Teaching financial literacy in a co-curricular service-learning model

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  • Laura D. DeLaune a,1, Jessica S. R b c,a 3101 Patrick Taylor Hall, Department of Accountingb Federal Bureau of Investigation, 2111 W. Rooseveltc Saint Xavier University, Graham School of Managem

    a r t i c l e i n f o

    toward reaching life goals and achieve nancial well being (AICPA, 2008, p. 5). Recent surveys andstatistics provide a startling reality of how a lack of personal nancial education is affecting collegestudents. A survey of 13,000 college students found that more than half had more than $5000 in credit

    Corresponding author. Tel.: +1 773 298 3614.E-mail addresses: delaune@lsu.edu (L.D. DeLaune), rakow@sxu.edu (K.C. Rakow).

    1 Tel.: +1 225 578 6227.

    J. of Acc. Ed. 28 (2010) 103113

    Contents lists available at ScienceDirect

    J. of Acc. Ed.0748-5751/$ - see front matter 2011 Elsevier Ltd. All rights reserved.of learning between members of Beta Alpha Psi and their audience,college underclassmen. The results indicate that the project is suc-cessful in educating both presenters and audience members onbasic nancial knowledge as well as developing technical and com-munication skills of Beta Alpha Psi members. The project outlinepresented in this paper provides a framework for others to use.

    2011 Elsevier Ltd. All rights reserved.

    1. Introduction

    The American Institute of Certied Public Accountants (hereafter, AICPA) denes nancial literacyas the ability to effectively evaluate and manage ones nances in order to make prudent decisionsArticle history:Available online 2 April 2011

    Keywords:Financial literacyPersonal nanceService-learningdoi:10.1016/j.jaccedu.2011.03.002akow , K.C. Rakow, Louisiana State University, Baton Rouge, LA 70803, United StatesRoad, Chicago, IL 60608, United Statesent, 3825 W. 103rd Street, Chicago, IL 60655, United States

    a b s t r a c t

    The current economic environment has brought to light the nan-cial literacy epidemic in this country. A lack of personal nancialeducation has contributed to the increase in consumer credit debt,a trend evident for many college students who often have signi-cant credit card debt. One way to combat this problem is throughnancial literacy education. This paper describes a service-learningproject implemented through a Beta Alpha Psi chapter, which ful-lls the educational objectives of the accounting curriculum andaddresses an educational need. The project provides reciprocityTeaching and Educational note

    Teaching nancial literacy in a co-curricularservice-learning model

    journal homepage: www.elsevier .com/locate/ jaccedu

  • card debt, and one third had more than $10,000 in credit card debt (Sallie Mae., 2007). While the Cred-it Card Accountability, Responsibility, and Disclosure Act recently passed by Congress makes it harderfor credit card companies to lure college students into opening an account, the underlying problem ofcollege students not understanding how to manage their personal nances has not been solved. Putt-ing this together with student loan debt and costs associated with moving into the working world, itis not surprising that nancial problems continue after graduation. Bryant, Stone, and Wier (2007)document the growing amounts of debt facing college students caused by pressures to look successful

    104 L.D. DeLaune et al. / J. of Acc. Ed. 28 (2010) 103113after graduation. While there is no single solution to this growing problem, there are numerous meansto educate college students on personal nance. The purpose of this paper is to describe one innova-tion in teaching nancial literacy to college students by using a student organization in a service-learning model.

    The Beta Alpha Psi (BAP) Board of Directors established Financial Literacy of College Students asthe organizations Best Practices topic for the 20072008 school year. The Board realized that manycollege students do not acknowledge the importance of a nancial plan until they have graduated,which may be too late due to nancial mismanagement during their college years. Louisiana StateUniversitys BAP chapter joined this initiative at the beginning of the 20072008 academic yearand developed a service-learning project to educate college underclassmen on the importance ofnancial literacy. The service-learning project consists of BAP members presenting three skits toundergraduate students. The topics of the skits are credit, spending wisely, and retirement. The goalof the project is to provide students with a foundation of basic personal nancial knowledge andencourage them to build on their nancial literacy skills going forward. The project also developstechnical, communication and teamwork skills, which are important for a successful career inbusiness.

    Service-learning (S-L) is a type of experiential education dened as a teaching and learning strat-egy that integrates meaningful community service with instruction and reection to enrich the learn-ing experience, teach civic responsibility, and strengthen communities (National Service-LearningClearinghouse., 2009, p. 1). Within the accounting discipline, there are several examples of S-L projectsbeing used in specic courses.2 However, it is not always feasible to include S-L projects within the cur-riculum. An alternative would be for students to experience S-L projects through extracurricular activi-ties, such as student organizations (Mech, 1998). In fact, the Accounting Education Change Commission(AECC, 1993, p. 433) suggests that students seek campus opportunities to build communication andbusiness skills.

    Cook, DeBerg, Michenzi, Milano, and Rama (2003) discusses advantages of using S-L activities instudent organizations. First, there is more exibility since the service activities do not have to belinked to a specic course. Second, there is increased development of personal competencies suchas leadership, interaction, communication, and teamwork. Third, there is prolonged student involve-ment since the activities typically last more than one semester. Finally, there is opportunity for assess-ment through formal evaluations such as presentations at regional and national competitions. Thispaper continues the discussion of Cook et al. (2003) and adds to the body of S-L literature by describ-ing the implementation of a S-L project that meets the national requirements of BAP, promotes devel-opment of technical and communication competencies of the BAP members, and includes formalevaluation of outcomes.

    In Section 2, we provide a description of the nancial literacy project used at Louisiana State Uni-versity. This detailed description should aid other student organizations that may want to implementa similar project. We conclude the paper in Section 3.

    2 Examples of S-L used in tax courses include Carr (1998), Milani (1998), Oestreich, Venable, and Doran (1998), Strupeck andWhitten (2004), and Anderson and Bauman (2004). Examples of S-L used in accounting information systems courses includeMichenzi (1998), Lenk (1998), and Rose, Rose, and Norman (2005). Pringle (1998) describes a S-L project in the rst intermediateaccounting course. Woolley (1998) discusses using S-L activities in a capstone course. Examples of S-L used in accounting ethicscourses include Ravenscroft (1998) and McPhail (2005). Still and Clayton (2004) provide examples of S-L used in auditing and

    government/not-for-prot courses.

  • accounting problem.

    college students. Before designing their project, BAP members looked for dened groups of students

    to whom they could present. BAP members approached the Business Residential College, a residencehall for business freshman, requested and were granted permission to hold a nancial literacy presen-tation for its residents. In addition, faculty teaching introductory accounting classes were asked if theywould encourage their students to attend nancial literacy presentations hosted by BAP. The facultynot only agreed to encourage their students to attend, they also decided to offer bonus point incen-tives to their students for attending. Therefore, the target audience of this S-L project was primarilyfreshman and sophomore business majors.

    2.3. Design and budget the project

    After the audience was established, the BAP members were given the task of creating a nancialliteracy presentation that would be informative as well as hold the audiences attention. In the springof 2007, the chapter presented a nancial literacy workshop to a group of local high school studentsand their parents. Based on the feedback from that workshop, discussing the needs of college under-classmen, and after researching various personal nance topics, the BAP chapter decided to covercredit, spending wisely, and investing. The members chose to use an interactive skit format whichincorporated humor to keep the audiences attention while still delivering the message to the targetaudience of college underclassmen. Crossroads of Financial Literacy (hereafter, Crossroads) waschosen as the theme and used to promote the presentation. Based on corporate donations to BAP, abudget of $1000 was established to use during the course of the project.

    BAP members were divided into four groups; one for each nancial literacy topic (Credit, SpendingWisely, and Investing) and one for overall project coordination. Financial literacy topic groups con-sisted of eight members each, including a designated leader. The fourth group was composed of 24BAP members addressed all three of these objectives over the course of the nancial literacyproject. Members conducted in-depth research of nancial literacy topics, thus increasing theirtechnical competence in that area. Teams were used throughout all phases of the project, and thedelivery format of the nancial literacy education component was an oral presentation. The followingsub-sections provide more information on how the project was designed, implemented, andevaluated.

    2.2. Identify the target audience of the project

    The target audience for the project, as set forth by the national BAP best practices initiative, was2. The nancial literacy project

    2.1. Determine the community need and educational objectives of the project

    S-L projects should fulll a community need and be planned and coordinated with the educationalobjectives of the respective curriculum (Bringle & Hatcher, 1999). The community need being ad-dressed by the BAP project is nancial literacy education of college students. The educational objec-tives being met by the BAP project are those of the department of accounting at Louisiana StateUniversity. The following learning objectives are from the department of accountings assurance oflearning plan for the undergraduate accounting degree:

    1. Students will demonstrate technical competence in the area of nancial accounting.2. Students will deliver an effective oral presentation on an accounting topic and incorporate appro-

    priate technologies to enhance the effectiveness of the presentation.3. Students will work effectively in a team environment to generate an acceptable solution to an

    L.D. DeLaune et al. / J. of Acc. Ed. 28 (2010) 103113 105additional members who worked on planning, organization, and marketing.

  • 2.4. Develop the project

    Money A How-to Guide by Carmen Wong Ulrich (2006). Other members relied on websites like the

    to stand according to the color on their card. Each group of participants was used to visually repre-

    106 L.D. DeLaune et al. / J. of Acc. Ed. 28 (2010) 103113sent the percentage of college students that statistics show have over $25,000 in loan debt after theygraduate from college, have a credit card without their parents approval, and are at risk for identitytheft.

    The Spending Wisely group incorporated the Crossroads theme by showing good versus badspending habits. The group demonstrated how to create a basic budget and gave advice on cost-cut-ting tips and controlling debt in a skit titled, The Wild West. The presentation included a damsel indistress who was throwing her money away on useless items, an evil credit card cowboy, a cashcowboy, and a budgeting bartender.

    The Investing group used a Vacation Getaway skit to promote the benets of investing for retire-ment early as opposed to waiting. The group decided to use investing through a retirement plan as thefocus of the presentation. The skit included a chance meeting of two former high school sweethearts.The group showed a disparity between Linda, who started saving for retirement at 25, and Howie, whowaited until 35 to start saving. The group showed amounts invested for Linda and Howie in both aRoth IRA and a 401(k) and their value at retirement age.

    2.5. Coordinate and market the project

    BAP members who were not part of the skit groups were charged with marketing and coordi-nating the project. These students created yers, emails, and website postings to advertise the pre-sentation. The group also designed T-shirts for all participating members to wear at eachpresentation. Corporate sponsors were listed on T-shirts and all other marketing material. Otherresponsibilities of this group included reserving rooms on campus for presentations, providing food,drinks, and door prizes, and insuring that all necessary equipment and materials for skit groupswas provided. The BAP members managed their costs and completed the project under budgetusing only $976.76.4

    2.6. Implement the project

    Our BAP chapter hosted a total of three presentations, one to freshman in the Business ResidentialCollege and two presentations for students in introductory accounting classes. Multiple presentationswere planned to accommodate the anticipated attendance, which totaled 490 students.

    3 The topic brochures were created as a tri-fold Microsoft Publisher document and are available upon request.AICPAs 360 Degrees of Financial Literacy and Feed the Pig campaigns to nd information. Afterdeciding what material to cover, each group developed its skit and incorporated it into the overallCrossroads theme. Each group developed a nancial literacy brochure for its topic which listedimportant information, tips, and websites.3

    The Credit group chose to include information on credit reports and calculating credit scores. Fol-lowing the Crossroads theme, the group created a skit called The Rating Game, which high-lighted the differences between good credit and bad credit. The skit scenario was based on aconversation between three college freshmen: one with good credit, one with bad credit, and onewith no credit. In addition to the skit, color coded note cards were handed out to audience membersat the beginning of the presentation. The group interacted with the audience by asking participantsEach of the four groups was given a specic timeline and task list for the project. The topic groupsworked separately to develop their presentations but also had a few combined meetings to ensureconsistency. Groups were encouraged to use any method they preferred to research their topic anddecide on specic material within their topic to cover. Some members read books such as The MoneyBook for the Young, Fabulous, and Broke by Suze O...