Press

Press Releases
Financial Well-Being Scale Available to Prove the Effectiveness of Workplace Financial Education Programs, July 25, 2006, PFEEF

Click here to download this article (PDF).

The Financial Well-Being scale is now available to measure the effectiveness of financial education and information programs provided employees. Human resources directors, financial education providers and researchers may use the scale with employees and clients.

The non-profit Personal Finance Employee Education Foundation, Inc. recommends employers provide employees access to high quality basic financial education that increases financial literacy and changes employees' personal financial behaviors so financial distress decreases and financial well-being improves. Why? Because research demonstrates that this improves the employer's profits as well as the financial lives of employees.

Nearly twenty years in development, the valid and reliable 8-question FWB scale measures financial distress and financial well-being. An article describing the FWB scale appears in the current issue (Volume 17, number 1) of the prestigious academic journal Financial Counseling and Planning (http://www.afcpe.org).

The key question today in workplace financial education is "How effective is the financial education program?" Stated another way "What is the employer's financial education program accomplishing?" Most financial education providers do not know. And employers don't know either.

How does one know when a financial education program is successful? The answer: Measure the outcomes!

A good workplace financial education program surely motivates employees to enroll in the employer's 401(k) retirement program. It helps employees save enough money so they might later enjoy a financially successful retirement. It educates employees on how to wisely invest. None of these outcomes, however, can occur without practicing good basic financial behaviors.

"The most important aspect of a good financial education program," says Dr. Tom Garman, President of PFEEF, "is that it helps people practice good financial behaviors that over time result in positive changes in their financial lives." The changes include increases in assets, decreases in liabilities, increases in net worth, decreases in financial distress, increases in financial well-being, being on track for a financially successful retirement, and being prepared to legally transfer assets to beneficiaries.

People can get ahead financially only by sacrificing some current spending to save and invest and by practicing good financial behaviors. On your side working for you, instead of against you, will be compound interest earnings on savings accounts and retirement funds (instead of rising credit card balances) and the favorable effects of inflation on rising stock market prices and growing home equity (instead of price rises on a home not yet purchased).

The Financial Well-Being scale measures the key outcomes of a single factor: Financial distress/financial well-being. The FWB scale, derived from dozens of questions asked in many research studies conducted over almost twenty years, is accurate and reliable. To use the Financial Well-Being scale, contact the Personal Finance Employee Education Foundation, Inc. (http://www.PersonalFinanceFoundation.org).

Human Resources executives may use the Personal Financial Well-Being scale to do the research in one day to make the business case for more financial literacy to improve company profits. The Personal Finance Employee Education Foundation, Inc. subsidizes the employer's cost of conducting research on financial education and the employer's return on investment.

Click here to download this article (PDF).