Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the impact of the Sharpen Your Financial Focus (Sharpen) program on financial behaviors.
- The study used a difference-in-difference design to compare the outcomes of program participants in the Sharpen program to similar individuals who did not participate in the program using administrative data to compare the two groups.
- The study found that participants of the Sharpen program had significantly lower debt and credit ratios after completing the program than the comparison group.
- This study receives a low evidence rating. This means we are not confident that the estimated effects are attributable to the Sharpen Your Financial Focus program, other factors are likely to have contributed.
Intervention Examined
Sharpen Your Financial Focus (Sharpen)
Features of the Intervention
Sharpen Your Financial Focus (Sharpen) is a national financial education initiative from the National Foundation for Credit Counseling (NFCC) designed to help individuals stabilize their financial situations. The Sharpen program, which ran from 2013-2016, consisted of three components: (1) a financial stress test to increase client’s awareness of their own financial behaviors, (2) a financial review, goal setting, and (3) action planning with an NFCC-certified financial professional and targeted in depth financial education on a high priority area as defined by the client. The program was designed to serve adults seeking credit counseling across the United States. Services were delivered by various non-profit organizations.
Features of the Study
The study used a difference-in-difference analysis to compare the outcomes of participants in the Sharpen program to a comparison group who did not participate in the program. Using data from administrative files, the author matched 6,094 Sharpen program participants to 6,005 similar nonparticipants on characteristics related to credit score and other debt and financial history information. However, they did not match participants on gender, age, race, and ethnicity. The sample was primarily white (64%), and female (69%). Participants had varying levels of educational background, with the majority being high school graduates (30%) and two year/technical school graduates (34%). Participants averaged approximately 43 years old, with a household size of 2.5, and an average monthly income of $3,093.
All the participants in the Sharpen program received the financial stress test and session with an NFCC-certified financial professional. Only a small portion (16%) of the participants received in-depth targeted education. Additionally, over half (62%) of participants were referred to a supplemental debt management program. The comparison group did not participate in credit or financial counseling. Data were sourced from administrative files and included demographics, financials, reasons for seeking counseling, and longitudinal credit report data which was comprised of credit score, debt, and payment delinquencies. Outcomes included total revolving debt, total debt, open revolving credit ratio, and total revolving balance-to-credit ratio. The author used statistical models to compare differences in outcomes between the treatment and comparison group participants.
Findings
Knowledge and skills for money management
- The study found that treatment group participants had significantly less total revolving debt and total debt than the comparison group participants.
- The study also found that treatment group participants showed significant improvement on their open revolving credit ratio and their total revolving balance-to-credit ratio relative to participants in the comparison group.
Considerations for Interpreting the Findings
The author matched participants based on shared debt and financial histories, but did not match on variables such as gender, race, ethnicity, or age which could have affected the difference between the treatment and comparison groups. These preexisting differences between the groups—and not Sharpen Your Financial Focus—could explain the observed differences in outcomes. CLEAR guidelines require that matched comparison group designs must match on the required control variables for the topic area or include them in the statistical models. The author did not include the variables in the models. Therefore, the study is not eligible for a moderate causal evidence rating, the highest rating available for nonexperimental designs.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author did not control for differences in key factors between the treatment and comparison groups. This means we are not confident that the estimated effects are attributable to the Sharpen Your Financial Focus program; other factors might also have contributed.