CALIFORNIA STATE UNIVERSITY, NORTHRIDGE

Financial Literacy

The Efficacy of Financial Education for Adolescents in

Their Future Wealth Management Success

A graduate project submitted in partial fulfillment of the requirements

For the degree of Master of Public Administration in Public Sector Management and Leadership

By

Leila Izadian

May 2021
Copyright by Leila Izadian 2021

ii
The Graduate project of Leila Izadian is approved:

___________________________________ _________________

Dr. Philip Nufrio Date

__________________________________ _________________

Dr. Rhonda Franklin Date

__________________________________ __________________

Dr. Kay K. Pih, Chair Date

California State University, Northridge

iii
 Acknowledgments

I am appreciative of my Tseng College experience and all the amazing connections I have gained

over the years with various faculty members and classmates. I have applied many of the concepts

learned throughout the program to both my everyday professional and personal life. I have

genuinely enjoyed our in-class discussion sessions and the opportunity to share my opinions; all

while learning from my professors and classmates at the same time. I could not have completed

this paper without the skillful guidance and support of Dr. Pih; I am beyond grateful for his time

and direction. Lastly, I would like to thank my father for introducing me to the idea of enrolling

in an MPA program. Without him, I would have gone the MBA route and entirely missed out on

the tailored public service approach Tseng College has offered me.

iv
 Table of Contents

Copyright ........................................................................................................................................ ii
Signature Page ............................................................................................................................... iii
Acknowledgments.......................................................................................................................... iv
Abstract .......................................................................................................................................... vi
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 5
Literature Review............................................................................................................................ 7
Benefits of financial education ................................................................................................................. 7
Curriculum Implementation ..................................................................................................................... 8
Research Studies on Financial Literacy .................................................................................................... 9
Opposing Viewpoints ............................................................................................................................. 14
Financial Literacy and Public Policy ...................................................................................................... 15
Knowledge Gap ...................................................................................................................................... 17
Methodology ................................................................................................................................. 18
Ethical Considerations ............................................................................................................................ 20
Policy Recommendation and Conclusion ..................................................................................... 22
References ..................................................................................................................................... 23
Appendix I: School Administrators .............................................................................................. 30
Appendix II: Financial Planners and Wealth Management Professionals .................................... 32

v
 Abstract

Financial Literacy

By

Leila Izadian

Master of Public Administration in Public Sector Management and Leadership

This proposed study applies insights from various perspectives to the issue of financial

success for young adults as they complete their K-12 education and enter into the workforce

environment as productive members of society. This research will be questioning how the

restructuring of K-12 education; by integrating financial literacy education as part of the

curriculum will enhance the quality of students' financial success as they complete their 12 years

of education from K-12 school districts.

This paper explores the possibilities of educational policy reform that can be

implemented by school district public administration officials by integrating financial literacy as

part of the K-12 curriculum. It examines the low personal savings rate and debt behavior of the

young and the potentially life-changing impact that a gradual method of including financial

education has on furthering the success of students as they embark into society and explore their

professional lives.

vi
 Introduction

Just as it was not possible to live well in an industrialized society without print literacy,

the ability to read and write, so it is not possible to thrive in today’s world without being

financially literate. Financial literacy is an essential tool for anyone who wants to be able to

succeed in today’s society and make sound financial decisions (Lusardi & Mitchell, 2014).

While a few definitions of financial literacy have been put forward, a specific and

comprehensive characterization has yet to be established (Huston, 2009). However, the standard

and universal definition of literacy refers to one’s aptitude to read and write (Zarcadoolas,

Pleasant & Greer, 2006). To further elaborate on the definition, according to the Literacy

Definition Committee which is utilized by the National Adult Literacy Survey, literacy is defined

as “using printed and written information to function in society, to achieve one’s goals, and to

develop one’s knowledge and potential” (Kirsch et al., 2001, p.3). To translate, just as general

literacy might be intellectualized as having two scopes, the understanding and ability to apply

knowledge, financial literacy can refer to having personal finance knowledge and the ability to

apply the personal financial knowledge in everyday life (Huston, 2009).

The problem is California lacks a personal finance State mandate (Tennyson & Nguyen,

2001). Studies described by Tennyson & Nguyen have suggested that by mandating financial

literacy education, student knowledge on the subject matter could be increased if the mandates

require thorough access to personal finance topics (Tennyson & Nguyen, 2001). When it comes

to the fundamental skills needed to manage one's financial assets, most traditional graduates lack

the knowledge of wealth management and critical skills needed for day-to-day financial

interactions. Planning for retirement, addressing credit scores, and exploring different types of

investment options are far beyond the immediate reach of many ordinary Americans (Tennyson

1
& Nguyen, 2001). This is a critical public administration issue as default risk and high amounts

of debt limit fiscal space and capacity for debt relief programming, which ultimately leads to

fiscal distress, particularly during mass crisis events such as the COVID-19 pandemic (Arellano

et al., 2021). Research shows that many families are unable to sustain basic family budgets;

nearly 30% of families have incomes that are lower than standard family-size budget levels

(Brocht et al., 2001). The above systemic gap is not a phenomenon unique to the United States;

rather, this is a worldwide dilemma that has been researched globally. This paper will attempt to

add to the ongoing discussion regarding expanded financial literary education and its possible

benefits for high school-aged students and the American economy at large.

The purpose of this study is to determine whether the incorporation of financial literacy

training into pre-college curriculums reduces potential financial difficulties upon entering society

and leads to the future financial wellness of young adults. This research study will apply a

mixed-methods descriptive research approach to address the following research question: “Does

K-12 financial literacy education impact future financial wellness and success?” This study is

designed to address existing gaps in the K-12 curriculum and present findings that could be

significant in influencing public policy that could affect the national and global economy.

The intended audience for this research project is the public education system, including

school district boards and local government officials. It will also seek data from professionals in

the financial sector to investigate the benefits of partnering with financial institutions that may be

able to assist in providing necessary financial literacy. The findings will be nationally significant.

It is generally believed that the more financially educated individuals are, the more

literate they will be as a result when it comes to making the right financial decisions. Financially

literate individuals have a better understanding of and are keenly able to navigate through

2
decision-making as it relates to the financial marketplace and flourish accordingly (Letkiewicz &

Fox, 2014). According to a study by the Federal Reserve, three-fifths of non-retirees with self-

directed retirement savings accounts have little or no comfort managing their investments and

less than two-fifths of non-retired adults think their retirement savings plan is on track (Board of

Governors of the Federal Reserve System, 2018). Also, the Federal Reserve survey found that

when faced with a hypothetical unexpected expense of $400, only 40% of adults said they could

easily cover the cost without having to borrow money or sell something (Board of Governors of

the Federal Reserve System, 2018).

Financial literacy is exceptionally large in scope; there are many subtopics to choose

from, so it will be important to analyze and break down the best options to present for optimal

educational outcomes. This study will focus on young adults' comfort level with basic subtopics

such as saving for retirement, credit scores, homeownership, budgeting, and investing. It is

important to note that widespread financial illiteracy will not be remedied by a single seminar or

one-day course (Lusardi & Mitchell 2014). An improvement would require structured and

sustained education incorporated over time, perhaps even starting in middle school and

continuing through high school, just as mathematics begins in grade one and continues

throughout the course of the K-12 curriculum. Such a large change will require robust data to

support its efficacy.

Current research and general findings show that although financial literacy efforts and

programming are fairly new and the field is still developing, it can be concluded that financial

education during young adulthood is effective in improving overall financial wellness into old

age (Martin, 2007). The new millennium has confronted a recession, inflation, bankruptcies, and

a massive decrease in savings (McCormick, 2009). Considering the fundamental fact that

3
financial literacy education is an effective tool for financial success, an additional effort that has

not yet been studied, and should be included in the literature is complementing the educator’s

perspective by incorporating professional financial planners into the curriculum.

4
 Background

It was not until 2006 that the U.S. government started the first national program to

improve financial literacy. Unfortunately, the initiative lacked a clear definition for financial

literacy and did not use a unit of measurement for consistency (Remund, 2010). After the

recession in 2009, a conceptual definition for financial literacy was created and added to the

National Strategy for Financial Literacy (Remund, 2010). The 2008 housing crisis lead U.S.

policymakers to present a variety of proposals designed to attend to the risk of homeowners

defaulting on mortgage payments (Moulton et al., 2015). A public policy study by Moulton et al.

shows that first-time homebuyers who attended a financial coaching course and stayed in contact

with their assigned financial coach on a quarterly basis were less likely to miss a mortgage

payment (Moulton et al., 2015). Another completely different study found in public

administration literature provides a powerful message that enforces the idea that by subjecting

children to educational practices at a young age, there could be immense positive effects on their

socialization and educational outcomes as they grow into young adults and enter society

(Brooks-Gunn, et al., 2016). Although the studies above focus on homeownership and the impact

of early education—and not financial literacy in general; because not much literature exists in

public administration databases, it is important to recognize the connection between financial

coaching/early education and financial knowledge/positive educational outcomes accordingly.

To elaborate on the background of financial literacy specifically, one of the first studies

on financial literacy included a 2005 survey by the National Council on Economic Education that

included twenty-four items containing various topics of questions ranging from money, interest

rates, the economy, inflation, and personal finance. It found that most high school students in the

survey did extremely poorly on the test, receiving an F with an average score of 53%. Adults did

5
somewhat better with an average grade of C; the trouble was mostly in the area of personal

finance, interest rates, inflation, and the general handling of money (Lusardi & Mitchell, 2006).

Several other surveys and various studies have addressed financial literacy in the United

States, including the 2005 survey by the National Council on Economic Education. According to

this specific survey, most adults believe that it would be beneficial to have a sound economic

education (National Council on Economic Education, 2005; Lusardi & Mitchell, 2014).

Unfortunately, the survey results show such desire is not apparent in the real world; high school

students and workforce groups significantly lack proper financial knowledge (Lusardi &

Mitchell, 2014).

Presently, financial training and education are not a part of the mainstream curriculum in

school districts across the nation (Tennyson & Nguyen, 2001). Consequently, students

graduating from high school may be ill-prepared to face the financial challenges life entails and

may struggle significantly to cope with basic financial needs (Tennyson & Nguyen, 2001). This

inquiry’s primary purpose is to reveal whether the incorporation of financial literacy

programming into K-12 curricula will lead to the future financial well-being of young adults

upon graduation and beyond. This research will utilize a mixed-methods research approach to

determine whether K-12 financial literacy education could impact future financial success and

wellbeing. The research above and below highlights the significance of coaching and early

education as it relates to applicable knowledge improvement and future success.

6
 Literature Review

The following literature was reviewed to examine the effectiveness of early financial

education on individual economic success and the quality of one’s future financial prosperity. It

will be important to note that there is a limited amount of literature on financial literacy and

education for youth that can be found in public administration literature. The studies below

mainly examine the effectiveness of financial education to promote a better understanding of its

impact on future economic success and individual quality of life.

The Department for Economic Cooperation and Development (OECD, 2005) defines

financial education as a way in which individuals improve their knowledge of different financial

products and opportunities to invest via training and instruction; as a result, these individuals

accrue the necessary skills that allow them to become more knowledgeable on financial

opportunities and setbacks, and are more apt to seek advice and assistance with financial service

professionals (OECD, 2005). Financial literacy means having the knowledge, skills, confidence,

and motivation necessary to effectively manage money (Remund, 2010). In short, financial

literacy means having the skills and ability necessary to manage financial resources wisely,

budget for day-to-day expenditures, invest for the future, finance a home, and understand the

concept of wealth and financial resource management.

Benefits of financial education

According to Walstadt et al. (2010), the U.S. educational system in various states has

shown much more interest in including financial literacy in their high school curricula since the

1990s. The number of States that have incorporated financial literacy content into the high

school curriculum rose from 14 to 34 between the years of 1998 and 2010. Surprisingly, states

that required an actual financial literacy course before graduation rose from only 1 to 13 in the

7
same period. It is important to note that economic extremities since the early 1990s have

introduced the need for more studies on individuals with financial problems (Braunstein &

Welch, 2002). These unfortunate events, along with low student markings in math, have piqued

interest in educating adolescents on the subject of financial literacy (Bernanke, 2006).

After the financial crisis of 2008, the “Great Recession,” interest in programs designed to

enhance the financial literacy of students increased significantly. The OECD published various

reports on the importance of financial literacy and financial education programs. Many of these

programs focused on educating young people before they entered the labor market (Mandell &

Klein, 2007).

Curriculum Implementation

As a professor of business at Fairfield University, Martinez (2016) argues in her research

on financial literacy among students that all students should enroll in finance and personal

financial literacy courses and suggests that these courses should be required as part of the

curriculum. She argues this would create an opportunity for a wider group of college students to

learn about finance and personal finance so that they can avoid financial pitfalls in the future. In

her class, she conducted a financial literacy course including videos covering a variety of

financial topics such as money markets and securities. To assure that students learned the

subjects, the course's final project was that each student had to prepare a personal financial plan

for their post-graduation life. This plan had to include personal financial goals including short-

term and long-term goals and basic investment portfolio decisions. Finally, to further express the

importance of personal financial awareness, a wealth management consultant was invited to this

class to explain the importance of personal finance, wealth management, and the mistakes people

make concerning their finances.

8
Research Studies on Financial Literacy

The test results before taking the course and after were compared. The average score on

the pre-test was 61.17 %. At the end of the introductory financial literacy course, students re-

took the personal financial literacy test and their average score was 71.21% indicating that the

score increased significantly (Martinez, 2016). Martinez (2016) argues that one of the most

important outcomes of the 2008 financial crisis was discovering the lack of financial literacy

among the US population. Many Americans purchased homes and signed variations of financial

contracts that, according to today’s standards, they may not have qualified for. As a result of the

financial crisis, the general populations’ lack of understanding of various financial skills such as

budgeting, savings, investment, and financial planning, became more evident after 2008.

The Board of Governors of the Federal Reserve System indicate in a 2018 study that

economic wellbeing rises with education. Most individuals who attend college and complete

their degrees believe that their education has paid off and it has been financially beneficial for

them. The overall benefit of education however is less evident for students who did not complete

their college degree. The report explains the minimum financial comfort (at least doing okay)

among individuals with various levels of education. The study indicates that only 66% of

individuals with high school education are financially at least doing okay in comparison; 69%

with some college education, 72% with an associate degree, 82% with a bachelor's degree and

90% having a graduate degree are at least doing okay financially (Report on Economic Well-

Bing of U.S. Households, 2017).

Brart Frijns argues that financial literacy requires people to have a sound understanding

of essential financial concepts, such as inflation, compound interest, and diversification of risk.

The economic consequences of poor financial literacy are enormous, with people having lower

9
provision for retirement savings and a greater reliance on debt financing such as credit cards

(Frijns et al., 2013). Numerous studies such as (Agarwal et al., 2009; Bell & Lerman, 2005;

Lusardi, 1999) have identified severe consequences of poor financial literacy; including being

more likely to make financial mistakes and lacking proper savings and retirement plans.

Individuals with poor financial literacy also underestimate the effect of compound interest and

accumulate less wealth (Stango & Zinman, 2011). In contrast, financially literate individuals are

more likely to participate in the stock market and mutual funds. (Hastings, 2008).

Lusardi et al. (2018) argue that for a financial literacy education program to be effective

it would require there be follow-up sessions for individuals to sustain acquired knowledge; in

other words, repetition and sustained exposure to financial literacy education is necessary. With

follow-up programs, studies show financial education training could increase the amount of

savings at retirement for a middle-aged individual by about 10% (Lusardi et al., 2018). A one-

time course, although it may have a short-term effect, will not provide the needed long-term

impact for financial success (Lusardi et al., 2018), supporting the theory that financial education

in the public school curriculum is necessary.

Walstadt et al. (2010) further elaborate on other national research that has been conducted

on the effect of state mandates on financial literacy that concluded with positive results. One

study established that adults who had received education from a personal finance course while in

high school had a higher savings rate (Bernheim et al., 2001). Other studies showed that schools

with state mandates had improved scores in the personal finance arena (Tennyson & Nguyen,

2001). Research has shown that more intricate and thorough financial literacy education leads to

more positive effects on student understanding (Walstadt et al., 2010).

Martinez (2016) studied students’ curiosity in different areas of personal finance where

10
students were asked to share a topic they are most interested in. Out of nearly 30 students, half of

them wanted to learn more about how to save for retirement and invest accordingly; only 10-

12% questioned were interested in learning more about paying off student debt or credit cards

(Martinez, 2016). Interest in retirement savings has increased greatly; a study in 2009 found that

college students had minimal interest in financial planning and retirement savings (Dempere et

al., 2010). Walstadt et al. (2010) used an educational program, Financing Your Future (FYF), in

which pre-recorded financial literacy content is provided on DVD for high school teachers to

share with students in class. The contents of this training included vocabulary and key concepts

of personal finance, followed by financial decision making, and income earnings. The research

used two groups of students: one group took the educational DVD course, and one control group

did not. The FYF participant student sample was 673 students, along with 127 in the control

group. Before the DVD training, 67% of student participants were assigned to take the FYF

course and 51% of the control group took a course in economics. Before and after FYF training

tests were conducted; before taking the pre-recorded DVD course, students from the FYF group

averaged a score of 49%, and the control group score was at 49.5% correct. This shows that there

was not much difference between the two groups. After completion of the FYF program in its

entirety, the group participating in the program obtained a score of 68.9%, and the control group

that did not participate in the FYF training program achieved 50.5% (almost the same score as

the first time). These results present that after completing the FYF program, financial literacy

had significantly improved amongst students participating in the course (Walstadt et al., 2010).

These findings are a significant support for the arguments in favor of implementing required

financial literacy courses in public high schools.

Although there is a limited amount of existing data on the impact of K-12 financial

11
education on future financial success, some gages do point out the value of financial education as

mentioned throughout this proposal. Some studies show that although there is a trivial

relationship between high school financial literacy and financial success, there is a substantial

correlation connecting financial success to college-level financial training (Peng et al., 2007). A

study by Martin Varcoe confirms an increase in all aspects of financial success, including

savings, knowledge regarding ways to save on insurance expenses, investing, and other life

necessities (Varcoe et al., 2005).

There are a few noteworthy studies that point to the differences in effects of financial

education on males vs. females. For instance, one study points out that financial education

simply underpinned male’s existing financial knowledge, while females acquired considerably

more financial knowledge in that they learned details they were completely unaware of before

the program of study of male and female teenagers (Danes & Haberman, 2007). There is another

study that shows that social considerations such as a part-time job, being a part of a wealthier

family, and having a source of savings, are correlated with higher quiz performances for high

school students (Valentine & Khayum, 2005).

By introducing financial education during influential and developmental schooling years,

the effectiveness of the programming is much more appealing and significant for a variety of

reasons. First and foremost, the ability to absorb and retain knowledge such as good financial

habits is much easier during youthful years. Youth can then take this knowledge and apply it to

upper-division education, employment, and their adulthood lifestyle (Bruhn et al., 2016).

The initiative to incorporate financial education into high school education is not unique

to the United States. One of the largest studies to date was conducted in Brazil. This study is one

of the farthest-reaching assessments in financial education research, covering nearly 25,000

12
students across 900 high schools in 7 Brazilian states (Bruhn et al., 2016). Not only did this

Brazilian study prove the efficacy of financial education programs, but it also conveyed that

there were significant extensions of knowledge from students to their parents; higher

standardized test scores; and improved overall scholastic performance (Bruhn et al., 2016).

Other countries have also studied and reported financial literacy data. For example,

Russia, Japan, Sweden, New Zealand, the Netherlands, Italy, Sweden, and Germany have found

low levels of financial literacy upon surveying (Lusardi & Mitchell, 2011). Unfortunately, not

much has been done to include programming in the school curriculum.

Lack of financial knowledge and expertise amongst the public has been the subject of

many articles and research papers. Most individuals openly admit that they have made many

mistakes in their financial interactions that could have been avoided if they only knew how

things work in the financial world. Studies show that children and adults are out in shopping

venues an average of three times a week (Suiter & Meszaros, 2005) and with easy access to

online shopping via smartphone applications, exposure to shopping and the temptation to

overspend is a legitimate concern. Other studies show that lack of financial literacy exists in the

broader population as well. Hilgert and Hogarth (2002) did a survey using the data from over

1000 samples (ages 18-97) provided by the University of Michigan. A twenty-eight true or false

question test was given to examine financial literacy in the areas of credit cards, savings, debt,

interest rates, refinancing, and mortgages. The results showed that only two-thirds of the

questions were answered correctly. The most informed area was mortgage at 81% correct,

savings at 67%, and credit cards at 65%, with much less knowledge in the area of mutual funds

and the stock market. The study concluded that people with less financial literacy were among

the single, uneducated, low income, and either incredibly young or incredibly old (Hilgert &

13
Hogarth, 2002). In a related study using the 2004 data from Health Retirement Study (HRS),

Lusardi and Mitchell (2007) evaluated the financial literacy of 1,700 baby boomers by asking

several financial literacy-related questions. The results clearly showed that financial literacy

increases significantly with financial education; the more educated the individual the more likely

the questions will be answered correctly (Lusardi & Mitchell, 2007).

Professor Martinez's research at Fairfield University, mentioned above, was another

example that financial education will increase student knowledge significantly as it relates to

financial literacy. The knowledge test before the financial literacy educational course was at

61.17% compared to post-training test score averages of 71.21% (Martinez, 2016).

Financial Fitness for Life (FFL), a curriculum prepared by the Council of Economic

Education (CEE) has been an instrument for various researchers to measure high school

students’ financial knowledge. Walstadt et al. (2010) used the FFL curriculum to evaluate the

financial literacy of students at the high school level. The results indicated that the students that

participated in the Financial Fitness for Life (FFL) program achieved higher scores than those

with no such training (Walstadt et al., 2010).

Opposing Viewpoints

Although there are numerous studies in favor of early financial literacy education and its

impact on future success and prosperity; there also are some researchers that do not fully support

this phenomenon. Brown et al., (2016) refer to two studies; that of Cole, Paulson, and Shastry

(2015) which investigate the impact of state financial education mandates and mathematical

reforms on investment and debt-related outcomes of middle-aged individuals. They indicate,

while the authors find a noticeable result in mathematics benefits, there was evidence that the

middle-aged population who has already obtained financial education, either accumulate debt or

14
cannot pay their bills on time. One other study (Hastings et al., 2013) investigates a financial

management course for a group of soldiers in the US Army. He reports some positive effects on

a few credit-related outcomes with not much of a change in credit scores, negative legal actions,

or having an active credit (Hastings et al., 2013).

Another example of no supportive research by (Mandell, 2008) that is referred to in

Walstadt (2010), uses data from JumpStart test scores from 2000 to 2006 and indicates that high

school seniors that attended a course in personal finance did not score any higher than seniors

who had not taken the course (Walstadt et al., 2010).

Lusardi, Michaud, and Mitchell (2018) also indicate that financial literacy education may

not always result in financial success and an increase in wealth accumulation. Therefore, one

should not conclude that lack of financial resources is entirely due to their lack of financial

literacy education (Lusardi et al., 2018).

Financial Literacy and Public Policy

There is a palpable reason for interest in the implementation of financial literacy into

educational programming. The current marketplace is multifaceted, and the complexity could

continue to compound. Although the effectiveness of research studies is evident, public

administration officials and policymakers may benefit from data regarding whether the rise in

scores could improve even more with the introduction of financial professionals to the

programming. To readdress the knowledge gap; it cannot be disputed that licensed financial

professionals are likely more knowledgeable about the field and could as a result efficaciously

complement the educational financial teaching component. A policy that leads to a valued

partnership between K-12 curricula and financial professionals may be fruitful, and the findings

of this proposed study may support such an endeavor. If federal requirements exist to ensure that

15
employers in both the private and public sectors extend employee financial education, then

perhaps similar measures should exist in the K-12 platform. By examining the incorporation of

similar measures such as the Employee Retirement Income Security Act of 1974 which mandates

employers to offer an array of information to participants in pension and other retirement benefit

plans (Comptroller General, 2004); the federal government could play a notable role in bracing

financial literacy and establishing requirements for financial education in K-12 districts across

the U.S.

Financial programming and its effect on financial success is a significant and urgent

matter, particularly as we now know the severity that financial distress can cause during difficult

times, such as the COVID-19 pandemic. The U.S. Treasury has recently enacted the U.S.

National Strategy for Financial Literacy (Page, 2020). This programming, although it entails a

proposition to provide Americans access to financial education to help manage financial choices,

does not establish a policy to implement financial education at the early stages of adolescent

educational curricula. No comprehensive national policies exist relating to financial literacy.

The existing literature agrees that financial literacy in young adulthood seems to be

effective in improving lifelong financial success, and individuals' finances can have a drastic

effect on the national economy. However, no comprehensive policies are mandating such

instruction in public schools. While many researchers have concluded that financial literacy

should be integrated into the curriculum, there is a lack of data surrounding the efficacy of

including financial professionals in the design and implementation of such instruction. Given

teachers' limitations and issues regarding training, as well as students' reticence to fully embrace

such instruction, it may be advantageous to study the influence of financial literacy from the

perspective of professionals in the financial sector.

16
Knowledge Gap

While many studies have concluded that teachers should begin implementing financial

literacy courses for young adults, very few existing studies have considered the efficacy of

including professionals in the financial sector as a complementary influence. A national survey

of K-12 points out that there are not enough K-12 educators nationally who are considered

"highly qualified" to teach financial education (Way & Holden, 2009). It seems promising that,

by incorporating financial education from a professional perspective, financial advisors from the

private sector could improve student outcomes by partnering with practicing educators—even

through virtual training for time, logistics, and convenience; the youth could then be better able

to execute their acquired financial skills with a professional introduction to positive financial

behavioral patterns. The summary in this literature review denotes the limited amount of

information that is known as it relates to the revamping of K-12 education by policymakers and

public administration officials.

17
 Methodology

As described earlier in this proposal, this study is designed to examine the connection

between early financial literacy education for high school students and their future financial

wellness and success. This inquiry’s primary purpose is to reveal whether the incorporation of

financial literacy programming into K-12 curricula will lead to the future financial well-being of

young adults upon graduation and beyond. This research will utilize a mixed-methods research

approach to determine whether K-12 financial literacy education could impact future financial

success and wellbeing.

The mixed methodical approach of qualitative and quantitative modeling will include a

questionnaire and semi-structured interview questions to unearth a relationship or lack thereof.

The main limitation of this research may be the lack of a sufficient number of high schools that

presently include financial literacy in their ongoing curricula. To remedy this potential limiting

factor, the study will extend its data collecting process to California Community Colleges as

well, specifically their college of business, to ensure that students with basic financial education

are within the sample. As noted in the 2019-2020 California Department of Education's database

(2019), there are approximately 1,300 high schools in California. Also, according to the

California Community Colleges Office of the Chancellor, there are 117 Community Colleges in

California (McCormick, 2009). At least 600 high schools and 80 community colleges will be

randomly chosen in an attempt to meet a statistically relevant randomized sample. There will be

a concentration on a select number of school districts and community colleges in Los Angeles,

Sacramento, Orange County, and San Bernardino County, with emphasis on the Los Angeles

Unified School District. Surveys will be distributed to school administrators’ publicly available

email addresses and given to department listservs; surveys will be conducted via Surveymonkey.

18
Interviews will be conducted via Zoom.

Additional steps for gathering information for this project will include survey questionnaires

and interview sessions (Appendix II) designed for financial planners and wealth management

professionals to gain knowledge about their experiences with clientele’s mastery of basic

financial concepts. While it is difficult to quantify the exact number of financial planners and

wealth management professionals in Southern California, the study will solicit responses from a

random selection of 300 potential participants including independent advisors and those attached

to larger firms in an attempt to gain a diverse sampling of responses. Interview sessions with a

limited number of these experts in the financial planning and wealth management sector who

indicate a willingness to participate at the end of the survey will further assist in determining the

causal relationship, if any, between financial literacy and wealth management success among the

general population using their services. Surveys will be designed in SurveyMonkey and links

will be sent to individuals and large company-wide listservs, which are available due to the

researcher's professional connections. Interviews will be conducted via Zoom.

Zoom interviews for both school administrators and financial professionals will be

tailored according to survey findings. Interviews will be recorded, pending approval, and a

recording will be made for reference purposes, pending approval of the recording. Open-ended

discussion questions will help determine professional views on students’ preparedness for

financial wellness.

The use of qualitative methods will reveal unique perspectives and thoughts on the topic.

It will also help identify opportunities for improvement, which could ultimately lead to the future

financial wellbeing and success of young adults. A qualitative approach is needed to help

understand existing needs and opportunities for improvement. This approach will include open-

19
ended discussion questions to help understand experts’ and administrators’ views on

preparedness for financial wellness. A qualitative approach is essential to help determine and

understand opportunities for improvement that a quantitative approach on its own may not

provide. A focused yet flexible approach will better assist the researcher in interpreting and

discovering weak points and opportunities that they may not currently be aware of.

The quantitative approach will assist in substantiating qualitative findings. The questionnaire

will contain numeric responses to unbiased questions surrounding financial literacy program

implementation.

These evaluation measures will help policymakers determine the need to implement

financial literacy programming into the K-12 curriculum by evaluating the connection between

financial literacy education and future financial wellness; subsequently, they will be prepared to

make more informed legislative choices. The questionnaire will provide measurable data to

facilitate determining underlying issues and opportunities for improvement, while semi-

structured interview questions will assist in determining underlying needs and problems.

Applying both research methods will help establish a holistic view of the connection between

financial literacy education and future financial well-being and success. The mixed

methodological approach will allow for a more comprehensive understanding of the impact of

financial education on students' success.

Ethical Considerations

This project will focus on the financial literacy of young adults, so participants will be

selected from professional positions in high school and community colleges. All survey

questionnaires and interview questions will be submitted to CSUN IRB for review and approval

before distribution and interview sessions. Surveys will be distributed through SurveyMonkey so

20
that participants can take part at the time and place of their choosing and read through the

consent agreements at their leisure. Surveys will not be distributed to minors due to potential

consent concerns and the fact that adult professionals are better equipped to give useful

quantitative and qualitative commentary on the issue.

Consent forms will be provided to interview subjects before the interview process

approximately two weeks in advance. Participation is voluntary and interview subjects will not

benefit monetarily. There are no anticipated risks connected with the proposed survey and

interview questions. All surveys will be confidential, and candidates are not required to answer

any question they are not comfortable with. Interview recordings, if approved, will be kept on

secure file storage (CSUN Box Secure) and deleted after the study. The investigator understands

the need for anonymity and will sign off on a confidentiality agreement before beginning the

study. All computers used to gather information will be password protected and locked in secure

locations.

21
 Policy Recommendation and Conclusion

The literature examined for this project indicates that there has been a movement in

support of personal financial education throughout the 1990s and beyond. Walstadt and his

colleagues (2010) explain that the U.S. educational system has shown much more interest in

including financial literacy in their high school curricula since the 1990s (Walstadt, et al., 2010).

Also, several schools in a few states have included some form of financial education in their

programming; research focusing on this subject was initiated at that time (Walstadt, et al., 2010).

Overall, the results of many studies and programs that were discussed in this proposal have

supported the notion that financial literacy for youth is an influential attribution to the future

financial success of young adults. Studies show indications that the level of financial comfort

among individuals may increase as the level of financial education increases. As reported in

previous pages, research shows that only 66% of individuals with a high school education are

financially doing okay; 82% with a bachelor’s degree and 90% having a graduate degree are at

least doing okay financially (Board of Governors of the Federal Reserve System, 2018).

Although literature and existing research support the notion that financial literacy leads to

future financial success, there is no established and comprehensive public policy on this matter

that incorporates this strategy into educational criteria’s standards and procedures. As described

earlier, financial programming and its effect on financial success is a significant and urgent

matter, particularly as we now know the severity that financial distress can cause during difficult

times, such as the COVID-19 pandemic. Public policymakers and administration officials could

potentially benefit their constituents by examining and then implementing financial education as

part of policy and educational programming.

22
 References

Agarwal S., Driscoll J., Gabaix X., & Laibson D. (2009). Financial decisions over the lifecycle

with implications for regulation. Brookings Papers on Economic Activity 2, 51–101.

Arellano, C., Bai, Y., & Mihalache, G. (2020). Deadly debt crises: COVID-19 in emerging

markets. National Bureau of Economic Research. https://doi.org/10.3386/w27275

Bernanke, B. (n.d.). Global economic integration: What's new and what's not? Federal Reserve.

Retrieved April 23, 2021, from

https://www.federalreserve.gov/newsevents/speech/bernanke20060825a.htm

Bernheim, D., Garrett, D., & Maki, D. (2001). Education & saving: The long-term effects of high

school financial curriculum mandates. The Journal of Public Economics, 80(3), 435–465.

https://doi.org/10.1016/S0047-2727(00)00120-1

Board of Governors of the Federal Reserve System. (2018, May). Report on the economic well-

being of U.S. households in 2017. Retrieved April 23, 2021, from

https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-

households-201805.pdf

Braunstein, S., & Welch, C. (2002). Financial literacy: An overview of the practice, research,

and policy. Federal Reserve Bulletin, 88, 445–457.

https://doi.org/10.17016/bulletin.2002.88-11

Brocht, C., Boushey, H., & Bernstein, J. (2001). Hardships in America: The real story of

working families. Economic Policy Institute.

https://www.epi.org/publication/books_hardships/

Brooks-Gunn, J., Markman-Pithers, L., & Rouse, C. (2016). Starting Early: Introducing the Issue. The

23
 Future of Children, 26(2), 3-19. Retrieved April 29, 2021, from

http://www.jstor.org/stable/43940578

Brown, M., Grigsby, J., van der Klaauw, W., Wen, J., & Zafar, B. (2016, September). Financial

education and the debt behavior of the young, The Review of Financial Studies, 29(9),

2490–2522. https://doi.org/10.1093/rfs/hhw006

Bruhn, M., de Souza Leão, L., Legovini, A., Marchetti, R., & Zia, B. (2016). The impact of high

school financial education: Evidence from a large-scale evaluation in Brazil. American

Economic Journal: Applied Economics, 8(4), 256–295.

https://doi.org/10.1257/app.20150149

Cole, S., Paulson, A., & Shastry, G. (2014). Smart money? The effect of education on financial

outcomes. Review of Financial Studies 27(7), 2022–2051.

https://doi.org/10.1093/rfs/hhu012

California Department of Education. (2019). Fingertip facts on education in California -

CalEdFacts. Retrieved April 23, 2021, from

https://www.cde.ca.gov/ds/sd/cb/ceffingertipfacts.asp

Danes, S., & Haberman, H. (2007). Teen financial knowledge, self-efficacy, and behavior: A

gendered view. Financial Counseling and Planning, 18(2), 48–60.

Dempere, J. M., Griffin, R. & Camp, P. (2010). Student credit card usage and the perceived

importance of financial literacy education. Journal of the Academy of Business

Education, 11.

https://digitalcommons.kennesaw.edu/cgi/viewcontent.cgi?article=1196&context=ama_p

roceedings

Fernandes, D., Lynch, J., & Netemeyer, R. (2014). Financial literacy, financial education, and

24
 downstream financial behaviors. Management Science, 60(8), 1861–1883.

http://dx.doi.org/10.1287/mnsc.2013.1849

Frijns, B., Gilbert, A., & Tourani-Rad, A. (2014). Learning by doing: The role of financial experience

in financial literacy. Journal of Public Policy, 34(1), 123–154.

https://doi.org/10.1017/S0143814X13000275

Hastings, J., & Tejeda-Ashton, L. (2008). Financial literacy, information, and demand elasticity:

Survey and experimental evidence from Mexico. National Bureau of Economic Research.

https://doi.org/10.3386/w14538

Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2013). Financial literacy, financial

education, and economic outcomes. Annual Review of Economics, 5, 347–373.

https://doi.org/10.1146/annurev-economics-082312-125807

Hastings, J., & Mitchell, O. S. (2010). How financial literacy and impatience shape retirement

wealth and investment behaviors. SSRN Electronic Journal, 1–26.

https://doi.org/10.2139/ssrn.1710146

Herman, R., Hung, A., Burke, J., Carman, K., Clancy, N., Kaufman, J., & Wilson, K. (2015). The

effects of K–12 financial education. In Development of a K–12 Financial Education

Curriculum Assessment Rubric, 9–20. Rand Corporation.

http://www.jstor.org/stable/10.7249/j.ctt19rmdng.10

Hogarth, J. M., & Hilgert, M. A. (2002). Financial knowledge, experience, and learning

preferences: Preliminary results from a new survey on financial literacy. Consumer

Interest Annual. Retrieved November 2, 2020, from

http://www.consumerinterests.org/public/articles/\public\articles\FinancialLiteracy-

02.pdf

25
Huston, S. (2010). Measuring financial literacy. The Journal of Consumer Affairs, 44(2), 296–316.

Retrieved November 3, 2020, from http://www.jstor.org/stable/23859793

Jump$tart. (2017). National standards in K-12 personal finance education with benchmarks,

knowledge statements, and glossary (4th ed.). Coalition for Personal Financial Literacy.

https://www.jumpstart.org/wpcontent/uploads/2018/01/2017_NationalStandardsBook.p

df

Karoly, L. (2016). The economic returns to early childhood education. The Future of Children, 26(2),

37–55. Retrieved November 17, 2020, from http://www.jstor.org/stable/43940580

Kirsch, I., Yamamoto, K., Nortis, N. (2001). Technical Report and Data File User's Manual for

the 1992 National Adult Literacy Survey. NCES 2001-457. Washington, DC: U.S.

Department of Education, National Center for Education Statistics. Measuring Financial

Literacy (csun.edu)

Letkiewicz, J., & Fox, J. (2014). Conscientiousness, financial literacy, and asset accumulation of

young adults. The Journal of Consumer Affairs, 48(2), 274–300.

https://doi.org/10.1111/joca.12040

Lusardi, A., & Mitchell, O. (2007, January). Financial literacy and retirement preparedness: Evidence

and implications for financial education. The Journal of Business and Economics, 42(1).

Retrieved November 20, 2020, from http://www.mrrc.isr.umich.edu/

Lusardi, A., & Mitchell, O. (2014). The economic importance of financial literacy: Theory and

evidence. Journal of Economic Literature, 52(1), 5–44. http://dx.doi.org/10.1257/jel.52.1.5

Mandell, L., & Klein, L. S. (2007). Motivation and financial literacy. Financial Services

Review, 16(2), 106–116.

Martin, M. (2007). A literature review on the effectiveness of financial education. FRB

26
 Richmond Working Paper. https://doi.org/10.2139/ssrn.2186650

Martinez, V. (2016). Financial literacy among our students: Assessing and improving their

knowledge. Journal of Financial Education, 42(3-4), 291–303. Retrieved November 3, 2020,

from http://www.jstor.org/stable/90001154

McCormick, M. H. (2009). The effectiveness of youth financial education: A review of the

literature. Journal of Financial Counseling and Planning, 20(1).

https://ssrn.com/abstract=2225339

Moulton, S., Collins, J., Loibl, C., & Samek, A. (2015). Effects of Monitoring on Mortgage

Delinquency: Evidence From a Randomized Field Study. Journal of Policy Analysis and

Management, 34(1), 184-207. Retrieved April 29, 2021, from

http://www.jstor.org/stable/43866092

National Council on Economic Education. (2005). What American teens and adults know about

economics. Harris Interactive.

OECD. (2005). OECD Annual Report. https://doi.org/10.1787/annrep-2005-en

Page, B. (2020, October 13). Research Report (from FLEC): U.S. National Strategy for Financial

Literacy 2020. Next-Gen Personal Finance. Retrieved April 23, 2021, from

https://www.ngpf.org/blog/research/research-report-from-flec-us-national-strategy-for-

financial-literacy-2020/

Peng, T., Bartholomae, S., Fox, J., & Cravener, G. (2007). The impact of personal finance

education delivered in high school and college courses. Journal of Family and Economic

Issues, 28(2), 265–284. https://doi.org/10.1007/s10834-007-9058-7

Purtell, R., & Fossett, J. (2010). Beyond budgeting: Public-service financial education in the 21st

century. Journal of Public Affairs Education, 16(1), 95–110. Retrieved November 17, 2020,

27
 from http://www.jstor.org/stable/25621971

Remund, D. L. (2010). Financial literacy explicated: The case of clear definition in an

increasingly complex economy. The Journal of Consumer Affairs, 44(2). Retrieved

November 3, 2020, from https://www.jstor.org/stable/23859792

Stango, V., & Zinman, J. (2011). Fuzzy math, disclosure regulation, and market outcomes: Evidence

from truth-in-lending reform. The Review of Financial Studies, 24(2), 506–534.

https://doi.org/10.1093/rfs/hhq089

Suiter, M., & Meszaros, B. (2005). Teaching about saving and investing in the elementary and

middle school grades. Social Education, 69(2), 92–95.

Tennyson, S., & Nguyen, C. (2001). State curriculum mandates and student knowledge of personal

finance. The Journal of Consumer Affairs, 35(2), 241–262. Retrieved April 17, 2021, from

http://www.jstor.org/stable/23860574

Valentine, G., & Khayum M. (2005, April 1). Financial literacy skills of students in urban and

rural high schools. Delta Pi Epsilon Journal, 47(1), 1–9.

Varcoe, K., Martin A., Devitto, Z., & Go, C. (2005). Using a financial education curriculum for

teens. Financial Counseling and Planning, 16(1), 63–71.

Walstadt, W., Rebeck, K., & MacDonald, R. (2010). The effects of financial education on the

financial knowledge of high school students. The Journal of Consumer Affairs, 44(2), 336–

357. Retrieved November 3, 2020, from http://www.jstor.org/stable/23859795

Way, W. L., & Holden, K. C. (2009, January). Teachers' background and capacity to teach

personal finance: Results of a national study. Journal of Financial Counseling and

Planning, 20, 64–78.

Willis, L. (2011). The financial education fallacy. The American Economic Review, 101(3), 429–434.

28
 https://doi.org/10.1257/aer.101.3.429

Zarcadoolas, C., Pleasant, A., & Greer, S. (2006). Advancing Health Literacy: A Framework for

Understanding and Action.

29
 Appendix I: School Administrators

The following questions are a blend of both survey and interview questions that will be used
during the questioning and interview process with school district administrators. The follow-up
in-person interviews will assist in gathering any additional knowledge needed to complement the
survey data. The purpose of these questions is to get a clearer picture of existing standards,
training opportunities, student success, and familiarity with financial programming causes and
effects.

SECTION ONE: Survey questions

Please rank the following statements on a Likert scale from disagree strongly to strongly agree:
Where 1 = Disagree Strongly; 2 = Disagree; 3 = Agree nor Disagree; 4 = Agree; 5 = Strongly
Agree. Choose N/A if the question does not apply.

Please check one rating that answers each question to the best of your knowledge.

1. How do you rate the success of existing financial programming (if any)?

1 2 3 4 5 N/A

2. Are there any courses in your present curricula that you believe have a similar effect on

students learning such as financial literacy?

1 2 3 4 5 N/A

3. Has there been any interest or inquiries over the past several years by parents or students

in your district requiring or recommending the addition of a financial literacy course to

benefit the high school program?

1 2 3 4 5 N/A

4. What is the practicality of adding a financial literacy course to the district high school

program?

1 2 3 4 5 N/A

5. Finally, how significant do you think the cost of such program additions would be?

30
 1 2 3 4 5 N/A

SECTION TWO: Interview Questions

1. Does your district provide a financial literacy course or any similar programming for

students? If so, please explain. If not, please elaborate on any thoughts.

2. If you do have applicable programming, at what year in high school/college level?

3. If you do not presently have applicable programming, is there any plan for the future

inclusion of such a program?

4. Do you train your teachers to teach financial literacy courses?

5. Has your school participated in any of the programs prepared by the Council of

Economic Education?

6. Does your school use any programs such as Financial Fitness for Life (FFL), or

Financing Your Future (FYF)?

31
 Appendix II: Financial Planners and Wealth Management Professionals

The following questions are a blend of both survey and interview questions that will be used
during the questioning and interview process with financial planners and wealth managers. The
follow-up in-person interviews will assist in gathering any additional knowledge needed to
complement the survey data. The purpose of these questions is to get a clearer picture of
professional viewpoints, training opportunities, client financial wellness, and familiarity with
financial programming causes and effects.

SECTION ONE: Survey Questions

Please rank the following statements on a Likert scale from disagree strongly to strongly agree:
Where 1 = Disagree Strongly; 2 = Disagree; 3 = Agree nor Disagree; 4 = Agree; 5 = Strongly
Agree. Choose N/A if the question does not apply.

Please check one rating that answers each question to the best of your knowledge.

1. In general, your clients/prospective clients are trained and informed in the subject of

financial planning and wealth management.

1 2 3 4 5 N/A

2. Clients/prospective wish they knew more about personal financial management when

they were younger.

1 2 3 4 5 N/A

3. Clients/prospective clients had parents who were financially savvy and educated them

when they were younger.

1 2 3 4 5 N/A

4. Clients/prospective clients that are more knowledgeable with their finances were business

majors.

32
 1 2 3 4 5 N/A

SECTION TWO: Interview Questions

1. Do you consider the financial literacy and knowledge that your clients may have to be an

asset to them when reaching out to you for financial planning advice?

2. Has early education and training in the area of financial literacy, economics, and wealth

management been beneficial to your clients/prospective clients?

3. What percentage of your clients/prospective clients have a college education?

4. Do your clients/prospective clients ever inquire about financial

knowledge/information/programming they can share with their children?

33