The Effect on Offender Money Management Skills

Financial Literacy Curriculum: The Effect on Offender Money Management Skills

Koenig, Lori A


Offenders involved in this study lacked basic financial knowledge which presented a barrier to their success upon release. The researcher modified existing curriculum and created a course in financial literacy for offenders within a medium security correctional facility based upon their personal experiences. The offenders gained financial knowledge as measured by a pretest and posttest covering financial topics. Offender financial histories were identified in several areas such as savings and debt, banking experience, and housing. The findings suggest students made gains in knowledge. This class covering money management is of great benefit to the offender as they prepare to once again reenter today’s society.

What does one teach in a financial literacy class targeted toward offenders? The nature of correctional education is very diverse. How can one meet the needs of an offender who has been incarcerated for 30 years? Thirty years ago the minimum wage was close to $2.65 per hour; a gallon of gas sold for around $.80 per gallon; you could purchase a new car for approximately $5,000. Visa cards were just beginning to emerge and grow in usage. Family dynamics were very different in the late 1970s with many husbands expected to be the breadwinners in their household.

Consider also the situation of an offender who has been locked away in prison since before he could even drive. What financial skills will this offender need in order to be successful upon release? He may have never held a job, written a check, or found housing for himself. It is likely that he will obtain employment at a salary close to minimum wage. Today, credit cards are easily obtained, and advertising sells the idea of a lifestyle that many will not be able to afford; especially those with lower incomes.

The typical correctional education classroom is by nature a rather formal, reserved environment. Working as a correctional educator makes one aware of some of the financial experiences encountered by offenders. Sharing of personal experiences in a classroom setting is not always a routine practice in correctional education. Studies have shown that there is value in incorporating these personal experiences into learning. In planning for a class in financial literacy offender experiences were incorporated into the curriculum, and student gains in knowledge were measured as well.

Literature Review

The current economic climate in the United States is growing ever more complex. Consumers have a growing number of financial decisions that they must make. Increased advertising and marketing can lead American citizens to make clouded decisions. National statistics show that money management is of immediate concern here in the U.S. The bankruptcy rates have doubled over the past ten years (Borja, 2004). ‘An estimated 10 million American adults have no relationship with a mainstream financial services provider. One third of these adults are African American and 29% are Hispanic. One-fourth of all lowerincome families are un-banked” (Sarbanes, 2002, ¶ 4). Many offenders affirm these statistics as they generally have lower incomes, minority backgrounds and no previous banking experience.

One of the reasons for these economic trends might be attributed to a lack of understanding about Investing and financial planning. A small number of adults today are able to recall participation in a class covering financial topics. Without formal instruction, many are left to learn from their parents, or on their own by experience. This statement is consistent with this current research where approximately 76% of the students surveyed had learned about money management from family or through their own personal experiences. Congress passed the Excellence in Economic Education Act in 2001, which provided for increased funding of programs in financial literacy (Borja, 2004). In May 2002, President Bush created the Office of Financial Education. Their goal is to educate Americans with practical skills they will need to make better-informed financial decisions (US Treasury).

The JumpStart Coalition for Personal Financial Literacy has published National Standards in Personal Finance covering four areas: (a) Income; (b) money management; (c) spending and credit; and (d) saving and investing (Mandell, 2002). In addition, The United States Treasury’s Office of Financial Education has created eight key elements to a successful financial education program. These eight elements are grouped into four main categories: content, delivery, impact, and sustainability. They present that the areas of savings, credit management, home ownership, and retirement planning should be covered (US Treasury, 2004). Several of these topics were incorporated into a class on financial literacy for offenders.

Objectives and Purpose

The purpose of this study was to uncover some of the financial experiences today’s offenders have faced and identify areas where offenders were lacking knowledge in money management. The next objective was to use this information to teach personal money management topics that met individual offender’s educational needs. The overall goal in teaching this new class In financial literacy was to better prepare the offender to live successfully upon release from prison. The action research question became: What impact does the Integration of the financial history of offenders into a newly created class in financial literacy have on their knowledge and understanding of money management skills?


Preparing for the Class

The initial step in this study of financial literacy was to conduct a literature review. Standards for teaching financial literacy as well as individual lesson plans for the class curriculum were found.

Existing curricuiums were reviewed. There were several free financial curriculum programs available online that were requested (see Appendix A). Upon conclusion of this initial search, course materials were pulled from different curriculum programs and various websites offering financial lesson plans.

There were 17 men who voluntarily chose to participate in this class and study. The offenders age levels spanned from 20 to 61. The ethnic backgrounds of the offenders also varied. Nine were Caucasian, six were African-American, and two were Hispanic. Their reading levels varied, but all were literate and capable of reading and understanding the class material on their own. The educational levels included two college graduates, two with college classes taken, five High School Equivalency Diploma (HSED) or high school graduates and eight students without their HSED or high school diploma. The commonality they had was that they were in the class together and were anticipating release from our medium-security prison within the next few months.

Teaching the Class

Throughout teaching the financial literacy class data were gathered in several ways. A pretest and posttest of financial knowledge was administered. Information on student financial history was gathered with a survey, a short interview of past financial experiences, and through student comments in class. The class curriculum included units covering the following topics: budgeting, credit, credit cards, consumer privacy, saving and investing, buying a home, renting, insurance, cars, interest, payroll, and trouble.

There were four main objectives to be covered. The first was to identify the baseline for financial knowledge of the offenders in class. To do so, a pretest was given on the main financial topics of the curriculum and revealed which topics needed attention. This test was adapted from that used in the JumpStart Coalition’s Report on Financial Literacy (Mandell, 2002).

The second objective was to leam about the financial experiences of current offenders in order to use that information to teach to their needs. Students completed a survey on past financial experiences as homework. During in-class work time, students were interviewed about their financial experiences. Anecdotal records of comments within the classroom were also collected.

The third objective was to incorporate student financial history and current financial knowledge into the class curriculum. One way to do this was to teach to their deficiencies. Another was to encourage discussion throughout class on those topics.

The fourth objective was to measure if the offenders were gaining knowledge and understanding in their areas of deficiency. In doing this the pretest and posttest scores were compared. Throughout the class, student comments were recorded to note an increase in knowledge. The class concluded with a discussion on individual learning.

The test data was analyzed by using Microsoft Excel spreadsheets to see which test questions were missed most frequently. A Microsoft Access database was created to analyze the other student data. By using this program, student characteristics could be combined and printed in useful and informational reports such as offender age and education level, or number in their household and their housing history. Daily student comments were kept by the teacher within a journal throughout the class.


Financial History of Today’s Offenders

The tools used in compiling the personal financial experiences of today’s offenders included the survey of past financial experiences, interviews and comments during in-class discussions. The data were used to create tables and queries using Microsoft Access. The following data are significant as they present financial characteristics that can attributed to offenders at any location.

Financial problems

When asked about their previous financial problems, a few students claimed that they did not have any. Other offenders shared that they found it difficult to keep up with paying bills at times. Not budgeting, not saving, and spending cash too quickly were also factors that contributed to financial difficulties for the class participants. Their responses showed that most offenders had some financial difficulties at some point.

Savings or debt

The amount of debt experienced by the offenders varied quite a bit. Six offenders claimed that they had neither current debt nor savings. Seven offenders claimed to have more debt than savings, with debts ranging from $200 to $20,000. Four of the offenders listed that they had more in savings than they had in debt. These saved amounts ranged from approximately $200 to $20,000. One offender claimed his amount of debt was equal to his savings. The majority of offenders involved in this study held a zero or negative balance in savings.

The offenders shared the sources of their debts. Two of the offenders mentioned owing court fees and three offenders still had restitution to pay. Four of the offenders owed for unpaid child support. Medical bills comprised much of the debt for three offenders, other miscellaneous sources of debt were unpaid bills such as rent, traffic tickets, cell phone bills, bank loans, and money owed to the IRS. One student mentioned that he had worked with a collection agency to get some of his bills paid off. The presence of even a small amount of debt may constitute a large hurdle for many offenders upon release.


Five of the offenders never had a bank account. Of the remaining students, twelve had some form of a savings or checking account. The majority of offenders in this class had never taken out a bank loan. Only four of the seventeen men had previous experiences with a loan from a financial institution. Those same four students were also the only ones who had a credit card in the past.


Of the seventeen offenders in this study, only two of them had begun to save for retirement. This included both retirement savings of their own accord or those established through an employer. In other words, fifteen men from the ages of 20 to 49 had not yet begun to put aside anything for retirement.


Only two participants had ever owned their own home. Seven had previously rented a place to live (see Appendix B). Five offenders have lived with friends, and three out of the class had only lived with relatives. When comparing housing trends with age and number in the household, some interesting patterns emerged. Four of the older students claimed to have only lived with friends and never have rented a place of their own. Of this group, two of the men stated they had several people living in their households. This leads the researcher to wonder if these large families did not have stable, consistent housing provided for them. Five of the younger students had previous rental experience. Of these students, the reported households were smaller, between two to four people per household. These trends paint a brighter picture for it appears at some point housing was provided by renting. Hopefully these offenders will be able to leave prison, find a job and once again contribute financially to their household.

Automobile ownership and financing

Five offenders in this study never had an automobile for their own use. Four offenders had an automobile yet didn’t pay insurance on it Eight men had an automobile in the past for which they paid insurance. Of those with prior automobile purchases, only two financed through the bank. The remaining ten offenders paid cash in full for their vehicles. Four of these offenders claimed to have two years or less of work experience. This leads one to wonder if criminal activities of some kind may have allowed these offenders to buy their cars with cash.

Employment Trends

As the data were analyzed, some employment trends emerged. The effects of race, age and education on work experience will be discussed.

Work experience, age and race

One of the most basic requirements for an individual to responsibly support self and family is through working. For the students in this study their years of work experience ranged from no experience, to having 25 years of work experience. The majority of the students in class held less than five years of work experience with the three oldest students each having over 20 years of experience. For the students in their 30’s or 40’s finding a stable job upon release may be difficult without prior experience in the workforce. There were both Caucasian and African American students with few or many years of work experience. All of the Caucasian students held at least some work experience. Of those with no work experience, these students were all minorities. The Caucasian students held over twice as many total combined years of work experience when compared to the total for African American students. This may lead to the conclusion that minorities in general hold less work experience (see Appendix C).

Education and work experience

The connections drawn between work experience and education became very clear. There were eight offenders aged 22 to 44 years old without a high school diploma or an HSED. These eight men held only 13 years of work experience altogether. On an average this is only 1.6 years of experience per person for someone lacking an education. There were nine participants who had earned at least their high school diploma or HSED. Four of these men attended or graduated from college. The combined average work experience for those offenders who attended college is 9.7 years per person. This statistic helps to show the crucial importance an education has on the employability and earning power of today’s population of offenders (see Appendix D).

Financial Knowledge of the Students in Class

The financial experiences of offenders are often very different from those of mainstream Americans. In order to best meet their educational needs in a finance class, these experiences must be taken into consideration.

To begin assessing current student knowledge, a test covering the following topics was given: budgeting, banking, credit, credit cards, insurance, retirement, interest rates, cars, trouble with money, housing, payroll, privacy, and savings. The test that was used had been modified from the Jump$tart Coalition’s Report on Financial Literacy (Mandell, 2002). The results of this pretest varied from 37% to 90%.

The offenders in this study did poorly in the savings, retirement, and interest sections, so instructional methods were needed to teach those topics. The offenders scored well in credit and payroll; therefore, those sections needed less study during class. The students had average scores in the topics of cars, trouble, budgeting, privacy, insurance, credit cards, and housing so additional instruction could be used in those areas.

Are the students gaining knowledge?

Throughout the class it was obvious that the students were learning. They showed interest in the material through active listening and by participating in discussions. Almost all of the students participated in discussion throughout class and also posed questions for topics on which they wanted more information. Cooperation was observed as well. The students willingly helped others when working with familiar concepts. These are all positive signs in a classroom setting that the students are interested and motivated in the information that they are learning.

At the end of the course, the students were asked individually during class if they felt they had learned anything. Most replied with a yes, they had learned something. Some responded that they had learned some, while others responded that they had learned a lot. In their responses they mentioned insurance most frequently, then budgeting, interest rates, credit cards, credit and the other topics.

Some of their direct comments were as follows:

“Yes, I learned a lot, there were a lot of things I didn’t know and I’m grateful to know the difference today” (personal communication, May, 20, 2005).

“I learned a lot coming to this class” (personal communication, May, 20, 2005).

“Yeah, I know I have learned, learned about interest and budgeting. Budgets are good” (personal communication, July, 1, 2005).

“Some of the things we covered I knew, I did learn about housing as I’ve lived with my parents my whole life” (personal communication, July 1, 2005).

A posttest was given at the conclusion of the class. This test was the same one as was used in the beginning to gain an overview of student knowledge. In general, the students showed moderate improvement. The class average on the pretest was 66%. By the end of our class this average had risen to 74%. Both classes improved their scores in the areas of credit cards, insurance, and retirement. The two different classes came out ahead in different topics. The first class had also scored better on privacy, while the second class showed more improvement In the sections on credit and cars.

Analysis of the test showed student scores dropped slightly on the budgeting questions. The students showed only marginal Increased knowledge with the questions on saving and housing. To conclude, these areas could have used further review. The classes showed moderate improvement through testing in the topics of insurance, credit cards, credit, interest and payroll. The students scored noticeably higher with the questions on retirement, cars, trouble, and privacy.

Integrating Financial Experiences to Foster learning About Money Management

After collecting Information on the financial experiences of offenders via the survey and interview, those experiences were then incorporated Into daily class activities. There are two main ways that this was done. The first was to teach directly to some of their deficiencies in experience. Credit cards and retirement are examples of topics that were covered as few of the offenders had prior knowledge or experience with them.

Second, the offenders assisted in the effectiveness of the class as they shared their own personal experiences through classroom discussions. By incorporating actual student experiences the students learned from each other. The following paragraphs will explain some of the lessons covered and also some of the personal comments that were shared by the offenders in class. This type of instruction gives a real-life perspective to the topics covered.

Housing was one of the units with the most participation during discussions. The students shared information about their own housing experiences. One offender even jokingly mentioned that you could sleep in your truck if you had to. Throughout the housing unit we discussed costs of housing, financing, taxes, and terminology. When the topic of including all names on a lease was discussed, one student remarked, “I ain’t never going to have anything in my name.” (personal communication, May 31, 2005)

The lessons on insurance began with the students viewing a video on insurance risk and working through additional activities. One student shared that his apartment had burned In the past and without a renter’s insurance policy he lost $7,000 worth of property.

In the unit on credit cards the students discussed personal experiences in class and also worked out interest fees mathematically on a worksheet. Several showed surprise at the high cost of Interest to be paid when making only the minimum balance payment. One offender remarked, “I ain’t never going to have a credit card, I’m always going to pay cash” (personal communication, June 9, 2005).

During a discussion about loans and banking one student shared an experience where he had co-signed for an automobile loan for a friend. A few months later the car was totaled in an accident. There was no insurance on that vehicle but the loan was still there to pay.

During the discussion on savings options one offender shared his experience with collectibles. He had a collection of miniature cars that had doubled in value over time. A mini-unit on the stock market was also incorporated into this financial literacy class. The students showed skepticism throughout their remarks about Investing their money into the stock market. They shared that they were not willing to risk losing what they had worked hard to earn.

One of the components of our banking unit was a checkbook activity. Several students had previous experience with a checking account. They willingly helped the other students as they worked through a simulation on paper. Using a handout showing a paycheck, we discussed payroll deductions and taxes.

Discussion was limited during the classes focusing on retirement as few students had any previous knowledge In this area. One of the class activities was to watch a video from the Social Security Administration on Social Security Insurance (1998). This video highlighted the importance of individual savings as well as a pension plan to a secure retirement.

The offenders’ financial experiences highlighted many deficiencies. The opportunity to learn from others’ mistakes and experiences was applied through class discussions. This teaching method was important for it showed the ‘reality’ of the experience. The students found themselves able to relate to the situations that were discussed in this way.

The above information signifies that the offenders themselves can provide valuable input In a class on financial literacy. One student’s financial experiences can teach others by example and spark productive, meaningful classroom discussions.


The truthfulness of the offenders may present a limitation. For some offenders who have been incarcerated for several years, it may be difficult to think back to their lives on the streets to share some of the financial problems they experienced. It may be difficult to think up an accurate estimate of their savings or debt since these are accounts they may not have used in quite a while.

Two sections of the class in financial literacy were taught. Due to scheduling conflicts, they were of different lengths. The first class utilized 20 classroom days. The second class utilized 27 days of instruction. With the extra time we were able to cover some of the topics more thoroughly. The class curriculum used for both classes was Identical; however, the personal experiences the students brought to the discussions were very unique for each class. There were two college graduates In the first class, and they had many financial experiences to share. The second class had fewer students offering personal experiences through discussion; they were a much quieter group.

One additional limitation may be the voluntary nature of the class. Were the students who chose to participate an accurate representation of the entire prison population? For the most part, the students that enrolled were interested in the class and willing to learn new skills. There were a few students who were well educated and had prior experience with many of the topics presented. In considering their future, a majority had planned to further their education upon release. One would hope this Is true for all those incarcerated. Occasionally an

offender had shared his belief that a hard day’s work involved making fast, easy money selling drugs or with other illegal activities. They were not interested in learning how to budget or keep a checkbook by any means. This population was not represented within this study.

The biggest limitation to this study was the small number of participants. There were seventeen men who participated in these two classes of financial literacy. There are well over 24,000 men incarcerated within our state system to date. The findings could be much more reliable had a greater number of offenders been allowed to participate in this study.

Action Plan

The next step following this research project will be to use the Information gathered to revise the curriculum for the financial literacy course. Some of the difficult topics have now been identified. Lessons and activities to help reinforce those topics will be found. Teaching materials on retirement, savings options and interest rates will be added. Check cashing businesses and rent-to-own stores are also useful topics that are important to teach as they are abundant in communities today.

Future classes in financial literacy will further incorporate discussion between students about their experiences, in this way providing real-life examples for their peers. The information on financial experiences can be used with each new group of students.

The pretest and posttest will be useful tools to continue using with future classes. They can be revised as to meet the current objectives of the course. By using the tests the teacher will then be able to see their effectiveness.

This study shows the definite need to continue educating offenders in financial literacy. An effective reentry program will incorporate many of these financial topics so we can better assist offenders in meeting with success upon leaving prison. Within the walls of a prison many decisions are made for offenders. Teachers must do their part in equipping the offenders in making wise decisions for themselves when back in the community. This focus on education in finance may be one of the keys to reducing the prison population.


This study can provide a foundation for future research that can impact correctional education throughout the state of Wisconsin and possibly the nation. In researching the topics of financial education and correctional education no published articles on these connected topics emerged. Correctional educators will be able to learn through these experiences and may apply some of the findings to their own correctional education classrooms. Most importantly, this study helps to reveal the glaring need for offender financial education. The results of this study will further impact the upcoming classes of financial literacy that will be taught locally. This new knowledge will allow teachers to better meet the needs of their diverse students. The increased knowledge in money management skills that these students possess will better prepare them to meet success upon release from prison.


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Mandell, L. (2002). Financial literacy: A growing problem. Washington DC. JumpStart Coalition for Personal Financial Literacy.

Sarbanes, P. (2002, February 26). Financial Illiteracy. FDCH Congressional Testimony.

US Department of Education. Excellence In Economic Education Act. Retrieved April 4, 2005 from

US Treasury. Office of Financial Education Overview. Retrieved April 4, 2005, from

Wyderko, S. (2004, March 30). Financial literacy programs. FDCH Congressional Testimony.

Yarbro, K. (1996, August). Saving money or wasting minds? Corrections Today, 58, 12.

Biographical Sketch

LORI KOENIG is a recent graduate of the University of Wisconsin-La Crosse having completed the Master of Education – Professional Development Program. She has taught Adult Basic Education classes in the Wisconsin Department of Corrections for several years

Copyright Correctional Education Association Mar 2007

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