups for evaluating concepts and constructs to be used in an initiative. Cognitive and usability testing can evaluate comprehension, flow, amount of information, and recall of draft information. In conducting this testing, it is critical to include the target audience in the development of an initiative from the beginning and continue throughout. Thus, people with low incomes or people with low education levels (which is often used as a proxy for low health literacy levels) should participate in formative and qualitative research, perhaps even more frequently than people with higher income should or higher education levels should. The literature underscores that putting such initiative into developing materials will result in products that consumers are more likely to use and understand.

Develop and evaluate training protocols to ensure that financial educators are knowledgeable and that they use an evidence-based approach to financial education. As was reported in the literature, there is ambiguous evidence that financial education leads to financial literacy or significant changes in financial management. On the other hand, in some circumstances, the evidence suggests that financial education influences financial behaviors, such as savings. Interview findings suggest that few initiatives collect effectiveness information that illustrates their success in influencing behavior. Available literature suggests that that financial education programs increase financial literacy only modestly, and the interviews suggest that a priority in increasing financial literacy is to emphasize effective dissemination. One concern noted by interview participants was a lack of evidence-based training for financial educators. In contrast, health educators and clinicians are well taught, although they may primarily supply information within their own fields of knowledge and may not be informed about the full range of health issues. There have been substantial initiatives to develop tools to improve the clinicians ability to help patients and other consumers understand a health condition, understand the steps necessary to manage the condition, and feel confident about their own ability to make future health decisions. The lack of valid and reliable educational standards in financial literacy suggests that future research should focus on developing and evaluating training protocols and supporting the use of these effective models.

Examine the organizational characteristics of community-based organizations that produce or are associated with effective financial or health literacy initiatives. Interview participants advocated involving community-based organizations for consumer education initiatives. The literature review also indicated that outreach activities are often conducted at the community level. At the same time, many initiatives are primarily web based and thus, by definition, are developed for a national-level audience. We did not find any research to suggest that partnerships with community-based organizations were more effective than initiatives that were strictly community-based or federal in their scope. That said, community-based organizations can be a rich resource, since such organizations can have a greater depth of knowledge and understanding about their community than is possible for national organizations or the federal government. Using this connection to community residents, community-based organizations could be instrumental in initiatives to customize information and to understand consumer challenges. Furthermore, these organizations can and do serve as facilitators of potential interventions, building trust and encouraging program participation. It is likely that some community-based organizations are more effective than others are, and future research should examine what organizational characteristics produce results that are more effective. Qualitative research could explore this question by identifying potential institutional traits and full-scale evaluations to test whether community based organizations are more effective.

Find linkages between financial decision making and other activities that could provide educational opportunities. Related to examining organizational characteristics that produce or are associated with effective financial or health literacy efforts, examine activities that could be connected and related to improving financial or health literacy. For example, some retailers are beginning to promote saving for Christmas spending. This offers the chance to collaborate with other retailers to educate consumers about saving behaviors. Some grocery stores have in-store banking services where it could be possible to provide financial education similar to how some pharmacies provide diabetes education.

Borrowing from health care, examine the use of regular financial checkups and screenings to improve financial literacy. According to research and the interviews, health care institutions are more predisposed to educate individuals about health care issues than financial institutions are to educate about finances. Most health care institutions, such as doctors offices, hospitals, and to a certain extent pharmacies, incorporate at least some interaction between experts (i.e., doctors, nurses, pharmacists) and patients. Most individuals report having a regular source of health care, such as a primary care doctor or nurse. Having a fixed source of care increases the likelihood of interacting with a clinical provider who can evaluate their health. Although, even in the case of health care, there is a need for improvement in how clinical providers communicate with patients. In contrast, financial institutions, such as banks and mortgage lenders are less likely to have meaningful or educational interactions with consumers. In these settings, the use of technology (e.g., ATMs) may even prevent interaction, and some individuals have very few or no interactions with banks. In addition, while consumers may see a clinical provider for regular annual checkups and screenings (although typically at a cost), there is no similar action that consumers can take to regularly monitor their finances. One potential method of obtaining a regular financial check-up is through tax preparation. Free tax preparations are provided through IRSs Volunteer Income Tax Assistance Program (VITA), the IRSs Tax Counseling for the Elderly (TCE) Programs, and AARPs tax aide information, among others. Unless low-income individuals participate in a special program, such as an IDA program, or actively seek out financial education, few local financial institutions provide regular, annual financial check-ins to review overall financial well-being, develop financial goals, solve problems, and otherwise improve financial literacy. Future research could examine the use of long-term, annual, tailored financial education initiatives to improve financial well-being. Future research could also examine alternative methods of disseminating financial education materials and perhaps build on prior initiatives that have proved effective. Examples of effective approaches include targeting information to a specific audience and offering peer mentoring or coaching services. Research could also help establish which venues are most likely to attract the target audience.

Build more effective evaluations into initiatives. Interview participants rarely reported evaluations conducted of their initiative(s). More commonly, ongoing monitoring was conducted to determine the progress of an initiative. A few agencies reported that they did not have an opportunity to conduct evaluations because of resource and timing constraints related to the need for government review. Although program officials were satisfied with their initiatives value to consumers, most indicated that an evaluation of their initiative would be valuable for their programs work. Future initiatives, particularly ones with multiple grantees, could include simple evaluation plans from the beginning. Programs could solicit input from new or previous grantees to determine whether such evaluation plans are valid and feasible. Information gained from grantees or outside consultants could inform the process of developing and assessing the validity of evaluation measures. Evaluation plans must be more substantial than simple monitoring of an initiative if they are to gauge the effectiveness of an initiative.

Expand on traditional forms of research to segment audiences and, ultimately, to customize financial or health literacy initiatives to smaller target audiences. This research project focused specifically on low-income consumers. However, there are multiple ways of segmenting audiences that may, in turn, help to develop targeted financial and health education initiatives. For example, CMS examines active versus passive information seekers. One method to segment audiences is by using a data on audiences. PRIZM is a database that defines households according to demographically and behaviorally distinct types, or "segments," including demographic, lifestyle, attitudinal, and behavioral characteristics. PRIZM links household- and neighborhood-level segment assignments and can evaluate markets, territories, service areas, and other geographic areas. This can be a valuable tool to understand small target audiences, to develop materials, develop a dissemination strategy, and to examine where people currently go to socialize and/or obtain information.

Explore new methods of outreach, such as the new forms of online communities. The literature suggests that peer counseling is effective and that ongoing contact among peers is important. Establishing online discussion groups or other venues for continued peer-to-peer contact could be another area of effective outreach. This may be valuable for graduates or alumni of programs to remain involved and to reinforce positive behaviors. This format should be evaluated as a potential method of outreach to low-income individuals who are technologically savvy.

Examine the knowledge, attitudes, and beliefs of individuals with the lowest financial literacy skills and least interest in financial literacy. As we noted earlier, many of the financial literacy studies were limited by a self-selection bias to participate in financial education programs. As there is a lack of motivation among very low-literacy audiences to seek financial counseling, many individuals in this priority population may never receive the financial education and support they may need. Examining the knowledge, attitudes, and beliefs of this specific audience would be valuable in determining how to develop appropriate initiatives to reach and motivate the audience.

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