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ERIC Number: EJ1074666
Record Type: Journal
Publication Date: 2015
Reference Count: 2
Using a Financial Health Model to Provide Context for Financial Literacy Education Research: A Commentary
Huston, Sandra J.
Journal of Financial Counseling and Planning, v26 n1 p102-104 2015
In the article, "Enhancing links between research and practice to improve consumer financial education and well-being" Billy J. Hensley, Director of Education at National Endowment for Financial Education® (NEFE®), outlines his perspective on the current relation between financial education and financial outcome (downstream financial behavior) by drawing on a recent study by Fernandes, Lynch & Netemeyer (2014). Evidence from this meta-analysis study indicates that financial education has little to no impact on financial outcome and the three main conclusions Hensley highlights from the Fernandes et al. (2014) study relate to education timing and decay, weak linkage between education and behavior, and the need for improvement both in terms of education programs and research design. In this commentary, Sandra Huston questions the implicit assumption that for financial education to be deemed successful it must have an appreciable impact on one's financial outcome (or health). She argues that education is one method used to increase both a person's knowledge and ability or skill to use that knowledge (human capital). Financial education is designed to enhance human capital specific to personal finance (i.e., financial literacy). The hypothesis is that attained human capital allows people to make better and more informed choices. But, the actual behavior and resulting financial outcome depends on many internal (e.g., whether the person chooses to use their expertise, competing intertemporal goals) and external (e.g., market conditions, regulations, product & service access, socio-economic status) factors. Huston concludes that if the collective goal is to help individuals and families maintain or improve their financial health, then a framework should be established to position the context of this work.
Descriptors: Money Management, Financial Services, Educational Research, Meta Analysis, Human Capital, Models, Educational Practices, Context Effect
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Publication Type: Journal Articles; Opinion Papers; Reports - Evaluative
Education Level: N/A
Authoring Institution: N/A