Liz Weston: Money lessons that actually stick

Efforts to make us smarter about money don't seem to be working.

A Harvard Business School study found personal finance classes taught in high school had no effect on "financial outcomes," such as how much people saved or how likely they were to miss payments on debt. A report for Management Science found that even intensive instruction had "negligible effects" on people's behavior. That's led some critics to say financial literacy education doesn't work.

But other research has found methods that show promise. If you want to improve your relationship with money or teach your children about personal finance, these findings may help you do just that.

For adults, one approach that moves the needle is the Sharpen Your Financial Focus program, launched by the National Foundation for Credit Counseling three years ago and studied by researchers at Ohio State University.

Participants start with a quiz, called MyMoneyCheckUp , to assess their financial health in budgeting, saving, debt management and retirement. A financial counselor reviews the results, helps the participants identify which areas they want to improve and sets up targeted education, such as in-person workshops or one-on-one financial coaching.

The researchers who studied the program created a control group of people who hadn't been coached to compare how their finances changed over 18 months. The Sharpen clients reduced their debt significantly more than the control group, and the reductions held even after researchers accounted for bankruptcies, foreclosures and charge offs among those studied. Controlling for those factors, the Sharpen clients lowered their credit card and other revolving debt by $2,700 more than their peers with similar debt, and reduced their overall debt by $7,600 more.

The clients also reported that they were managing their finances better, paying their debts more consistently and feeling more financial confidence than they did before the counseling.

Having clients set goals and create action steps seems to improve people's behavior far more than a brochure or class, says researcher Stephanie Moulton, associate professor in the John Glenn College of Public Affairs at Ohio State.

"With the counseling, they are actually getting an action plan that is directly oriented to them," Moulton says. The plans include "specific actionable steps like, 'Within the next three weeks, I am going to enroll automatic deposit of my paycheck into my savings account.'"

Moulton and her colleagues had found similar results in another study comparing people who received financial coaching when they bought a home with those who hadn't. The coached homebuyers were less likely to miss payments or incur more debt.

"It could be a sense of accountability, a sense of being watched," Moulton says. "The goals and action plans I think are part of it . and they are getting phone calls from the counselor, 'Hey, you said you were going to automate that payment. Did you do it?'"

If you want to improve your own financial behavior, you can start with the MyMoneyCheckUp quiz. You're forewarned: It's quite extensive, looking not only at your current financial state, but also your grasp of the basic concepts behind building wealth and taking on debt. The tool points out areas you can improve and the steps you can take to get there. You can connect with one of the nonprofit foundation's financial counselors or proceed on your own.

For children, what seems to work is having actual standards for what constitutes financial education rather than letting bankers drop in for an hour or having untrained teachers try to figure it out, says financial literacy expert Annamaria Lusardi, professor at the George Washington University School of Business.

Previous research lumped together many different approaches to financial literacy, including states that merely suggested it be offered in schools and those that didn't provide any guidance about what to teach. Past studies also typically didn't distinguish between states that had just approved financial literacy mandates and those that had well-developed standards.

A study last year that used those distinctions found they made a difference. Researchers tracked young people in three states (Georgia, Idaho and Texas) that required high school students to take a financial literacy course with a model curriculum.

The graduates had higher relative credit scores and were less likely to be 90 days late on debt payments than their peers in neighboring states who didn't get the education, according to researchers from the Federal Reserve Board, Montana State University and the Center for Financial Security at the University of Wisconsin-Madison.

If you're curious about what kids need to know, we now have national standards , developed three years ago by the Council for Economic Education, establishing what concepts should be taught at each grade level. (For example, an eighth-grader should comprehend and explain the value of compound interest .) The standards are meant to guide teachers and policymakers, but parents can use the information as well.

Heaven knows our kids, and the rest of us, need all the help we can get. Bad money decisions can echo through our lives for decades — just ask the people who took on too much student loan debt or who failed to save enough for retirement. Financial literacy won't build a road to riches for most people, but it can help them avoid some of the potholes.

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This column was provided to The Associated Press by the personal finance website NerdWallet.

Liz Weston is a columnist at NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.