I like very much the fact that April has been declared Financial Literacy Month. As a result there has been a flurry of events and activities devoted to discussing, promoting, and improving financial literacy. I cannot stress enough how important it is to have financial literacy at the center of attention, including the extensive coverage it’s been receiving in the media.
It is also at this time that one realizes the need for information. How many institutions are doing financial education programs and how do they do them? I do not know the answer to this question nor would I know where to find this information. I also fear that anybody who is entering this field could end up reinventing the wheel: devising yet another set of curricula, materials, and programs rather than making use of what already exists or backing their program with proven best practices.
Via the creation of the Financial Literacy and Education Commission (FLEC) under the coordination of the Office of Financial Education at the U.S. Treasury, the federal government had admirably coordinated the efforts of its agencies and bureaus that are doing financial education programs. But what about the not-for-profits and other organizations that have become engaged in financial literacy?
In my view, there are many advantages to sharing information and in some degree of coordination among agencies, organizations, and businesses. First, it is very important to know what others are doing so as to minimize wasteful overlap. These days everybody seems eager to set up yet another Web page adding to the ten-thousand existing Web pages! While I appreciate the differences that may distinguish these offerings, I am afraid that their proliferation may simply add to the search costs of individuals who have to navigate an ocean of information on the Web. For those developing financial literacy programs, coordination with others who are doing the same thing can save valuable time and resources. For multiple organizations to spend weeks and months in designing programs that others have already thought about and perhaps even implemented and tested is certainly a waste of time and brain power.
Understanding what is effective in improving and promoting financial literacy is another critical piece of information. It would be very valuable to have this information reported somewhere. We need to devote resources to that which is effective and which has an impact. Funders should be able to determine which programs are effective and worthy of support and institutions interested in promoting financial literacy should be able to look for success cases and use them as models for their own programs.
Because I direct a center that is devoted to promoting financial literacy, I have to subject myself and the center’s research teams to these criteria: evaluate what we do, share information, coordinate activities, and not waste a cent of our valuable resources.