Syndicate content

financial education

How to Take Control of your Personal Finances

Rekha Reddy's picture


​Many of our aspirations revolve around improving our personal finances—keeping better track of spending, saving towards a goal or perhaps getting out of debt.  How can we work towards these goals and follow through on these changes? 

Increasing the Impact of Financial Education: Approaches to Designing Financial Education Programs

Andrej Popovic's picture



Recent evaluations of a number of worldwide financial education programs reported widely varied outcomes. While some found evidence of effectiveness, others reported mixed or no evidence. Yet an increasing number of developing countries are putting financial education strategies in place or are expanding financial education programs. The quality of design of such strategies and programs is therefore crucial.

Financial education programs can be ad hoc targeted interventions, aimed at addressing specific financial education gaps, or they can be more comprehensive approaches through financial education or literacy strategies that aim to address a number of priorities. Regardless of the approach – which depends on the local context – financial education programs have a higher likelihood of greater positive impact if they are based on reliable diagnostic tools and focused on clearly defined and sequenced priorities.
 
Over the past two years, the Financial Inclusion and Consumer Protection team at the World Bank Group has conducted substantial technical and diagnostic work in the area of responsible finance. For example, we have developed methodologies for financial capability surveys and impact evaluation, and we have conducted a series of diagnostic reviews in the area of consumer protection and financial literacy on a global scale.

Til Debt Do Us Part: South African Soap Opera & Financial Education

Uwimana Basaninyenzi's picture

Will Maletsatsi take the necessary steps to get out of debt and successfully manage her finances in the future? This is the central question posed in Scandal, a South African soap opera that is the subject of a new World Bank Policy Research Working Paper. Maletsatsi, the main character in this show, is in a real bind. After borrowing an excessive amount of money and gambling away her fortunes, she is forced to confess the extent of her debt to family and friends. In one scene, her daughter convinces her to negotiate lower monthly payments with a local furniture store. The store eventually agrees to extend the loan period, but her interest rate goes up and she starts to ignore other bills, leaving them unopened and unpaid. A well-intentioned woman, you can’t help but sympathize with Maletsatsi, who was only trying to create a beautiful home for her husband and family. It is through this emotional connection that television viewers are not only able to relate to the main character’s dilemma, but are also able to share Maletsatsi’s joy as she learns the rules of sound financial management and takes control of her debt.

Can mainstream media help improve financial decisions?

Gunhild Berg's picture



Financial education is important, yet there is a considerable knowledge gap in determining how best to deliver it. Recently, the literature on careful evaluations of financial education has started to move away from classroom based interventions to more innovative delivery mechanisms such as videos, DVDs, and mainstream media. The advantage of entertainment media – television and radio – is that it offers a broad outreach since nearly every household nowadays has a TV and also a captive audience that establishes emotional connections with the show and closely follows the behavior of their favorite actors. Given that entertainment media has been shown to be successful at improving social behavior in the health and education fields, an interesting research question is whether it can also be used for positively influencing financial knowledge and behavior.

An analogy about cars, trust and financial capability

Siegfried Zottel's picture

Imagine you need a car to commute long distances to your workplace or the closest supermarket, to visit your parents and to bring your child to school. Therefore, you want to spend the money you have been able to put aside on a large purchase: a new and reliable car.  However, you do nFinancial education enables the unbanked to participate in financial markets.  (Credit: The Advocacy Project, Flickr Creative Commons)ot know how to drive, nor how do you have even a basic understanding of any technical aspects of a car, not to mention any knowledge about how to maintain a car.
Also, imagine that everything you have heard so far about car dealers from your family, friends and neighbors is that they have a very bad attitude, do not act in your best interest and try to sell you overpriced vehicles with hidden fees and features you do not need. Given your lack of knowledge of how to choose and use a car and your lack of trust, would you still feel confident about approaching a car dealer? Most probably not.

This analogy also applies to one’s participation in financial markets. Especially in developing economies, where most globally unbanked people live. If you do not have knowledge of features and risks associated with financial products, do not know how to choose and use these products, lack any basic understanding of inflation, interest rates and compound interest, it is unlikely that you will participate in financial markets, or that you will benefit from them if you do. A lack of trust in financial service providers will do the same.