The authors\u2019 conclusions are clear: over all, financial education is laudable, but not particularly helpful. Those who receive it do not perform noticeably better when it comes to saving more, for example, or avoiding ruinous debt. Even more depressing, the results of efforts aimed at low-income people are particularly weak. Those who need the help most seem to benefit the least.<\/p>\n\n\n\n
DON\u2019T get me wrong. I am all for trying to teach household finance in schools, starting as early as possible. And when it comes to high school, I think learning about compound interest is at least as important as trigonometry or memorizing the names of all 50 state capitals. If we try enough approaches, and evaluate what works, we may improve such programs\u2019 effectiveness. But we shouldn\u2019t fool ourselves into thinking that adding a household finance class to a high school curriculum will in itself create knowledgeable consumers who can understand today\u2019s wide array of financial products.<\/p>\n\n\n\n
In some ways, the finding that financial education doesn\u2019t provide long-term payoffs is hardly surprising. After all, how much do you remember from your high school chemistry class? Unless you use chemistry at work, you probably don\u2019t recall much about ionic bonding. In the meta-analysis, even the most time-intensive programs \u2014 those with more than 24 hours of education and training, almost the length of a college course \u2014 had no discernible effects just two years later.<\/p>\n\n\n\n
It would be premature to conclude that all efforts at improving financial literacy are futile. But it is a fair conclusion that simply doing more of the training commonly used now will not produce significant results. So what else might we try? Although no approach offers a panacea, three types of efforts seem worthy of more attention. <\/p>\n\n\n\n
The first is what Professor Lynch, one of the authors of the meta-analysis, calls just-in-time education. Because learning decays quickly, it\u2019s best to provide assistance just before a decision is made. High school seniors should receive help in how to think about a student loan, and how to make sure that the education bought with the loan offers good prospects for repayment. Just-in-time education can be offered at other crucial moments \u2014 when taking out a mortgage or figuring out when to retire. But unless such education is compulsory, many of the consumers most in need of help don\u2019t take advantage of it. And we need to be sure not to confuse self-serving marketing with objective advice.<\/p>\n\n\n\n
Another approach is to offer simple rules of thumb to help people cope. Because few people can calculate how much they need to save for a comfortable retirement, it might help to offer simple guidelines like \u201cinvest as much as possible in your 401(k) plan,\u201d \u201csave 15 percent of your income\u201d or \u201cget a 15-year mortgage if you are over 50.\u201d <\/p>\n\n\n\n