The NFEC’s commitment to conducting financial literacy research to gain a deeper understanding of personal finance topics helps the industry obtain empirical data and professional opinions about this important subject matter. Using demand- and supply-side surveys, research, and think tanks, the NFEC gathers data and illuminates best practices to share with others in the financial literacy industry.
The objective of the NFEC in gathering these data is to share best practices with the financial education industry, keep media outlets informed of the latest information, and help individuals improve their financial capabilities. Below you will find the NFEC’s financial literacy research and best practices data.
The NFEC’s financial literacy research is focused on 3 core areas: 1) Development of standards and best practices for teaching personal finance, 2) Establishing educational outcomes and clear educational barometers for learners, 3) Identify and open source overall strategies that guide financial literacy initiatives.
Financial Educator Standards
Framework for Teaching Personal Finance
Effective educators help learners achieve better outcomes. Numerous studies have shown that students taught by highly-qualified educators accomplish more positive outcomes than less-qualified instructors teaching financial literacy.
The NFEC teamed with the Danielson Group, developers of the most widely referenced educator standards in the industry. This collaboration yielded the first and only national standards for financial educators – the Framework for Teaching Personal Finance. The Framework defines the skill sets distinguished educators should possess and performance levels that define optimal educator capabilities.
The NFEC developed the Framework for Teaching Personal Finance to share benchmarks with the financial education industry and provides clear performance criteria. The qualifications set forth in the Framework give public assurance that financial education instructors are held to the highest standards of practice.
Financial Education Student Standards
Financial Literacy Learner Standards
The NFEC made the Framework and Standards available to the public to provide educators and learners with guidelines for improving financial capabilities. Many national financial literacy tests demonstrate financial literacy levels are low. The overall purpose of the Framework is to improve the quality and enhance the impact of financial literacy instruction. We plan to issue annual updates as testing results and feedback are assessed.
During the course of developing over 400 hours of curriculum, the NFEC’s development team noticed a major problem with existing financial education standards: existing industry guidelines did not align with students’ cognitive abilities to evaluate key concepts. Therefore NFEC created new industry standards that align with the cognitive abilities of individual students, learning preferences at various ages, and real-world practicability. A qualified team of more than 30 financial professionals was consulted to ensure this alignment.
In the Financial Literacy Framework and Standards below you will find big ideas, supporting standards, and essential questions. The big ideas provide the context of what students should learn and demonstrate relationships between critical components. The standards describe what is necessary to achieve the big ideas. These pieces work together to help educators and administration plan clear learning outcomes for participants.
Global Financial Literacy Research & Strategy
National Financial Capability Strategy
The National Financial Capability Strategy report presents some of the overall strategies identified by various agencies to guide nationwide financial literacy promotion. From our analysis three common themes emerged that might usefully underpin national standards for promoting financial literacy.
The NFEC analyzed 47 recent proceedings documents, agency reports, conference presentations, and peer-reviewed research articles to clarify key points of agreement and topics for future research. Materials from the U.S. plus five other countries, along with documents from the International Forum for Investor Education (IFIE), International Monetary Fund (IMF), National Financial Educators Council, Organisation for Economic Co-operation and Development (OECD), and World Bank were reviewed for this analysis.
To further the financial literacy movement and promote best practices among the industry, the NFEC has open-sourced the research on which its business model is based. We encourage other organizations to adopt best practices outlined in this report to help propel the financial literacy movement beyond the tipping point.