'Smart Investing' Course Reaches Rural Communities

August 2011

Iowa families need knowledge and skills to increase their long-term financial security. In 2009 the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation conducted a state-by-state survey to examine Americans’ financial capabilities. In the Iowa study

  • 17 percent of individuals reported that over the past year, their household spent more than their income;
  • 25 percent reported using high interest, non-bank borrowing methods such as auto title loans or payday loans; and
  • 61 percent lacked a “rainy day” fund to cover expenses for three months, in case of emergencies such as sickness, job loss or economic downturn.

Woman reading newspaperPeople can learn to make smart financial decisions, both for day-to-day money matters as well as long-term investing. But volatile financial markets and increasingly complex investment products make it difficult to determine how to meet immediate needs as well as where to invest for retirement. Understanding changes in the economy, investment options and tax changes is essential for making sound decisions. When people increase their knowledge about saving and investing, they are more likely to take action.

Time for Smart Investing

Twenty-five rural Iowa libraries participated in “Smart investing @ your library®.” The program promotes investor education resources and programming and is a collaboration of the State Library of Iowa, the Ames Public Library and Iowa State University Extension and Outreach. Participating libraries were located in Anita, Bayard, Buffalo Center, Chariton, Charles City, Creston, Denison, Hamburg, Hawarden, Iowa Falls, Kalona, Keokuk, Lake City, Le Mars, Leon, Marengo, Monticello, Mount Pleasant, New Hampton, Oelwein, Perry, Pocahontas, Story City, Waukon, and Winterset.

The State Library of Iowa was awarded a grant of $98,251 from the American Library Association (ALA) and the FINRA Investor Education Foundation to fund Smart investing @ your library. Beginning in fall 2010 and continuing in spring 2011, the libraries hosted courses that combined face-to-face and online learning taught by ISU Extension family finance program specialists. Three different courses were offered simultaneously at six weeks each: one for first-time investors, one for those preparing for retirement and one for retirees. The courses provided information tailored to each age group and encouraged participants either to start saving and investing or to take a second look at their current situation and make changes. The program was especially concerned with helping those who might otherwise have limited access to important information relevant to their financial well-being.

I was glad to find out how much risk I’m willing to take and learn more about investing in general.

- Participant, Smart investing @ your library

Participants Take Action

More than 400 Iowans completed the course. The sessions attracted a wide range of individuals from Generation X to Baby Boomers, pre-retirement and retirement age. About half had household incomes between $40,000 and $80,000, with roughly a quarter below and a quarter above that range.

Pre- and post-surveys indicate that participants not only increased their knowledge about investing, but also took action. For example, there was a 27 percentage point increase in the number of participants who had made a “ballpark estimate” of their retirement savings needs and a 36 percentage point increase in the number who had developed an investment philosophy and assessed their risk tolerance.

Participants noted that they appreciated learning about investing without any pressure to buy particular investment products. They also said they had shared information from the course with family members, friends and neighbors, and planned to use local and state library resources in the future to learn more about investing and other personal finance topics.

This has made me more interested in finances and I plan on checking out more books on the topic.

- Participant, Smart investing @ your library

“Iowa libraries empower people to make decisions and solve problems,” said State Librarian Mary Wegner. “We are delighted to partner with Iowa State University Extension and the Ames Public Library to provide these classes about financial literacy in rural communities in the state.” The State Library of Iowa and ISU Extension and Outreach have been invited to submit a proposal to extend the program to additional underserved, rural Iowans.

For more information about Smart investing @ your library contact:

Cynthia Fletcher, ISU Extension Family Resource Management State Specialist, 515-294-8521, cynthia@iastate.edu  

Pat Swanson, ISU Extension Family Resource Management State Specialist, 515-294-2731, pswanson@iastate.edu