Effective Financial Education: Five Principles and How to Use Them

Document Type

Issue/Research Brief/Blog

Publication Date



financial education program components, financial education program delivery


Because of the key role that financial education can play in people’s lives, the CFPB has conducted research over its first five years into what makes financial education effective for consumers. What do we mean by “effective?” It does not just mean training that helps people perform better on a test of financial facts. It means equipping consumers to understand the financial marketplace and make sound financial choices in pursuit of their life goals. It means helping consumers as they work to bridge the gap between their knowledge, their intentions, and the actions they take. It means deploying a wide range of strategies that help consumers to achieve the ultimate goal of financial education: financial well-being.

To that end, the CFPB has examined what financial well-being means to consumers, in their own words, for their own lives. We also created a rigorous way to measure it, and developed a model of what factors drive an individual’s financial well-being.

What the research demonstrates is that there is no single right way to help adult consumers improve their financial decision-making skills and choices, just as there is no single right way everyone should conduct their financial lives. There are many approaches that work, reflecting the diversity of people’s circumstances, opportunities, and aspirations. We have distilled from this research certain principles, or underlying factors, that can be put into practice through adult financial education to help drive financial action and well-being.1 This report, Effective financial education: Five principles and how to use them (Five principles for effective financial education), reflects the CFPB’s research as well as input from the field, presents the principles along with tested strategies, and highlights practitioners’ tips for ways to put the principles into practice.