Absence of conflict of interest.
Citation
Highlights
- The study’s objective was to examine the impact of a personal finance course at a university on financial behaviors of college students.
- The study used an interrupted time series design. Using data from a pre- and post-course survey, the author compared the outcomes of students before and after participating in the personal finance course.
- The study found a significant relationship between participation in the personal finance course and higher savings and emergency fund savings, as well as more positive financial behaviors.
- This study receives a low evidence rating. This means we are not confident that the estimated effects are attributable to the personal finance course; other factors are likely to have contributed.
Intervention Examined
Personal Finance Course
Features of the Intervention
The personal finance course was built around the text "Foundations in Personal Finance," authored by Dave Ramsey. The students were encouraged to save $500 in an emergency fund during the semester. The students were also encouraged to achieve as many of the following steps during the semester: (1) save $1,000 in an emergency fund; (2) pay off all debt except house; (3) save three to six months of expenses; (4) save in college fund for kids; (5) pay off home debt early; and (6) build wealth and give. The semester long course (15 weeks) was offered as an elective upper-level course in finance to students who were primarily business majors at a metropolitan university.
Features of the Study
Forty-two students enrolled in the personal finance course. The author compared the outcomes of the students before and after participating in the personal finance course. The study used data from a pre- and post-course survey. The survey outcomes included financial behaviors (emergency funds, budgets, savings), beliefs (career choices, building credit, FICO scores, renter’s insurance, student loans), and knowledge (car insurance, identity protection, and credit reports). The author used statistical tests to examine the impact of the course on student financial behaviors, beliefs, and knowledge.
Findings
Knowledge and skills for money management
- The study found a statistically significant relationship between the personal finance course and student savings as students saved an average of $719 in their savings account and an average of $475 in their emergency fund account.
- The study found a statistically significant relationship between the personal finance course and positive financial behaviors to include saving regularly, planning to invest at a younger age, budgeting regularly, and deciding to avoid credit cards.
Considerations for Interpreting the Findings
The author compared the outcomes of participants measured before and after they participated in the course. For these types of designs, the author must observe outcomes for multiple periods before the intervention to rule out the possibility that participants had increasing or decreasing trends in the outcomes examined before enrollment in the course. That is, if participants who had increasing financial knowledge and behaviors tended to enroll in the course, we would anticipate further increases over time, even if they did not participate in the course. Without knowing the trends before course enrollment, we cannot rule this out. Therefore, the study receives a low causal evidence rating.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author did not account for trends in outcomes before the intervention. This means we are not confident that the estimated effects are attributable to the personal finance course; other factors are likely to have contributed.