The 800 Pound Gorilla
“The 800 Pound Gorilla in the Room”:
Changing College Students’ Spending and Savings Habits
Vicki J. Jobst
Benedictine University
5700 College Road
Lisle, IL 60532
vjobst@ben.edu
(630) 829-6455
Author Note. I would like to express appreciation for the financial support received by U.S.
Bank and the assistance received from James Ludema, PhD., Deborah Hockman, PhD., and
Sandra Gill, PhD. in the creation and critique of this manuscript.
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Abstract
The financial literacy course entitled “Managing Your Personal Spending and Savings”
was offered for the first time to all students at a private Midwestern university in the fall of 2008
and spring of 2009. A pilot study of the effectiveness of the course (independent variable) on
students’ spending and savings habits (dependent variable) was conducted by surveying course
participants at the beginning and ending of each course offering. The survey was quantitative
and qualitative. Students were asked to comment on the course to add depth to the quantitative
findings. 24 students responded to the Fall 2008 survey and 14 students answered the Spring
2009 questionnaire. Students in both semesters were asked about overdrawn checking accounts
and payment of credit card balances. The 14 students in the Spring 2009 course were also asked
to rate their money management skills and the effectiveness of course components on improving
their skills. The data collected by the surveys reports some improvement in the students’ actual
money management skills. Students also reported an increase in their ability to avoid overdrafts,
pay credit card bills on time and prioritize their spending as a result of the course. The course
components which were rated the most effective were those that required hands-on learning and
group support. This course gave all students the chance to begin addressing their ability to
manage money and confront the “800 pound gorilla in the room.”
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Introduction
In the current economic climate of global recession, the management of personal
spending and savings is more important that ever (McWilliams, 2008). As a result of the
recession, consumer spending has decreased and individuals have been saving at increasing rates.
The rate of personal savings in the United States increased from 35% in 2005 to 1.78% in 2008
and an average of 5.1% for January to May 2009 (U.S. Department of Commerce: Bureau of
Economic Analysis, 2009). The increase in personal savings occurred in reaction to the loss of
credit markets and jobs and declining real estate values. A more proactive method to promote
wise personal spending and savings choices is for educational organizations and institutions to
offer a course in financial literacy. The purpose of this paper is to describe the financial literacy
course offered by a private university in the Midwest and to discuss a quantitative and qualitative
analysis of pilot survey results from this course.
In a poll of 1,252 young adults between the ages of 23 and 28 taken by Lieberman
Research Worldwide on behalf of Charles Schwab, 36% of respondents said the most important
action to be taken by the federal government would be to create incentives for states to require
personal financial education in high school curriculum (Schwab, 2009). However, a university
may be a more appropriate setting for a financial literacy course, given the wider range of course
choices and the need for this information during the first year of college. Many college students
are handling money for the first time in their life and are not ready. A poll taken by Key Bank
and Harris Interactive found that 32 percent of 1,003 college students aged 18-24 admitted they
were not very prepared for managing their money on campus (Harris Interactive, 2006). “The
majority of college students do not (or rarely) budget their money. Only half of college students
The 800 Pound Gorilla
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paid their credit cards in full each month and 40% do not know their annual percentage rate of
their credit cards” (Murphy, Sept. 2005, p. 479).
In addition to credit card debt, many college students need student loans to complete their
education. Debt levels for students who graduated between 1993 and 2004 have more than
doubled (Supiano, 2008), most likely due to borrowing to meet rising tuition costs. According to
the American Institute of Certified Public Accountants (Feed the Pig website), “the average
student loan is $20,000, average credit card debt for college students is $4,088, 24% of college
students’ income is spent on debt payments, and college students have the second highest
personal bankruptcy rate in the nation.” Students may even need to withdraw from college to
earn money to repay their loans. Students who do complete their college education may have
credit ratings which prevent them from renting apartments. They may not have accumulated any
savings during college or have charged up to their credit limit and are unable to use their cards
(Muir, 2005).
Literature Review
Two major studies have been completed which assess the financial literacy knowledge of
undergraduate college students. Both studies report that students are lacking in this area and the
authors recommend an increase in financial literacy education.
Chan and Volpe (1998) assessed the financial literacy knowledge of 924 college students
with a 52 question survey. The survey was administered to 13 college campuses in California,
Florida, Kentucky, Massachusetts, Ohio and Pennsylvania. The public and private schools
attended by the students ranged from small community colleges to main and branch campuses of
large universities. 53% of the survey respondents were business majors and 36% were seniors
(the rest of the respondents were equally divided between freshman, sophomore, junior and
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graduate status). Most of the students had two years of work experience and 55.6% were female.
On the survey, 36 multiple choice questions tested the students’ knowledge of personal finance,
8 questions asked about attitude and behaviors towards personal finance, and the remaining 8
questions were demographic in nature. The overall mean score on the personal finance questions
was 53%. Non-business majors, women, students with a lower class rank, and students under the
age 30 with little work experience scored lower on the questions. The authors of the study
suggested that “there is a systematic lack of personal finance education in our educational
system, resulting in serious financial illiteracy in the American public.”
In 2005, Avard, Manton, English, and Walker surveyed 407 students in the Freshman
English 101, College Reading and Writing course at Texas A&M University-Commerce. The
questionnaire consisted of 20 multiple choice questions covering basic knowledge of financial
issues. The average score was 34.8%, the highest test score was 80% (one student), and the
lowest test score was 0% (six students). The suggestions from this study included offering a
financial literacy college entrance exam and remedial course or incorporating a general education
requirement for a personal financial literacy course into the curriculum.
Research and Methodology
In response to the need for financial literacy courses at the college level, a small private
Midwestern university began offering “Managing Your Personal Spending and Savings” in the
fall of 2008. The course is open to all students, but course topics are geared to college freshmen.
It is an eight-week, two-credit hour evening course. The course curriculum combines onsite,
online, and service learning.
The university partnered with four outside organizations to provide the curriculum for the
course. The partners include an online financial literacy provider (The EDSA Group) and the
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American Institute of Certified Public Accountants (A.I.C.P.A.) to provide the “text” for the
class; Wealth Watchers International, to provide personal spending journals for students to track
expenses and to conduct financial counseling discussions; and Junior Achievement, to provide
service learning experiences for the class. After four weeks of class time, students travel to local
middle schools to present lessons from Junior Achievement’s Economics for Success program.
Also included in the course are weekly online discussions, review of online money management
resources, and written reflections due at the end of the course.
As a result of the course, students are able to:

Create a personal budget and statement of net worth

Keep track of their spending and learn how to better manage credit card debt

Learn how to use benefit and savings plans to help achieve future financial goals

Share their knowledge by working with members of the community in a financial
literacy service learning experience
The literature covering financial literacy in higher education includes descriptions of courses
with diverse approaches. Texas Tech University established a financial literacy program which
offers money management instruction to campus groups and individual student financial
counseling performed by personal finance students. The Ailey School of New York offers a
money management course in which students post their personal spending in journals. At El
Paso Community College, students with Federal loans are given financial advice and receive
educational materials from Wells Fargo. Boise State University acquired a nonprofit financial
literacy group in order to provide an online financial literacy course. The University of
Washington uses a multi-media website from the student fiscal service office which provides
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financial training and tips. Other colleges offer an elective academic course or have a program
or center run by the student affairs office (Supiano, 2008).
The “Managing Your Personal Spending and Savings” course offered at this university
differs from programs at other colleges because it combines most of the course approaches
previously described. Due to the uniqueness of the course and the lack of course assessment in
the area of financial literacy in higher education, it is important for the university to analyze the
effectiveness of their program. This paper addresses three questions:

What effect does the course (independent variable) have on students’ spending and
savings habits (dependent variables)?

How and why does the course have this effect?

What specific course components are the most effective?
To assess effectiveness, students were surveyed during the first and last class meetings. In
the Fall 2008 term, students provided demographic information, were asked about prior financial
literacy education, the source of their spending money, and answered questions about their
checking account and credit card payments during the prior three months (dependent variables).
Students were asked if they had overdrawn their checking account and if so, the number of times
their account was overdrawn. Another survey question addressed the number of times that the
student had paid their credit card balance in full during the period. A final survey question asked
the students to rate the usefulness of the course from 1 to 5 (the score of 5 is equivalent to most
useful).
In the Spring 2009 term, the survey was changed in order to capture more detail as to the
student learning achieved as a result of the course. The revised survey (administered at the end
of the course) required students to agree or disagree that they had improved specific money
The 800 Pound Gorilla
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management skills as a result of the course. Students also rated the effect of individual course
components on their ability to manage personal spending and savings. Both questions required
students to use a 5 point rating scale. A rating of 1 indicated that they strongly agreed that
improvement was made and a rating of 5 indicated that they strongly disagreed on improvement
of their skills. A rating of 1 on the second question indicated that the course component had no
effect on their money management skills and a rating of 5 indicated a significant effect.
In the Fall 2008 course, 24 students out of 26 returned the course surveys. The average
age of the respondents was 20.3 years, 62% were male and 21% had prior financial literacy
education. 50% of survey participants were Caucasian, 29% were Hispanic, 8% were African
American and 8% were from the Middle East. In the Spring 2009 course, 14 students out of 14
returned the course surveys. Their average age was 21.9 years and 7% had prior financial
literacy education. 50% of the respondents were female and the ethnic background of the class
was composed of 64% Caucasian, 21% Asian and 7% Middle Eastern students. 7% of the
students chose not to specify their background.
Results
Data from course surveys was captured and analyzed quantitatively. In addition, data
from student reflections were analyzed using qualitative methods. Both quantitative and
qualitative analyses were used in order to fully answer the three research questions and develop
areas for future research.
The first step in examining the effect that the money management course had on the
habits of the course participants is to establish that the course did indeed have an effect. The fall
2008 money management course members rated the overall usefulness of the course on a scale of
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1 to 5, 1 being least useful and 5 being most useful. The mean score of the course was 3.875 and
the median score was 4.000, with a standard deviation of 1.191.
A second measure of effectiveness is to examine students’ money management behavior
after participation in the course. Students in the fall 2008 money management course were asked
whether their checking account had been overdrawn in the last three months. In October 2008,
50% of the course participants (12 students) had experienced an overdraft. When the same
students were surveyed in December 2008, only 11 students had overdrawn their account. This
statistic is encouraging, especially since the course began in the third week of October and
concluded in early December. With regard to the students who had overdrawn their account, the
same numbers of students were overdrawn 1-3 and 4-7 times in October and in December 2008.
However, the number of students who were overdrawn over 7 times decreased by one student
from October to December 2008 (see Table A). Chi-Square tests comparing the number of times
overdrawn in each category (none, 1-3 times, 4-7 times and over 7 times) in October 2008 versus
December 2008 produced no significant results.
Students’ money management behavior was also measured by the number of times in the
past three months that the students paid their entire credit card balance. The fall survey results
indicate that the respondents’ progress actually regressed. There were decreases between
October and December 2008 in the number of times the students paid their entire credit card
balance in most categories. However, there was an increase in the number of students paying
their entire balance one time during the last three months (from three to four students-see Table
A). It should again be emphasized that the course began in the third week of October and ended
in early December, which did not give the students much time to change their payment behavior
and a disincentive to save during the holiday shopping period.
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Students in both courses were asked to prepare a one-page written reflection at the end of
the course discussing the effects of the course on their spending and savings habits. All but a few
of the comments indicated that the course had helped to improve their spending and savings
choices. One student stated:
I personally have not noticed a change in my spending since I started
using the Wealth Watchers journal. This may be because I considered myself
pretty good with money before having taken this course. Despite the fact that I
don’t think it helped me I think many people could benefit from using this system
to monitor their spending. Some people are different from others and need to
record their purchases to understand the value of the money that they are
spending.
The written reflections contain a rich source of information about the specific spending
and savings habits were improved and the elements of the course which stimulated the
improvements. A majority of the effects cited in the reflections related to spending. Students
recognized the value of tracking their spending on a daily basis and keeping a running total of
their cash balance. One student commented:
As for the Wealth Watchers’ spending journal, I finally took away the importance
of keeping a personal written record of what is spent. Before this course, I never
kept receipts or tracked what I spent. To find out how much money I had at a
given time I would call the automated service my bank provides for my debit
card. This was not a healthy way to maintain my finances and after using the
journals, I have created an Excel sheet and update it every night.
Several students planned to continue this practice after the course was over.
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Many college students take advantage of their bank’s online features and use bank
records to monitor their cash balance. This practice can lead to overdrafts, as one student noted:
The last lesson I learned was not to overdraft. That was one of my biggest
problems coming into the class but now I can proudly say that I do not go over
my account balance. This class has taught me the importance of balancing ones
checkbook and now I know the reason for it is to be aware of how much money is
on the account. Before coming into the class, I depended on my bank to tell me
how much money I had. My bank has this thing were I can send a text message
and I will get a reply on how much money I have in my account. Most of the time
the information was inaccurate so (I would overdraft). Now I know better than to
trust my bank, which is way I always keep track of my spending in my journal.
Respondents discovered their purchasing patterns and developed an awareness of their
bad spending habits. Many students realized that they were wasting their money by spending it
on items they did not need. One student commented:
The first lesson I learned was that most of my spending went to fast food. I
discovered that with the recordings in my WW (Wealth Watchers) journal…but
when I added all the money I had spent on fast food throughout the past weeks it
amazed me to find out that it was almost two hundred dollars. It made me angry
because that is a lot of money that I could have used for other things.
Course participants also began to develop better spending habits. They started to evaluate
potential purchases before they made them. A student reflection included this comment:
I have seen a lot of positive changes now that I write in my Wealth Watchers
journal. I think twice before I buy something. I think, “Do I really need this? It
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is necessary?” Believe it or not I have talked myself out of buying certain things.
Now that I am graduating I think this is a real good thing to learn before I step
into the real world.
Students started to look for bargains when they made purchases. One student stated, “Not only
has my budget gotten better but instead of always buying the most expensive of everything, I
have been looking for used things, such as furniture, and if it isn’t used then I’ve been looking at
cheap, discounted stuff.”
Course participants also eliminated bad spending habits. One mentioned:
Keeping a Wealth Watchers journal has helped me really focus on what I do and
do not want to spend my money on. I have drastically cut back on frivolous buys;
instead of hitting the coffee shop before classes, I’ll bring a thermos of tea with
me. Possibly the most important spending habit I’ve changed was cutting back
severely my smoking habit. While I have yet to be able to kick the habit, I’ve
gone from a pack ($5-$6) a day to a week. That will save me over $1500 a year if
I keep it up.
Many survey respondents mentioned that they spent too much when they paid with a credit or
debit card than when they used cash for their purchases. As a result of the course, students began
to control their spending by using cash more and debit and credit cards less. Per one course
participant:
By using cash I knew that I had a fixed (amount) of money that I could
spend at a time, and I knew that I couldn’t get anything that cost more than what I
had. I would leave my debit card at home and take as much money as I thought I
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would need to spend. I would end up taking a little too much money, but I would
place the money in a safe place so that I would have it the next time needed it.
Another student was more sophisticated in his cash versus credit card decision. They stated:
I am the type of person that does not like to carry cash because I always rely on
having my credit card. My credit card offers reward points so the more I spend
the more points I earn. I could use the earned points to buy things or I can receive
a check from the credit card company. However, it is very hard to come up with
the points required to receive a check for more than $100. Therefore, when I
started using cash I automatically spent less because I was not worried about how
many points I had or needed to reach my goal. I am still using my credit card…I
am not using it for the daily expenses but rather for larger expenditures that I do
no have the cash readily available.
The second most popular topic in the written reflections cited the effect of the course on
students’ savings habits. Course participants became aware of the advantages of saving a small
amount of money on a regular basis in order to have enough money for their retirement needs. A
survey respondent noted:
The particular comment the (financial advisor) made about saving $5 a day and
the time value of that savings adding up to money enough to retire on has made
me decide to put away $7 a day into my savings account. I’m having it direct
deposited into that account and at the end of the semester I’m going to try and
evaluate which type of investment will work for my retirement goals.
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Said another, “One major thing I’ve learned is that (if) I start saving a certain amount of money
per month, I could have a million dollars or more by the time I’m ready to retire at 65.” A third
respondent said:
Even just saving five dollars a day can really help you in the future especially in
time of economic need. I am graduating and hopefully when I get a job I will
definitely start saving right away. There is no better time to save than when you
are young because you have no expenses.
Students decided to start incorporating an amount for savings into their budget after they learned
the importance of saving for emergencies.
A student noted:
This course has helped me with the idea that an accident can happen any day and I
should be prepared for it when it happens. When I budgeted my money I never
really added possible emergencies into my plans but have done so over the past
couple weeks.
A third topic that a few students mentioned in their written reflections was debt and the
use of credit cards. These individuals discovered the real cost of credit during the course
discussions. As one commented:
The second, most important lesson that I have learned was to use cash instead of
credit. I knew that by using credit you could get bad credit if you get behind on
your payments. But I didn’t know how much interest really cost. When
purchasing something with credit you can pay a few dollars more on something
that doesn’t even cost that much. When you pay with cash you are done paying
for it and you don’t have to worry about making any more payments later.
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After viewing the film ‘Maxed Out’ in class, another student stated, “It was particularly effective
in opening my eyes to the horrors that credit card debt can become, and definitely scared me into
being careful with credit.” After the course was over, one respondent made a decision to change
how they used their credit card:
The second lesson I learned would be to plan ahead and begin saving for any
major expenses. I would always just rely on my credit card for any major
purchases. I have realized that if I keep all of my money in a CD and buy things
only on my credit card I would spend more. The interest and fees are so much
higher on my credit card in comparison to the interest earned on the money kept
in the CDs. Therefore I have decided to leave some money in a savings account
instead of putting it all in a CD so that in case I need the money I do not have to
use my credit card.
Students also commented on their new-found ability to make a financial plan after they
had completed the course. One stated, “I also learned to set goals. Setting financial goals are
valuable for managing money because I know how much money needs to be saved for a specific
goal.” Participants began to consider possible uses for their money in future years. Said one:
I think when we hear the word ‘investment’, we often think that you have to be
sitting on a pile of money, but everyone can do it. I like that he (financial
advisor) stressed short term plans for college students who could use the money to
repay student loans or one day reinvest the money.
Another participant stated:
Once I start earning some sort of income…I will take money out of my paycheck
without ever thinking that it is mine to spend on extras and fund things but rather
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the allocated money will be paying different types of bills and (will be for) future
plans.
Students in the course prepared personal budgets for the first time and several planned to
continue budgeting after the course ended. A respondent commented, “Now I conscientiously
think about where my money is going and I try to make a budget. I’m not saying I always stick
to it but at least I am on the right path.” Tax planning was discussed in the course and it made an
impression on one course participant. According to this person, “…the 360 Degrees of Financial
Literacy packet handed out in class provided information on different subjects that I never
thought of, such as the education tax credits and tuition deduction. It made me look at my taxes
and make sure I was getting the best deal.”
The Spring 2009 money management course was asked to agree or disagree that they had
improved specific money management skills as a result of the course. Between 86% and 93% of
the students either strongly agreed or agreed that every money management skills listed in the
survey had improved (see Table B). The money management skills with the lowest mean ratings
(the rating of 1 indicated respondent strongly agreed with improvement) were: paying off
monthly credit cards (M=1.75, SD=0.87), avoiding overdrafts (M=1.75, SD=1.22), prioritizing
spending (M=1.93, SD=1.27), and sharing financial literacy information (M=1.93, SD=1.44-see
Table C).
To assess the aspects of the course which were the most helpful in improving students’
money management skills, the Spring 2009 class rated the effectiveness of individual course
components on their ability to manage personal spending and savings. The course components
with the highest mean ratings were the Junior Achievement presentations (M=4.36, SD=1.08),
the online money management resources (M=4.36, SD=0.74), and the Wealth Watchers spending
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journals (M=4.31, SD=.75-see Table D). Looking at frequency of the ratings (Table C),
between 65%-86% of the respondents rated five of the course components (Wealth Watchers
journal, online money management resources, AICPA presentation, Goodmoneyhabits.com and
the Junior Achievement presentations) as having some or a significant effect on their money
management ability. A topic count of the written reflections from both the Fall 2008 and Spring
2009 classes reveals that 93% of the course component comments mentioned the Wealth
Watchers journals, 87% mentioned Junior Achievement presentations, and 33% mentioned
online discussions.
Separate linear regressions were run between and all of the course components
(independent variables such as posting spending to the Wealth Watcher journal, listening to a
presentation by a financial advisor and an American Institute of Certified Public Accountants
(AICPA) literacy presentation, online weekly money management discussions, reading and
reporting on online money management resources and completion of Goodmoneyhabits.com
financial literacy education program) and each money management skill (dependent variables
such as the ability to share financial literacy information, avoid overdraft spending, set financial
goals, pay off credit card bills monthly, prioritize spending, set aside savings and prepare
personal budgets) to discover any significant relationships. The results are shown in Tables E
through L. Significant relationships (p<0.05) were found for two money management skills: the
ability to share financial literacy information and the ability to avoid overdrafts. JA
presentations and the ability to share financial literacy information indicated a significant
relationship (p=0.024). The Goodmoneyhabits.com software (p=0.003), online weekly
discussions (p=0.014), online money management resources (p= 0.028), and the financial advisor
presentation (p=0.039) were significantly related to avoiding overdrafts.
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To discover why these particular course components helped to improve course
participants’ money management skills, it is valuable to again examine the comments in the
written reflections. Several students praised the course for the opportunity to apply what they
have learned. “The best quality of this course is the interaction and learning from experience.
This type of interaction took place in the classroom, in online message boards, and through
teaching Junior Achievement. All of these different types of dealings gave me a better
understanding of my own personal savings and budgeting,” said one respondent. A second said:
I would recommend this (course) to another person. This is because of the
content of the class. Not only learning the “theories” in class, but actually
applying them outside of class. I saw the class as a ‘lecture’ and the Junior
Achievement part, as well as the Wealth Watchers’ journals, to be the ‘lab’ where
we implement what we know.
Several comments mentioned the fact that presenting Junior Achievement Economics for
Success lessons to middle-school children helped reinforce their own learning. The person
noted, “I really enjoyed the (JA) budget activity because I had just finished my own personal
budget, so it was relevant and reinforcing our own education.” Another said, “Doing different
(JA) activities each week were a learning experience for me and reminded me how to manage
my money.” A third commented, “I think every time I taught a new lesson with my kids at JA I
learned something new. Teaching these lessons got me thinking more about where my money is
really going and how it’s being used.”
Some participants cited group discussion and support as the best part of the course. “Yet
the real learning came when we were able to go online and converse with our peers about the
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different strategies that we use to manage our finances. Overall these discussions provided an
experience that could not be found in a textbook,” said one. Another stated:
I learned to be more outgoing and share my ideas with others. I used to think that
I was doing everything right and I did not have to talk to anyone about my money.
The truth is that we are not perfect and that we can always learn things from
others. For example, one of my peers made me realize how many cool activities
are offered on campus. Instead of going out and spending money I could join
some of those activities here in school.
A third student said:
Another lesson that I thought was great was the discussions that we had in class
where we went around the room saying something that we could work on. It
made me feel more comfortable knowing that my peers had the same problems
that I did and that I wasn’t all by myself. We talked about that we are a family
and I believe that it is easier to work as a group on these issues than individually.
The results of the present research suggest that the financial literacy course “Managing
Your Personal Spending and Savings” improved course participants’ money management habits.
Student ratings and comments were strong indicators of this phenomenon. A less strong
indicator was the effect of the course on student behavior. The ability of students to change their
pattern of overdrafts and payment of credit card bills was constrained by the timing of the course
and other outside factors that may have affected their financial behavior. Students rated the most
significant improvements in their ability to avoid overdrafts, prioritize spending, paying off
credit cards and sharing financial literacy information. They cited other benefits of the course
including the practice of tracking their spending and cash balances, eliminating the purchase of
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20
unnecessary items, and shopping for bargains. Course participants began a savings program in
order to build up funds for retirement and emergencies and began to use cash instead of credit
cards to make their purchases. They developed financial goals and began to follow a budget.
The most effective course components cited by the participants were those that required
‘learning by doing’ and the sharing of experiences: posting spending to Wealth Watchers
journals, teaching Junior Achievement lessons and online discussions with course members.
Conclusion
One drawback of the pilot study was that the survey was changed between Fall 2008 and
Spring 2009 semesters in order to add respondents’ ratings of their money management skills
and the effect of course components on their skills. In future semesters, these ratings can be
compared from one term to the next. Research needs to be conducted with course participants in
future sections of this financial literacy course in order to increase the sample size of the pilot
study and verify the results in this paper. More research is needed to track the actual money
management behavior of the survey respondents. A longitudinal study which would track the
money management habits of students who have completed the course during the remainder of
their college experience would also benefit the study. A comparison of the effectiveness of this
course to other financial literacy courses at higher educational institutions would provide
information as to the elements of the curriculum which contribute the most to improvement in
financial literacy knowledge and behavior. The expected outcome of a financial literacy course
is best expressed by a quote from one of the participants in the course:
Although there were times when I was overwhelmed and saddened by my current
financial state, I can now say that I have a better understanding and appreciation
The 800 Pound Gorilla
for money management. My hope is that I will no longer treat my finances like
the 800-pound gorilla in the room and actually have the courage to deal with it.
Table A
Comparison of Survey Results for Fall 2008 Course (N = 24)
October 2008
Survey question
Overdrawn checking account
%
50%
n
12
December 2008
%
46%
n
11
If checking account overdrawn, number of times overdrawn in last 3 months:
1-3 times
50%
6
55%
6
4-7 times
25%
3
27%
3
Over 7 times
25%
3
18%
2
3 times
21%
5
13%
3
2 times
17%
4
8%
2
1 time
12%
3
17%
4
0 times
21%
5
46%
11
No credit card
21%
5
13%
3
8%
2
4%
1
Payment of full credit card balance in last 3 months:
No response
21
The 800 Pound Gorilla
22
Table B
Ratings of Money Management Skills-Spring 2009 (N=14)
Rating (1=strongly agree, 5=strongly disagree)
1
2
Money management skill
% n
This course improved respondent’s ability to:
%
n
3
4
5
% n
% n
%
N/R
n
% n
Set financial goals
42.86 6 28.57 4 14.29 2 7.14 1 7.14 1
Prepare personal budget
35.71 5 50.00 7
0.00 0 7.14 1 7.14
1 0.00 0
Prioritize spending
50.00
7 28.57 4
7.14 1 7.14 1 7.14
1 0.00 0
Set aside savings
50.00
7 21.43 3 14.29 2 7.14 1 7.14
1 0.00 0
Pay credit cards on time
42.86 6 21.43 3 21.43 3 0.00 0 0.00
0 14.29 0
Pay off monthly credit card balance 50.00 7
Avoid overdrafts
7.14 1 21.43 3 7.14 1 7.14
0.00 0
1 7.14 1
50.00 7 21.43 3
7.14 1 0.00 0 7.14
1 14.29 2
Share financial literacy information 57.14 8 21.43 3
7.14 1 0.00 0 14.29
2 0.00 0
The 800 Pound Gorilla
23
Table C
Effectiveness of Course Components on Money Management Skills-Spring 2009 (N=14)
Rating (1=No effect, 5=Significant effect)
1
Course component
% n
2
%
n
3
%
4
n
%
5
n
% n
N/R
% n
Wealth Watchers journal
0.00 0 0.00 0 14.29 2 35.71 5 50.00 7 0.00 0
Financial advisor presentation
0.00 0 7.14 1 35.71 5 28.57 4 21.43 3 0.00 0
Online money management resources 0.00 0
Online weekly discussions
0.00 0 14.29 2 35.71 5 50.00 7 0.00 0
14.29 2 7.14 1 28.57 4 21.43 3 28.57 4 0.00 0
AICPA presentation
0.00 0 0.00 0 21.43 3 50.00 7 21.43 3 7.14 1
Goodmoneyhabits.com software
0.00 0 21.43 3
Junior Achievement presentations
0.00 0 7.14 1 21.43 3
7.14 1 14.29 2 50.00 7
7.14 1
0.00 0 71.43 10 0.00 0
The 800 Pound Gorilla
Table D
Survey Results for Spring 2009-Means and Standard Deviations (N=14)
M
SD
Set financial goals
2.07
1.27
Prepare personal budget
2.00
1.18
Prioritize spending
1.93
1.27
Set aside savings
2.00
1.30
Pay credit cards on time
1.75
0.87
Pay off monthly balances
2.08
1.38
Avoid overdrafts
1.75
1.22
Share financial literacy information
1.93
1.44
Money management skills:
Course improved ability to:
Course components:
Effectiveness of course components on money management skills
Wealth Watchers journal
4.31
0.75
Financial advisor presentation
3.69
0.95
Online money management resources
4.36
0.74
Online weekly discussions
3.43
1.40
AICPA presentation
4.00
0.71
Goodmoneyhabits.com software
4.00
1.29
Junior Achievement presentations
4.36
1.08
24
The 800 Pound Gorilla
25
Table E
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Paying Credit Cards on Time (Dependent VariableSpring 2009 (N=14)
В
SE В
β
Sig.
-.231
.123
-.208
.156
.394
.113
.456
.039*
-.545
.105
-.673
.014*
.386
.179
.310
.120
JA presentations
-.120
.069
-.154
.182
Online money management resources
-.725
.181
-.571
.028*
Goodmoneyhabits.com software
.003
.000
.929
.003*
Course component
Wealth Watchers journals
Financial advisor presentation
Online weekly discussions
AICPA presentation
Note. R² = .98.
*p<.05
The 800 Pound Gorilla
26
Table F
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Share Financial Literacy Information (Dependent
Variable)-Spring 2009 (N=14)
В
SE В
β
Sig.
Wealth Watchers journals
.266
.527
.135
.636
Financial advisor presentation
.674
.488
.434
.226
Online weekly discussions
-.856
.410
-.733
.091
AICPA presentation
-.005
.779
-.002
.995
JA presentations
-.934
.293
-.704
.024*
Online money management resources
1.039
.836
.542
.269
.002
.001
.307
.315
Course component
Goodmoneyhabits.com software
Note. R² = .82.
*p<.05
The 800 Pound Gorilla
27
Table G
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Avoiding Overdrafts (Dependent Variable)-Spring
2009 (N=14)
В
SE В
β
Sig.
.035
.179
.022
.860
1.072
.164
.865
.007*
-1.590
.153
-1.372
.002*
AICPA presentation
-.113
.262
.063
.696
JA presentations
-.330
.101
-.295
.047*
Online money management resources
.487
.265
.268
.163
Goodmoneyhabits.com software
.004
.000
.894
.004*
Course component
Wealth Watchers journals
Financial advisor presentation
Online weekly discussions
Note. R² = .98.
*p<.05
The 800 Pound Gorilla
28
Table H
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Setting Financial Goals (Dependent Variable)-Spring
2009 (N=14)
SE В
β
Sig.
- .219
.694
-.128
.765
Financial advisor presentation
.287
.642
.212
.674
Online weekly discussions
-.497
.540
-.489
.400
AICPA presentation
-.411
1.026
-.227
.705
JA presentations
-.629
.385
-.544
.164
Online money management resources
.870
1.100
.522
.465
Goodmoneyhabits.com software
.000
.002
.056
.898
Course component
Wealth Watchers journals
Note. R² = .58.
*p<.05
В
The 800 Pound Gorilla
29
Table I
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Paying Off Monthly Balances (Dependent Variable)Spring 2009 (N=14)
В
SE В
β
Sig.
3.535
5.155
.315
.531
Financial advisor presentation
.808
4.477
.094
.866
Online weekly discussions
-.383
3.688
-.059
.922
AICPA presentation
1.533
7.137
.134
.840
JA presentations
-4.449
2.784
-.570
.185
Online money management resources
-8 .694
7.569
-.800
.315
-.002
.013
-.069
.885
Course component
Wealth Watchers journals
Goodmoneyhabits.com software
Note. R² = .62.
*p<.05
The 800 Pound Gorilla
Table J
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Prioritizing Spending (Dependent Variable)-Spring
2009 (N=14)
В
SE В
β
Sig.
-.224
.870
-.130
.807
Financial advisor presentation
.359
.805
.263
.675
Online weekly discussions
-.258
.677
-.252
.719
AICPA presentation
.277
1.286
.151
.838
JA presentations
-.482
.483
-.414
.364
Online money management resources
.329
1.379
-.196
.821
Goodmoneyhabits.com software
.002
.002
.347
.532
Course component
Wealth Watchers journals
Note. R² = .35.
*p<.05
30
The 800 Pound Gorilla
Table K
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Setting Aside Savings (Dependent Variable)-Spring
2009 (N=14)
В
SE В
β
Sig.
Wealth Watchers journals
-.349
.809
-.198
.684
Financial advisor presentation
.590
.748
.424
.466
Online weekly discussions
-.903
.629
-.862
.211
AICPA presentation
-.690
1.196
-.370
.589
JA presentations
-.294
.449
-.656
.541
Online money management resources
1.421
1.282
.826
.318
.002
.002
.428
.405
Course component
Goodmoneyhabits.com software
Note. R² = .47.
*p<.05
31
The 800 Pound Gorilla
32
Table L
Summary of Linear Regression Analysis for Student Ratings of Financial Literacy Course
Components (Independent Variables) and Preparing a Personal Budget (Dependent Variable)Spring 2009 (N=14)
В
SE В
β
Sig.
Wealth Watchers journals
.088
.747
.055
.911
Financial advisor presentation
.613
.691
.489
.416
Online weekly discussions
-.724
.582
-.768
.268
AICPA presentation
-.281
1.105
-.167
.810
JA presentations
-.403
.415
-.972
.376
Online money management resources
.959
1.185
.620
.455
Goodmoneyhabits.com software
.002
.002
.418
.427
Course component
Note. R² = .44.
*p<.05
The 800 Pound Gorilla
33
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Harris Interactive. (2006). One-third of college upperclassmen admit being financially
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http://www.schwabmoneywise.com/views/survey/youngAdultsAndMoney.php
Supiano, B. (2008). For Students, the New Kind of Literacy is Financial. The
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The 800 Pound Gorilla
income and product accounts of the United States-Personal saving rate. Retrieved July
20, 2009 from http://research.stlouisfed.org/fred2/data/PSAVERT.txt.
34