How Do You Feel About Teaching Money Matters?

Economic stability and security of families is one of the initiatives of Extension. In addition, the plight of young children and youth at risk are National Initiatives with a resource management component involving families with children of various age groups. All families, especially limited-resource and resource-stressed families, are affected by the changes in the economy. Further, when unemployment rates rise, resulting in a decreasing opportunity to earn money, families with fewer resources are usually affected first and feel the impact longest.

Management skills can make a difference in how well families cope with unfavorable economic conditions. Limited-resource families are those in which the heads of household have less than a high school education or whose income falls below the poverty line ($14,350 for 1993 with a family of four).1 Resource-stressed families may have adequate incomes, but other stressors affect their use of income. Stressors can include being a single-parent household, or having a chronically ill parent or child. Financial management skills can also help families with sufficient resources who have a temporary decrease in income. Extension agents are in a position to help such families if they have the necessary financial management knowledge and skills themselves. This study was designed to determine the importance and self- perceived ability of agents to teach in seven areas of family financial management.

The population for the study was 96 home economics Extension agents in Pennsylvania. Eight sections were included in the questionnaire to collect data in the areas of financial planning, credit, retirement, insurance, estate planning, investments, legal issues, and demographic characteristics. The items relative to these seven areas were measured on a Likert-type scale. The importance scale ranged from 1 "not important" to 5 "very important." The ability scale ranged from 1 "not able" to 5 "very highly able." The questionnaire was reviewed by a panel of four experts (faculty and specialists) to establish face and content validity. Data were collected through a mail survey. A total of 63 agents responded (66%). A post-hoc reliability analysis indicated the questionnaire was reliable. Data were analyzed using descriptive statistics.

The majority of agents were female (95%), middle-aged (44 years), and married (71%). A majority had graduate degrees (54%). On an average, agents had 18 years of work experience.

Figure 1 shows the importance and self-perceived ability to teach ratings for the seven financial management competencies showing agents rated all seven competencies as important. Competency in estate planning was rated highest (4.35) for importance followed by retirement (4.32), insurance (4.18), financial planning (4.17), legal issues (4.15), credit (4.07), and investment (3.88). The agents perceived that they were somewhat able to teach in the areas of investments (1.80), estate planning (1.86), legal issues (1.89), insurance (2.00), and retirement (2.32). However, agents perceived they were moderately able to teach the competencies in the areas of financial planning (3.34) and credit (2.57).

Figure 1. Agents' perceptions of importance and ability rating.

Although the agents perceived all seven areas of financial management were important, it appears they're equipped to help households and families only in the areas of financial planning and credit. The financial planning section of the questionnaire included statements about the basics of managing money such as developing a savings/spending plan, setting spending goals, managing credit, understanding potential earning capacity, savings, and communicating about money. These capabilities are fundamental to managing money regardless of income.

Agents believed they were insufficiently prepared to teach in the areas of retirement, insurance, estate planning, investments, and legal issues. While families below or near poverty level aren't likely to be concerned about investments or estate planning, they may have significant needs related to insurance, retirement, and legal issues. The perception of insufficient knowledge and ability in these five areas suggests that inservice education could help Pennsylvania agents develop the needed skills to teach limited-resource families.

1. National Archives and Records Administration, "Annual Update of the HHS Poverty Guidelines," Federal Register, LVIII (February 12, 1993), 8287-89.