Is “Just In Time” Financial Education Enough?
Oct 5, 2015
The concept of “just in time” financial education is based on the idea that consumers can benefit greatly from receiving financial education when it is most relevant to them. Said another way, the “just in time” approach provides educational information to consumers in real-time as they make significant financial decisions. This approach, then, would suggest that consumers receive education on buying a home when they are, indeed, in the process of buying a home, as one example. It is an intriguing approach.
The emergence of just in time (JIT) financial education as a viable model to improve the financial capability of consumers has sparked much discussion in the financial education field and among providers of employee wellness programs. The merits of JIT financial education are being weighed against more traditional, holistic approaches to financial education where people accumulate knowledge over time. It is interesting to see that a growing number of people are getting on board with JIT financial education as an alternative to more holistic approaches, but are the right conclusions being drawn?
There is no question that JIT financial education techniques can be an important part of holistic and integrated financial education programs, but they are only a part. JIT financial education efforts should support and reinforce more comprehensive programs to improve the financial health and well-being of consumers. Why? There is a risk that stands alone JIT financial education programs are not robust enough or lack sufficient context about individuals to account for the complexities and uniqueness of our financial lives.
Looking at this another way, it is important to remember that personal finance is personal. The topics are intricately related. A single financial decision can have a domino effect across other aspects of our financial lives. JIT financial education by itself may not be able to account for these many dimensions or the overall context of our overall financial profiles in which we need to make financial decisions in real-time.
Financial education needs to remain as an ever-present force in consumers lives that not only helps them improve their financial capability over their lifetime, but also includes JIT education as a final line of defense to protect consumers at the time they make important financial decisions.
JIT in Practice
One of LifeCents’s financial education initiatives was first implemented over three years ago and provides JIT financial education to consumers who are dealing with debt in collections. Consumers who participate in the program “unlock” special debt reduction offers. The results or outcomes have been extraordinary. The consumers participating in the program are paying more towards their debts than the consumers who are not exposed to financial education. As important, over 50% of the individuals who complete the incentivized JIT financial education portion of the initiative went on to access additional education even though there was no incentive tied to their continued participation. In other words, the JIT financial education initiative is being used not only to drive measurable short-term outcomes, but it also connects consumers to a more holistic and sustainable financial education program.
The Road Ahead for JIT Financial Education
One of the greatest challenges the financial education field and practitioners face today is the sobering reality that many consumers may not understand their own need for financial education or the benefits such education provides. A significant opportunity exists to shift the mindset of these consumers by demonstrating the value of financial education when making financial decisions in their everyday life and how it contributes to long-term wealth building. To realize this opportunity, consumers can benefit greatly from accessing JIT financial education in those “teachable moments;” however, this approach should not be mutually exclusive of the need to engage consumers before and after any financial decisions are made.
Financial education is a lifelong learning experience.