The University of Wisconsin-Madison Center for Financial Security is an applied, multidisciplinary research center that seeks to inform practitioners, policymakers, and the general public on strategies that build financial capability over the life course.
Financial Coaching Outcome Measures Project
In partnership with the University of Wisconsin-Extension, the Center for Financial Security is analyzing how a unique Wisconsin-based program, Money $mart in Head Start, affects families’ financial security. Money $mart in Head Start is a multi-county effort in which Head Start families can participate in financial coaching, attend financial education workshops, and receive monthly financial newsletters. Money $mart in Head Start represents a novel effort to integrate financial capability services into an existing public program in order to reach vulnerable families. The program is now in its third year. This research is funded by the Annie E. Casey Foundation.
CFPB Project – Metrics – Adult
This multi-method project delivers measures of financial well-being and its key drivers for working age (ages 18 to 61) and older (ages 62 plus) Americans from the perspective of the consumers themselves. The research is grounded in the existing literature plus in-depth qualitative research with consumers and financial practitioners. Results from these phases of the project show that “financial well-being” can be characterized as being able to meet obligations in the present, secure the future and lead the life you want to lead. Results also show that planning ahead and having goals are fundamental drivers of financial well-being, knowing how to do financial research is more important than knowing financial facts, and knowledge influences financial well-being mainly through behavior (i.e. acting on that knowledge) often non-consciously and through mediating factors. The current phase of the project involves development of scales to assess financial well-being and financial ability. Factor analysis and IRT using data from a large, multi-wave survey will be employed to develop and refine measurement items. These new constructs will be validated against current knowledge in the consumer finance literature.
CFPB Project – Metrics – Youth
This project is a multi-method project seeking to define financial well-being and identify its drivers on behalf of the Consumer Financial Protection Bureau. This project includes a literature review and large scale qualitative study involving interviews with 90 consumers and practitioners around the country. This portion of a larger-scale project is interested in the root causes of financial well-being and therefore is focusing on the youthful antecedents of adult financial well-being (youth being defined as ages 3-20). Hypotheses surrounding these antecedents are being developed through interviews with experts in fields of study such as developmental psychology, youth development, financial education and literacy, family science and development, and youth marketing.
Incentivizing Timely Payments among Borrowers of Subprime Auto Loans: LIFT
The LIFT project, implemented by the Filene Research Institute, targets the low-to-moderate income borrower with subprime credit and supports education to capacity by rewarding consistent, timely loan payments on automobile loans with an explicit and salient financial incentive. Borrowers were randomly assigned to one of two groups: 1) education and a standard loan (control) or 2) education and loan product with the LIFT product potential APR reduction (treatment). Overall, the findings based on loan repayment data are mixed but they generally point towards a positive relationship between the offer of a LIFT loan and timely repayment.
Money $mart in Head Start: Connecting Head Start Families to Financial Capability Services
The Wisconsin-based Money $mart in Head Start initiative (M$iHS), is a collaboration between local Head Start programs and county-based Cooperative Extension offices. Head Start families at participating sites are offered up to three financial capability services: financial coaching, monthly newsletters, or financial education workshops. The variations in services offered across counties allows for analysis of the impact of interventions. Results suggest that taking part in programs related to M$iHS is associated with both positive attitudes and behaviors, including less stress regarding finances, less difficulty paying bills, and greater likelihood of having a written budget. Households that participated in workshops and/or coaching reported even greater gains in managing debt and their ability to save than households receiving only the monthly financial newsletter.
Field Studies of Financial Coaching's Capacity to Facilitate Behavior Change
Using data gathered from multiple financial coaching programs across the country, the Center for Financial Security is exploring the effects of coaching on participants’ financial security. This research is focused on how coaching encourages behavior change and facilitates goal attainment. This research is funded by the Annie E. Casey Foundation.
AARP Foundation’s Financial Capability Project
AARP Foundation (AARPF) developed a unique program that offers financial education to lower-income adults ages 50-64, a population that appears to be underserved by existing financial education efforts. A pre-test post-test evaluation methodology was designed in which financial behaviors, including behaviors around spending, saving, budgeting, investing, handling debt, etc., were measured prior to training and at two follow-up time points. Results show that overall respondents in this study displayed positive and statistically significant changes in financial behavior and attitudes when comparing people to their responses before taking part in the program.
Municipal Financial Empowerment Efforts: LIFT-UP
This pilot program is being implemented by the National League of Cities in partnership with five cities across the country. The Local Interventions for Financial Empowerment through Utility Payments (LIFT-UP) project will test financial empowerment services with five municipal utilities. The goal is to demonstrate if municipalities can identify struggling families, help them reduce missed utility payments, and show evidence of increased financial security. The project is funded by the Center for Financial Services Innovation.
Identifying Effective uses of Technology in Financial Coaching: My Budget Coach
The MyBudgetCoach project, being implemented by the Ohio Benefit Bank and Solutions for Progress, Inc., seeks to assess the effectiveness of a twelve-month budget coaching program administered through an online interface. This study uses a randomized research design to analyze the MyBudgetCoach (MyBC) interface in two contexts: 1) Remote- the use of MyBC as a standalone tool with all coaching sessions occurring remotely via screen sharing and phone, 2) In-Person- the use of MyBC in combination with in-person coaching meetings. The project is funded by the Center for Financial Services Innovation.