What works to improve people’s financial capability?

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Evidence Summary
April 2023

Limited but strong evidence supports financial capability interventions.

Studies with low-income populations find that financial capability interventions lead to numerous positive outcomes such as increased income and savings, better job placement and retention, higher credit scores, and progress toward financial self-sufficiency.

Certain characteristics of financial capability interventions can enhance their effectiveness.

  • Bundled or integrated interventions may be more effective than a single intervention.
  • Pairing interventions with trauma-informed peer support enhances effectiveness.
  • Interventions are most effective when tied to specific financial decisions so that participants immediately implement and retain their gained knowledge.
  • Interventions show the most promising results when they have a high intensity and are targeted toward a specific population group.
  • The use of smartphone applications for financial education may lead to positive financial behaviors.

However, there are some key limitations.

  • The positive effects of financial capability interventions decay over time.
  • Among immigrants, financial pressure from family members in their countries of origin as well as previously established spending habits may lead to difficulty implementing the knowledge gained from financial education.
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