Institutes of higher learning across the U.S. are adding financial wellness programs in order to educate their students about personal finance challenges. The reason for this push resides in the disarray universities find among their students. The 2017 National Report Card on State Efforts to Improve Financial Literacy in High Schools found that most states were not effective at producing financially literate graduates. In fact, 30% of states got a grade of D or F, while only 10% got an A. This means those incoming freshmen are woefully uneducated in terms of personal finances.
The lack of education leads directly to student stress concerning finances. The 2015 National Student Financial Wellness Study determined that 70% of college students feel stressed about their personal finances, with at least half worried about day-to-day expenses.
To make matters worse, the financial stresses of students bleeds into the school week, causing issues for educators. The same study found that nearly a third of students sometimes neglected doing schoolwork due to worry about the money they owed, 30% reduced their class load due to debt, 16% took a break from taking college classes, and 13% transferred to another institution.
The benefits of adding a financial wellness initiative for students to address financial stress are significant. However, not all financial wellness initiatives are created equally. That's why it is important to consider a needs assessment, specific goals, and performance assessments, and to create a 12-month promotional plan. By planning and executing a well-thought-out initiative, you can impact student participation and end results.
Financial wellness is a broad term that can cover everything from savings to retirement to student loan debt to credit scores. Universities that have successful financial wellness initiatives determine what their students need and want so they can create a plan that covers those specific topics.
According to surveys concerning financial education, conducting a needs assessment is a good indicator of a successful program. It is seen as the first step of a successful program that can empower your students with the knowledge they need to be successful.
Too many student initiatives provide general financial information rather than specific information aimed at groups based on age, income level, life stage, and goals. Plans with such general information lead to low participation and disheartening results.
To determine what your students want and need in a financial wellness initiative, you can consider both subjective and objective measures. Objective financial measures can include such things as debt, savings, and credit score. More subjective measures can include self-reported stress levels concerning personal finances and how a student feels about saving vs. spending.
"Specific Goal" and a "Performance Assessment"
The point of the needs assessment is to help your learning institution determine the goal of the initiative. The ultimate goal of a financial wellness program is to increase your student's overall financial health. However, specific short-term and long-term goals will be needed to help your students balance today's stressors with tomorrow's needs. These goals need to be both specific and measurable.
An assessment should then be created to determine if the financial wellness initiative's performance is meeting the stated goals. The assessment should do two things:
- Measure the engagement level of students
- Measure the progress toward the indicated goals
By assessing the financial wellness initiative, you can quickly determine any issues and make corrective changes to get your program on track.
"12-Month Promotional Plan"
Even the best financial wellness initiative will fail if students do not know it exists. The American Institute of Certified Public Accountants found that although most college students knew that personal financial management was an important skill, less than a quarter sought out information pertaining to their own financial well-being. Unfortunately, many students are unaware if their institution even offers financial education initiatives.
The way to combat this is to have a consistent promotional strategy that keeps the financial wellness initiative front-of-mind. However, most students do not want to be flooded with new communications, so it is important to find ways to incorporate relevant content about the program into current communications.
When considering communications with your students, be sure to add your own messaging to the campaigns. Students that see vendor-produced materials often view it as advertising rather than information they need in their own lives.
Most importantly, remember that adding a financial wellness initiative is more like a marathon than a sprint. Studies have shown that programs are more successful the longer they have been in place. In fact, for many programs, it can take up to five years to be successful.
Findings from Fidelity informed by data gathered through their online Money Checkup tool indicate that 88% of users are not confident about their financial future and over half do not have good saving and spending habits. These numbers suggest that students need help creating a healthy personal financial picture. As you create a financial wellness initiative to do so, keep these three points in mind. Doing so can help you produce happy, successful, financially secure students.