Measuring the impact of financial education

You have run a financial education programme with families and a few months later, you interview them to find out what impact it may have had. The interviewees recall the workshop, but most of them don’t do a budget; some have talked to their spouses about what they have learned and most are interested in attending another workshop. You are not sure what to write in your report – it looks like the training was “entertaining” at best.
What can you measure? Should you measure what participants remember learning or what they actually apply? Should we use the same indicators with all participants? How reliable are participants’ answers when they declare saving more, or having less debt: is it true or just to please the training organisers? 
Finding what to measure: Running a programme without measuring its impact is a shot in the dark and most likely a waste of resources. Financial education is no exception. But how can you measure its impact? What we want to measure goes back to the first question we should ask ourselves before starting a programme: why do we want to run a financial literacy programme? What are we expecting from it? Financial literacy is not a goal, nor is financial inclusion (apart for financial institutions). The very first step is to identify the issues faced by your target group which could be solved by better managing money. A needs assessment coupled with financial diaries will help get a precise idea of these issues. Addressing these issues will give you learning objectives and impact objectives. For example, if more than a third of a family’s income is used to pay back debts, your programme would focus on how to get out of debt, and the impact can be measured by the change in the amount of debt and the change in percentage of the income. Going further, the diaries may give some insights on why families borrow – emergencies? Recurring health issues? Poor nutrition leading to sickness which impacts the breadwinners’ ability to work and get an income? Fine-tune your programme to address these issues. Even if they do not seem to be “financial issues”, they have an impact on the financial situation of the family. So, finding solutions may also improve the financial situation of your target group.
Knowledge vs. behaviour: it is nice if you test your participants and they can all draft a budget, but if they actually never do it for their own money, or if they do it but don’t use it to prioritise expenses, the impact is nil. Financial education has a lot to do with behaviour, and the first trigger to change behaviour is motivation. One way to motivate your target group is to involve them in building your programme. Explain the project and get feedback from them from the onset, i.e. how they want to do the financial diaries and the needs assessment. Analyse the diaries together and discuss what issues are the most urgent or critical to address. Don’t choose for them – let them choose these issues, let them identify the skill or knowledge gaps that hurdle how they can address these issues, and how they envision a successful programme. Yes, it takes time, and requires several one-to-one meetings with families. But, you may already see these families on a regular basis, and what you gain is their motivation to tackle issues. From passive participants in a training workshop that they find “nice” but they keep distant and once over, they don’t apply it, you turn them into actors of their own change: they are the leaders, the ones who decide what needs to be changed and they choose what will help them improve their lives. Your role is to provide the knowledge and expertise.
Personalised indicators: you may end up with different indicators, because families’ situations are different. One family for example wants to reduce spending on smoking which will help save for the school fee and stop borrowing every year to pay for it. They will thus track how much they spend on cigarettes- it may be the only expense they track, and that’s fine: tracking is not a goal, but a tool to raise awareness on spending patterns. Once they achieve their goal to reduce cigarette spending, they may be motivated to go on tracking and may track all their expenses. By involving them in choosing what they want to change and how to measure it, collecting data may be more accurate too: your target group won’t give you information because they “have to” (with all the potential biases on its quality and accuracy) but because they are interested in knowing how they are doing. (to be continued…)

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