Making Financial Literacy Fun
Learning about money and finance does not have to be dull and boring. It can be fun and engaging.
And if we expect young people and adult learners to take the time to study and master basic financial concepts, then it needs to be done though innovative ways that capture their attention.
It's a sad fact that most Americans do not understand finances and retirement planning well enough. According to the most recent Financial Literacy Survey of U.S. adults conducted by the National Foundation for Credit Counseling, 4 out of 10 adults would give themselves a grade of C, D or F when it comes to their personal financial knowledge.
That means many lack the basic financial know-how to save more and to wisely invest the money they do set aside -- as well as the realization that by not saving now, they are cheating themselves out of stability and financial security in the future.
It's never too early to start saving for retirement.
Let's face it: The majority of Americans would rather watch multiple funny cat videos on YouTube than balance their checkbook or have a money conversation with a loved one. That mind-set has to change.
The answer is a simple one. Historically, financial education was rote and tedious. Only a few -- primarily those of us in the financial industry -- found studying market trends and calculating interest-rate risk exciting. The result is that many adults are ill-equipped to make important buying, saving and investing decisions.
This paucity of financial literacy has contributed to the economic troubles many individuals and families have faced in recent years. %VIRTUAL-article-sponsoredlinks%If you are knowledgeable about good and bad debt, you would realize that a 100 percent loan-to-value mortgage is a bad financial move.
I am not saying that other factors, such as unethical mortgage brokers and greed, did not play a role. They did. But it is harder to get ripped off when you recognize that having no equity in your home leaves you exposed to unnecessary risk.
Unfortunately, many Americans didn't receive that information until it was too late.
The good news is, there are organizations working to make financial literacy more engaging by using gamification and other adult learning techniques.
Gamification techniques strive to leverage people's natural desires for competition, achievement, status, self-expression, altruism and closure.
The American Student Assistance, a 58-year-old national nonprofit historically known for student-loan education and repayment assistance, launched an interactive website in 2011 called SALT. The name SALT recognizes the role salt played as one of the original forms of currency. The SALT program was specifically designed to help college students learn sound financial habits while in school and to better manage their student loans by learning how to borrow less, borrow smart and repay well.
The site, free to the public, %VIRTUAL-pullquote-This paucity of financial literacy has contributed to the economic troubles many individuals and families have faced in recent years.%targets individuals aged 18 to 26 and is designed using adult learning theory, allowing users to select among several different teaching modalities.
The user can read short articles from experts and peers, watch motion graphic and live videos, use interactive financial lessons or subscribe to daily blogs. Although it is new to the market, the initial feedback has been positive.
Another for-profit organization, called Main Street Legacy, utilizes an old-fashioned physical toolbox of creative lessons to promote good financial health. The concept, founded by two financial advisers and estate planners -- Scott Farnsworth and Ryan Ponsford -- includes colorful giving cards and interactive exercises aimed at using philanthropy to teach participants about personal finance. While the creators state that the lessons are applicable to children and adults of all ages, the target market is primarily high-net-worth families with teenagers, who want to teach the next generation about finances through the lens of charitable giving. There is a companion Facebook page to encourage dialogue among its users.
At the same time, Farnsworth and Ponsford also started a nonprofit sister organization called Main Philanthropy, which uses the same concepts but targets students in lower-income areas who are unlikely to be exposed to these lessons. The mission is to inspire a new generation of philanthropists by bringing this program to Main Street.
According to its creators, the lessons are similar even if the dollar amounts are different.
What these organizations have in common is that they thought outside the box and developed teaching tools that transformed previously lackluster financial lessons into engaging content.
Statistics tell the story. American Student Assistance continues to have one of the industry's highest rates of borrowers in good standing: 85 percent versus the national average of 70 percent. Over the last two years, it has served more than 2.2 million members nationwide. Its SALT counselors have helped cure more than 200,000 borrower delinquencies per year. Main Street Philanthropy, which tested its model at McPhatter Middle School, part of the San Diego juvenile court system, saw that students' knowledge and understanding of financial, tax and investment principles increased 58.7 percent by the completion of the program.
I challenge the financial advisory community, parents, teachers, the school systems and any concerned citizen to follow their lead.
Because a personal finance curriculum is not required within our nation's school systems, it's up to all of us to find ways to make sure we are not a nation of fiscally challenged citizens.
Who knows. We may even get to the point where we associate money matters with fun.
Kathleen Burns Kingsbury is the founder of KBK Wealth Connection. She is a wealth psychology expert and behavioral-change specialist. She is also the author of several books.
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