A recent research brief from the Corporation for Enterprise Development (CFED) for the U.S. Department of the Treasury demonstrates that financial counseling offered significant benefits to participants in a job training program.
More participants have bank accounts
The research demonstrated that participation in the financial counseling course had a significant impact on the “banked status” of participants. The study findings indicated that, “Over the course of the study, the percentage of participants who reported being banked moved from one-third at baseline to almost 60% at six months, and over half still reported being banked at 12 months.”
More participants are current on debt payments
The study also demonstrated that those who participated in financial counseling were more likely to be current on their debt payments. According to highlights from the study, “Participants offered counseling had a 5% reduction in the percentage of debt that was past due after 12 months, and those that actually attended counseling had a 14% decrease over the year.”
Peer-to-peer counseling and expert financial advice
Another conclusion of the study was that individuals were more likely to sign up for the program if they received peer-to-peer counseling. The most effective approach was to have peers describe real-life examples of the benefits of bank accounts, but also have bank customer service reps available to answer questions.
The study authors noted that the financial counseling was most effective at changing participant behaviors if it was provided at a transitional time, such as when starting a new job.