MyMoney Resources - Life Events

This study analyzes the impact of the FDIC’s Money Smart financial education curriculum and training on the financial opinions and behaviors of course participants. The study collected data from 631 adult respondents who experienced some portion of the Money Smart program during 2004-2005 and also completed a pre-training survey, post-training survey, and telephone follow-up survey. The data indicate that Money Smart financial education training positively affected consumer behaviors as measured through self-reported responses to survey questions 6-12 months after completing the training. Among the significant findings were that participants were more likely to open deposit accounts, save money in a mainstream deposit product, use and adhere to a budget, and have increased confidence in their financial abilities when contacted six to twelve months after completing the Money Smart course than they were before taking the course.

This article provides a brief overview of the field of financial education and explores some of the challenges and potential solutions. The author describes developments in the contemporary financial education movement since the 1990s and the background economic changes that stimulated its growth; reviews currently available financial education initiatives for youth and adults and discusses the evidence about its effectiveness as well as broader challenges for the field. The article concludes by highlighting both general and specific examples of efforts to move the field forward.

This paper tests for the presence of age and gender discrimination in the loan underwriting process. We modify the tools used during the past exams to test for racial discrimination and apply them here to test for the presence of disparate treatment on the basis of age and gender. Using HMDA data along with data from 18 fair lending exams recently conducted by the OCC, between1996 – 2001, we find no evidence of systematic discrimination on the basis of age or gender. Further, the tools used and tested for in this analysis are now readily available for use in future fair lending exams.

The exact cause of the massive defaults and foreclosures in the U.S. subprime mortgage market is still unclear. This paper investigates whether a particular aspect of borrowers' financial literacy—their numerical ability—may have played a role. We measure several aspects of financial literacy and cognitive ability in a survey of subprime mortgage borrowers who took out mortgages in 2006 or 2007 and match these measures to objective data on mortgage characteristics and repayment performance. We find a large and statistically significant negative correlation between numerical ability and various measures of delinquency and default. Foreclosure starts are approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured level. The result is robust to controlling for a broad set of sociodemographic variables and not driven by other aspects of cognitive ability or the characteristics of the mortgage contracts. Our results raise the possibility that limitations in certain aspects of financial literacy played an important role in the subprime mortgage crisis.

We evaluate laws designed to protect borrowers from foreclosure. We find that these laws delay but do not prevent foreclosures. We first compare states that require lenders to seek judicial permission to foreclose with states that do not. Borrowers in judicial states are no more likely to cure and no more likely to renegotiate their loans, but the delays lead to a build-up in these states of persistently delinquent borrowers, the vast majority of whom eventually lose their homes. We next analyze a "right-to-cure" law instituted in Massachusetts on May 1, 2008. Using a difference-in-differences approach to evaluate the effect of the policy, we compare Massachusetts with neighboring states that did not adopt similar laws. We find that the right-to-cure law lengthens the foreclosure timeline but does not lead to better outcomes for borrowers.

The Community Financial Access Pilot (CFAP) began in 2008 and was implemented through December 2009 by the U.S.

American parents, teachers, and policymakers generally express strong support for personal financial education for high school students, despite a need for further research to determine if such education is effective in improving long-term decision-making capabilities. However, research in related fields such as child development and behavioral economics suggests that personal financial learning begins at an early age and encompasses a broad array of general decision-making skills rather than just narrowly financial topics. This research suggests that educators should take a broad perspective on where and how personal finance is taught and learned and make use of findings in psychology and behavioral economics to enhance instruction. The research also supports the thrust of Minnesota’s proposed new social studies standards, which call for personal finance lessons from the early grades through high school but with flexibility on where and how they are taught.

The Federal Reserve Bank of San Francisco, the Take Charge America Institute at the University of Arizona, and the Federal Reserve Bank of Minneapolis invited a small group of researchers and practitioners to discuss how to improve the evaluation and metrics of youth financial education programs. The meeting focused specifically on youth — which we defined as individuals under the age of 25 – in an effort to distinguish this effort from others that have discussed financial education research more broadly. The goal for the meeting was to help create a research agenda that would move the field towards the development of clearly defined outcomes for youth financial education, metrics for capturing ROI, and quality standards for curriculum and delivery that would serve as "best practices" for educators seeking to offer effective financial education interventions.

In a small a financial education pilot at Oh Day Aki Charter School in Minneapolis involving one teacher and about 100 middle and high school students, results suggest that that standard financial education materials can be adapted to benefit Native students in an urban setting, despite pre-existing educational challenges that are typical of inner-city schools, such as high turnover and low reading skills. The pilot's sponsoring partners hope to build on the lessons learned in order to further promote financial education for Native youth.

This study examines the relationship between bank account ownership and student knowledge of personal finance. To assess financial knowledge, the study relies on national data collected every two years by the JumpStart Coalition for Personal Finance. Using test scores from the 2008 JumpStart survey, I assess whether scores are significantly higher among students that have bank accounts, relative to those students that have no formal banking relationship, controlling for demographic and socio-economic variables that might influence financial knowledge. The underlying research question is whether student experience with “real world” financial products is associated with higher levels of knowledge in personal finance. I find that student bank account ownership is significantly associated with higher scores on the test of financial knowledge, even after controlling for significant factors such as race, educational aspirations, and parental education. While the findings do not suggest causality, the results are informative for financial education delivery, particularly the importance of providing interactive opportunities for the application and practice of skills and knowledge.