Starting Younger: Evidence Supporting the Effectiveness of Personal Financial Education for Pre-High School Students

Abstract A total of 1,279 students in grades 5 through 9 were given personal finance education in the form of a live play and supporting classroom instruction revolving around the benefits of saving. Students’ knowledge and attitudes were tested both before and after the educational intervention with identical questionnaires in order to examine the magnitude of change and to test for differences by the age (grade) of the students. The impact of the intervention on actual savings behavior was measured through an experiment which gave each student a dollar bill and promised an additional dollar if the original dollar was brought back after 2 weeks. The students were randomly divided into a test group, which received the original dollar after the educational intervention, and a control group which did not receive the education until after the experiment had been completed. The questionnaire results showed that learning and attitude change were inversely related to age, suggesting that earlier education might be more effective. The experiment showed that savings behavior (deferring consumption to earn a second dollar) was related to gender (females did better), directly to financial literacy and inversely to grade. However, the test group was not significantly more likely to return the dollar as the result of the educational intervention.