Financial Literacy Assessment Measures Key Educational Standards
In order to present a financial literacy campaign for maximum effect, conducting a financial literacy assessment to measure participants’ competencies before and after the campaign is a crucial step. The National Financial Educators Council (NFEC) offers just such an assessment to help ensure that campaigns evaluate all the elements that are important for success.
The NFEC has identified ten topic areas in which participants should become proficient in order to achieve basic financial competence: Credit and Debt, Accounts and Budgeting, Financial Psychology, Income, Skill Development, Business Relations and Networking, Risk Management, Investment, Long-term Planning, and Social Enterprise. The NFEC’s financial literacy test is carefully designed to assess participant comprehension and capability in each of these knowledge areas.
In addition to these essential money management topics, the NFEC’s financial literacy exam is constructed to measure people’s positioning along the continuum of readiness to take action. This assessment of readiness includes measuring each of the following:
- Motivation: How motivated are the participants to learn about money? The test measures people’s understanding of how money affects their day-to-day lives and potential futures, and whether they relate personal finance knowledge to their ability to reach their dreams and goals.
- Knowledge: As noted above, this financial literacy quiz measures participant knowledge across the full range of key content areas.
- Recognition of first steps: The NFEC’s test is different from other assessments because it is not restricted to just measuring knowledge. The organization believes that a sound financial literacy program must also teach participants to recognize the first steps toward accomplishing their financial goals, and give them the confidence and intention to take initial action.
All these pieces are indispensable to accurately measuring the financial capabilities of the target audience for a financial literacy initiative. Learn more about the NFEC financial literacy test.