In our second webinar, we gave some insights on this important but difficult question: how to measure the impact of financial education. The first challenge is that financial education is not only knowledge and skills, but heavily depends on our behaviour. Even people working in finance may experience overspending and debt.
But as explained in our webinar, the main challenge is that participants’ financial situation – i.e. what a financial education programme aims to improve – is only partially the result of our actions; many other factors that are not in our control can play, like health emergencies, natural disasters, inflation, being made redundant… Another challenge is timing: a financial situation keeps changing, If you measure your participants’ net worth after they have just received their income, or sold their annual crop, it will be much better than a few weeks or months later even if they carefully plan and manage their expenses.
To address these challenges, we recommend thinking over the real aim of your programme at its onset. Financial literacy is not a goal, it is a tool to improve people’s lives. So if the goal of your programme is to make sure parents send their children to school, and you have identified that paying the school fee is the main reason why they don’t, then choose the numbers of days out of school as your indicator. More examples and ideas are provided in the webinar.