Financial fitness is a goal for many people, but achieving fitness in terms of money management may require a combination of financial education, coaching, and financial access. After reviewing the components of financial fitness, this session will provide an overview of measures of financial capability and well-being, as well as practical applications of program measures in the field. The session will include discussion, interactive polling and Q&A. To register, join & for resources: https://learn.extension.org/events/2591/ Speaker: Dr. J. Michael Collins

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https://learn.extension.org/events/2591
What is Financial Fitness & How is it Measured?

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MFLN Intro
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4. Dr. J. Michael Collins
•Faculty Director at the Center for Financial Security at
the University of Wisconsin.
•Associate Professor at the La Follete School of Public
Affairs and at the School of Human Ecology.
•Family Economics Specialist for UW-Extension and
Cooperative Extension
•Collins studies consumer decision-making in the
financial marketplace, including the role of public policy
in influencing credit, savings and investment choices.
Today’s Presenter
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What is Financial Fitness
& How is it Measured?
Dr. J. Michael Collins,
University of Wisconsin-Madison
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8. +
Time for a poll
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9. Common Goal
 Help people be “better off”
 Independence
 Control
 Stability
 How can people better manage the
resources they have to reach a
higher level of well-being?
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10. Ideal Outcomes
 Develop stronger financial skills
 Empower to adapt to new economic contexts
 Increased self-efficacy and self-control
 More focused attention and reduced
inattention
 Support planned, goal-driven financial
behaviors
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11. Challenge for Field
1. What are the outcomes?
2. What is the return on investment?
…costs and benefits
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12.  Measures we use all the time
 Weight or blood pressure
 Weight for monitoring heart function
 Weight for competing in diet competition
 Tests - use only sometimes
 MRI or blood draw
Both are important, but have different purposes and
uses
 Likely we are more focused on frequent “all the time” type measures
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Measuring as a Task

13. Pros Cons
Self Reported
Survey
Can be collected in
service delivery
Self-report bias; lack of
cooperation, especially for
follow-up—need incentives.
Credit
report/score
Widely used
Proprietary ; 'thin' files; slow
to change.
Account
balances
Directly observe
behavior; validity
Very “noisy” snapshot;
requires client consent
Public records Accessible
Low probability events;
uneven reporting.
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14. Three Legs of Financial Fitness
 Financial Literacy
 Knowing What to Do
 Financial Capability
 Skills to Do
 Financial Inclusion
 Opportunity to Do
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15.  Standardized measures?
 Health care, public health, nutrition
 Ex. Outcomes per health care expenditure
 Financial programs use wide range of
outcomes
 Common “yardsticks” will help. Two examples:
 Financial Capability Scale (behavior)
 Financial Well-being Scale (subjective)
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Measuring Outcomes

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17. Financial Capability Scale I
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18. Financial Capability Scale II
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22. Financial Capability Scale Components: Change Over Time
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Time for a poll
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24. Financial Wellbeing
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25. Social
and
Economic
Environment
Personality
& attitudes
Decision context
Knowledge
& skills
Financial
well-being
Behavior
&
Actions
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26. Financial Well-being I
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27. Financial Well-being II
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28. Scoring the Financial
Well-being Scale…
Using the Look Up Table
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30.  No measure is perfect
 Some measures are better than none
 Don’t let the perfect be the enemy of the good.
 Balancing strategies for collecting data
 Self reported data AND Administrative data
 Not about ‘Winners’ and ‘Losers’
 Measures are complements not substitutes
 Expect constant improvements and refinements
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Moving Forward

31. Illustrative Studies…
 Retirement Savings Education: Quasi-experiment with employees:
increased retirement deferrals by 47 percent ($30 / month)
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32. High School Financial Education:
90-Day Loan Delinquency Rate by Graduation Year
Before & After State Mandate
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34. +
Time for a poll
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35. What’s Next?
1. Build Measurement Capacity
 Training & education
 Developing systems
1. Deploy Technology
 Software, web-based services
1. Practice: Fidelity, Consistency & Quality
 Need “rules” (and enforcement)
 Context/process, wording, mode, timing
1. Standardization & Aggregation
 Across time, program and geography
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36. Homework
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 Try the Financial Capability Scale. What is your score (0-8)?
http://fyi.uwex.edu/financialcoaching/measures/
 Try the Financial Well-being Scale. Calculate your score (with
the look-up table)
http://www.consumerfinance.gov/data-research/research-reports/financial-we
 How could you use either scale in your own work with clients?

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Resources
 Financial Capability Scale Brief
 http://fyi.uwex.edu/financialcoaching/files/2013/07/CFS_Research_Outco
 Financial Well-being Scale Brief
 http://www.consumerfinance.gov/financial-well-being
 Center for Financial Security
 https://cfs.wisc.edu/
 http://fyi.uwex.edu/financialcoaching/

39. What is one significant thing
you learned today?
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40. Connect with MFLN Personal Finance Online!
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MFLN Personal Finance @MFLNPF
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41. MFLN Intro
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42. Evaluation and
Continuing Education Credits/Certificate
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MFLN Personal Finance is offering 1.5 credits for AFC-
credentialed participants through AFCPE and CPFC-credentialed
participants through FinCert for today’s webinar.
Please complete the post-test for today’s session at:
https://vte.co1.qualtrics.com/SE/?SID=SV_8eJaDnO5RxbuNyl
Must pass post-test with an 80% or higher to receive certificate.
Please complete the evaluation after the last VLE event you attend:
https://vte.co1.qualtrics.com/jfe/form/SV_d0aEDkKqPE2lJmR

43. Personal Finance Upcoming Events
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VLE Session 2: Positive Personality Traits of Financially
Fit People
• Date: Wednesday, June 15, 2016
• Time: 11 Eastern
• Location: learn.extension.org/events/2592
VLE Session 3: Wealth Building With Savings, Investing
& Windfalls
• Date: Thursday, June 16, 2016
• Time: 11 Eastern
• Location: learn.extension.org/events/2593

44. VLE Wrap Up Discussion
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• Thursday, June 16, 2016 from 1-1:30pm Eastern
• https://learn.extension.org/events/2594
Join us for an interactive discussion of the
resources, tools and quizzes shared during the
Virtual Learning Event, as well as your own
experience as practitioners.
Connecting with a mic-enabled headset is
encouraged!

45. www.extension.org/62581
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