Research Briefs for Financial Educators: Knowledge, Gen Z Education, Illiteracy, and Stimulus Payments

By Barbara O’Neill, Ph.D., CFP®,

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Personal finance research informs high-quality financial education briefings, publications, and 1:1 financial counseling sessions with clients. Below are findings and implications for practice from four recent studies:

Financial Knowledge- Kim et al. (2022) explored Americans’ financial knowledge from 2009 to 2018 and the use of “don’t know” responses. Four waves of National Financial Capability Study data were analyzed. Objective financial knowledge was lower in 2018 than in 2009 and the proportion of overconfident individuals was higher in 2018 than in 2009. The mean number of “don’t know” responses to objective knowledge questions increased consistently over the time period studied, raising questions about financial education methods.

  • Implications: While financial knowledge scores were somewhat higher for those with financial education, decreasing financial knowledge scores and increasing “don’t knows” are concerning. The study authors suggest compliments to formal financial education, including regulation and choice architecture (e.g., nudges and defaults), as well as simpler and more timely advice instead of relying on long-term retention of information.

Generation Z Financial Education- This experimental study by Sconti (2022) with 650 high school students explored which financial education method works best for Gen Z (age 10-25 in 2022): digital vs. in-person. Both methods increased financial knowledge, but only traditional financial education (face-to-face teaching) showed long-run, cost-effective results. A follow-up study found persistence of financial education affects three months later with traditional in-person courses. Female students, however, performed worse than males.

  • Implications: Both financial education treatments have positive effects but different costs. Digital courses are less expensive when there is no classroom financial educator. However, the effects of in-person financial education appear to last longer than for digital courses, perhaps because talking with a financial educator excites students’ curiosity about personal finance topics. Both teaching methods can complement one another.

Financial Illiteracy- Treger (2022) explored whether young adults talk about retirement with others and correlates between discussing retirement and retirement preparation. Results indicated a gap between young adults’ generally positive attitudes toward retirement and behavioral measures of retirement preparation. Parents were the most common source of conversations, and the internet was not a significant information source. A greater number of retirement conversations was positively associated with knowledge of retirement relative to peers.

  • Implications: Young adults can benefit from talking about retirement with numerous others (e.g., parents, siblings, friends, and teachers). They are not “too young.” Talking about a topic, in general, promotes its importance. The effect of retirement conversations on retirement preparation varied by source. The finding that parents are the most impactful information source suggests the usefulness of “train the trainer” financial education classes for parents and involving parents in youth financial education programs.

Pandemic Stimulus Payments- This randomized control study by Jaroszewicz et al. (2022), conducted from July 2020 to May 2021, explored the impact of stimulus payments on the lives of low-income U.S. households. They found evidence that “free money” led people to spend more and work less. Stimulus recipients also fared worse on most survey outcomes for financial and psychological well-being, cognitive capacity, and physical health.

  • Implications: These findings are in stark contrast to what policymakers expected. The researchers noted that receiving some- but not enough- money may have made the gap between resources and needs more salient, which, in turn, generated feelings of distress. Not working may have also reduced the sense of personal agency that work provides. In addition, simply giving people money doesn’t make them better stewards of it. Sending people cash with no strings attached is not recommended.

Jaroszewicz, A., Jachimowicz, J., Hauser, O., & Jamison, J. (2022). How effective is (more) money? Randomizing unconditional cash transfer amounts in the U.S. SSRN.

Kim, K.T., Lee, S., & Hanna, S.D. (2022). Has financial knowledge increased in the United States? Journal of Financial Counseling and Planning, 33(2).

Sconti, A. (2022). Digital vs. in-person financial education: What works best for Generation Z? Journal of Economic Behavior & Organization, 194, 300-318.

Treger, S. (2022). Let’s talk about it: Discussing retirement with multiple sources is associated with retirement preparation in young adults. Journal of Family and Economic Issues, 43, 621-636.





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