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Here are the annotated bibliographies I prepared from 2016-01-14 to 2016-02-22 for my online course in development, Introduction to American Personal Financial Literacy. This course will be completed in April 2016.
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All Annotated Bibliographies by Richard Thripp [6 Credit Hours]
EDP 6936 Section 0M01: Spring 2016 – UCF, Dr. Michele Gill
Completed February 22, 2016
a) Citation [PROJECT # 1, FINANCIAL LITERACY COURSE, CITATION # 1]
Mandell, L., & Klein, L. S. (2007). Motivation and financial literacy. Financial Services Review, 16(2), 105–116.
b) Abstract:
This paper examines the hypothesis that low financial literacy scores among young adults, even after they have taken a course in personal finance, is related to a lack of motivation to learn or retain these skills. The research is based upon the latest national Jump$tart survey of high school seniors and uses financial literacy scores after controlling for socioeconomic, demographic, and aspirational characteristics that have historically predicted these scores. We analyze the relation of financial literacy scores to responses to three questions designed to measure motivation to be financially literate. We found that the motivational variables significantly increased our ability to explain differences in financial literacy.
c) Relation to Capstone Project # 1, Financial Literacy Course:
This paper reviews and interprets the results of financial literacy surveys developed by the Jump$tart Coalition for Personal Financial Literacy and administered to high school seniors 1997–2006. Lucey (2005) has established, with reservations, that these surveys have reliability and validity that is adequate for many purposes. However, the Jump$tart surveys remain among the best self-report instruments we have to measure personal financial literacy, which is unfortunate because there is much room for improvement.
Importantly, Mandell and Klein (2007) conclude that motivation is a key factor in explaining levels of financial literacy. The authors reflect on the fact that high school classes do not measurably improve financial literacy (pp. 113–114), relating this to results from the Jump$tart surveys indicating that students who talk about finances with their parents, have stocks in their name, or possess credit cards are not more financially literate than their peers (pp. 108–109). The authors lament that high school students might be more motivated if they fully understood the many social safety nets that have been removed from American life (pp. 109), such as the consumer protections that were dissolved under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Moreover, the authors cite research indicating that “targeted financial education” is efficacious, such as pre-purchase or credit counseling given to people before borrowing for a mortgage, student loan, auto loan, etc. (pp. 112–113). The implication here is that these consumers are motivated to apply what they have learned, rather than seeing it as something nebulous that does not apply to them. This is very important for my course; capturing students’ interest and conveying personal relevance will be essential to my course design, which will incorporate motivational theories from the ALIMA program.
d) Key Insights:
See above for key insights (combined with Relation to Capstone Project # 1 section).
e) Further Reading:
Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89, 309–322.
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a) Citation [PROJECT # 1, FINANCIAL LITERACY COURSE, CITATION # 2]
Lucey, T. A., & Maxwell, S. A. (2011). Teaching mathematical connections to financial literacy in grades K–8: Clarifying the issues. Investigations in Mathematics Learning, 3(3), 46–65.
b) Abstract:
Most teacher education programs do not incorporate financial education preparations into courses required for early childhood, elementary education, and middle level candidates. The authors of this manuscript explore the reasons for this omission, particularly the mathematics education component, and clarify the issues surrounding this decision. They argue that financial education represents a valid curriculum concern and that inadequate personal finance literacy and mathematics standards exist. In addition, they discuss that elementary and middle schoolteachers generally lack understandings of the content, that teacher preparations inadequately educate teachers to teach about this content, and that a pedagogical shift is needed to affect meaningful change. They call for revisions of traditional mathematics pedagogies to address this challenge so that K–8 students may begin to exercise the responsibility for prudent financial decision-making that they will need in future years.
c) Relation to Capstone Project # 1, Financial Literacy Course:
Lucey and Maxwell (2011) contend that the methods American teachers use for teaching personal finance to elementary and middle school children are pathetic. For example, teachers tend to include decimalized dollar amounts such as $1.45 in their lessons to K–2 students, even though the requisite mathematical skills are not introduced until grade 4 at earliest (pp. 48)! According to the authors, this is both an issue of curriculum development and teacher education. Many textbooks “tack on” dollar figures to mathematical problems without any financial context (pp. 51–52). Elementary teachers are especially likely to lack the education and confidence to effectively teach financial skills to their students.
Being that my course under development is titled Introduction to American Personal Financial Literacy, I will not be assuming my students have extensive background knowledge. Therefore, much of the course materials and strategies used in my course will be of remedial level. It is thus appropriate to incorporate empirically supported suggestions for middle and high school education, and perhaps even elementary school. This article provides many useful ideas and several tables with topical suggestions (pp. 56) and suggested complexity–grade-level interactions (pp. 57–58).
d) Key Insights:
• Matching the needs of the learners is important and is perpetually difficult when developing “one-size-fits-all curricula” (p. 55).
• Current teachers learned mathematics in the 1980s and 1990s, when mathematical instruction was more basic, according to the authors (p. 49). Therefore, the authors allege these teachers did not learn the requisite background information to teach personal finance, at least during their primary and secondary educations.
• The authors say that “a pedagogical shift is needed to affect meaningful change” (p. 46). I love how the authors have attacked this issue from many sides, particularly with their focuses on better textbooks and improved teacher education.
e) Further Reading:
Way, W. L., & Holden, K. C., (2009). Teachers’ background and capacity to teach personal finance: A national study. Journal of Financial Counseling and Planning, 20(2), 64–78.
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a) Citation [PROJECT # 1, FINANCIAL LITERACY COURSE, CITATION # 3]
Seyedian, M., & Yi, T. D. (2011). Improving financial literacy of college students: A cross-sectional analysis. College Student Journal, 45(1), 177–189.
b) Abstract:
Financial literacy has become more important than ever as an increasing number of college students are relying on credit cards to finance their education. We examine whether college students are knowledgeable about finance, whether they improve upon that knowledge, and whether their demographic profile, financial backgrounds, and engagement/motivation level affect their financial knowledge and learning. Recruiting students who voluntarily participated in the pre- and post-tests of personal finance and managerial finance, and using multiple regression and the results of student course evaluations, we find that using finance courses positively affect the students’ financial literacy. Moreover, we find that gender difference is found only in the pre-test of managerial finance, that female students significantly improved learning, and that students in the upper level of finance courses overall outperformed those in the lower level in both tests of personal finance and managerial finance. We also find that students’ job experiences, financial background, attitude and behavior, and class participation and motivation determine the amount of their learning.
c) Relation to Capstone Project # 1, Financial Literacy Course:
Sevedian and Yi (2011) administered the entire Jump$tart Coalition financial literacy survey (30 questions) to about 50 undergraduate students, as well as eight questions relating to managerial finance. This was done at the beginning and end of the semester in managerial finance or portfolio management college courses. The sample was primarily Caucasian (80%) at SUNY Fredonia, a campus in the New York University system.
In my opinion, there are quite a few issues with the authors’ methods, such as the loss of 15 students between pre- and post-test (64 to 49), their conflation of results from three separate undergraduate courses, the use of a volunteer sample, and a tendency to cherry-pick data. Nevertheless, several results emerged which I believe will be valuable to my course development, which will be explored in the Key Insights section (below).
d) Key Insights:
• One question in the Jump$tart survey asks whether an elderly person with only Social Security income and little savings will have a hard time getting by, or will have it fairly easy by simply reducing expenses. Sevedian and Yi found that students who said such an elderly person would have a hard time performed much better on other questions relating to personal finance (p. 186). Therefore, developing realistic financial beliefs may be correlated with improved financial literacy.
• Owning a savings account was correlated with better performance on the authors’ pre-test of managerial finance (p. 186). Perhaps opening the savings account was an educating experience for these students? Did the banker advise them of the benefits of a savings account, or did they open the account online and read bank webpages first? Who knows? It is important to note the current climate of very low interest rates on savings accounts. Basically, savings accounts in the post-2008 era function basically as psychological devices; very little money is earned versus keeping your money in a checking account. How does this factor in?
• A comparison of post-test results reveals that students who were in BUAD 320(B), Managerial Finance II, performed better than students in BUAD 320(A), Managerial Finance I (pp. 187–188). Students in the second course also participated more and expected higher grades, according to the authors. They believe that participation and effort is positively correlated with financial literacy, at least with respect to financial courses.
e) Further Reading:
Roberts, J. A., & Jones, E. (2001). Money attitudes, credit card use, and compulsive buying among American college students. Journal of Consumer Affairs, 35, 213–240.
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a) Citation [PROJECT # 2, COMPANION PAPER, CITATION # 1]
Lucey, T. A. (2005). Assessing the reliability and validity of the Jump$tart survey of financial literacy. Journal of Family and Economic Issues, 26(2), 283–294. http://dx.doi.org/10.1007/s10834-005-3526-8
b) Abstract:
Financial education represents an area of popular interest, owing largely to the Jump$tart surveys of financial literacy. However, while the surveys represent indicators of financial knowledge among high school seniors, these measures have not been statistically validated. This article describes an assessment of the surveys’ reliability (internal consistency), and validity. It reports a moderately high degree of consistency overall, however, discloses low to moderate internal consistencies among subscales. It also finds significant response differences to one quarter of comparable items between surveys. The researcher observes challenges to affirming the surveys’ validity and offers statistics suggesting social bias among survey items. He calls for further research into measures of financial literacy.
c) Relation to Capstone Project # 2, Companion Paper:
From my initial readings, the Jump$tart survey kept coming up again and again in financial literacy research—it is obviously considered an important instrument for measuring personal financial knowledge. I looked for articles lending credibility to the survey, and while there were distressingly few, this article is strong and refreshingly skeptical. The Jump$tart survey is revised approximately biennially, and while its empirical support is somewhat tenuous, it appears to be the “state of the art,” so to speak, among survey instruments for personal financial literacy. Lucey (2005) finds that the survey overall is too short, having only 30 items when the Jump$tart Coalition itself recognizes 49 financial benchmarks, and has low internal subscale consistency, but adequate internal consistency and inter-correlation consistency. As for validity, only face and content validity is apparent. While the coalition’s benchmarks might be more useful for curriculum development in my course, I will also be using this survey, or at least some aspects of it.
d) Key Insights:
• Lucey laments that congruent validity is impossible to determine; older financial literacy instruments have not been evaluated for reliability or validity, so there is nothing to compare the Jump$tart survey to (p. 290). Obviously, this field is sorely underdeveloped compared to others, such as motivational and personality instruments.
• Relating survey items to practical life may improve predictive validity (p. 290). This reminds me of a discussion from the graduate course, DEP 5057: Developmental Psychology, at UCF in spring 2015 with Prof. Valerie Sims. This discussion involved the Heinz dilemma, where Sims spoke of research indicating that when high school students were presented with a more realistic dilemma about having casual sex, a majority of the students who displayed high levels of moral reasoning with the Heinz dilemma regressed with regard to the more realistic scenario (e.g., they advocated having casual sex without telling parents). Could a similar phenomenon exist with respect to personal finance? Perhaps if a survey instrument included realistic questions, it may be more predictive? One possible question could be whether you should go to Disney World because your friends want you to go with them, but you have to charge it to your credit card because you have no money in your checking account. This could be set up as a story, which might aid readers in rationalizing and justifying the bad financial decision. Realistic questions may have greater predictive validity for participants who engage in such rationalization in real life.
e) Further Reading:
Jump$tart Coalition (2000, April 9). Financial literacy declining among 12th graders, coalition urges states to include personal finance in curriculum standards. Retrieved March 9, 2002, from http://www.Jumpstart.org/upload/news.cfm?recordid=60.
NOTE: Relate to Mandell & Klein (2007): Including personal finance in curriculum standards might not work if students remain unmotivated! Suggesting that education is a panacea may not be accurate.
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a) Citation [PROJECT # 2, COMPANION PAPER, CITATION # 2]
Lindsey-Taliefero, D., Kelly, L., Brent, W., & Price, R. (2011). A review of Howard University’s financial literacy curriculum. American Journal of Business Education, 4(10), 73–84.
b) Abstract:
This article evaluates a financial literacy curriculum at the Howard University (HU) School of Business, by measuring the financial knowledge acquired after participating in a variety of programs. To evaluate the HU curriculum, the National