Anyone Can Learn Personal Finance
With careful preparation and program design, you can ensure that all your clients can indeed learn personal finance, even those “I don’t do math” types.
Hello, Talking About Money Community, how are you? (Reach out and let me know.)
In today’s post I want to discuss a concept that I came across the other day: The theory that anyone can learn anything. And for the purpose of this article:
The theory that anyone can learn personal finance.
Did you pause as you read those words? I did when I first came across this concept. Wait, I thought, what about the people that I meet who say to me, “I don’t do money” or “I don’t do math”? What about them? Can those people learn personal finance?
You can probably think of a few people in your financial capability programs who, on first glance, look to be ill-suited to mastering a traditional financial literacy course. Maybe they have few years of formal education, or do not speak English as a first language. Maybe they appear to be too involved in a specific financial crisis to be able to concentrate. Or maybe they appear disinterested in your outreach and recruitment messages.
What about them? Can they learn personal finance?
Upon embarking on a quick internet search in preparing for this post, I learned that Sal Khan, founder of Khan Academy, is a believer in this concept (and he’s got the Ted Talk to prove it). Others are too, namely Michael Crow, President at Arizona State University. Taking from their unique perspective as inspiration, let me right now drive a stake in the ground and claim that anyone can learn person finance.
But how?
Believe That You Can Learn (and Maybe Even Love) the Topic of Personal Finance
The first way to engage your learners in the subject of personal finance is to discover the WIIFM.
Well, what is in it for your learners?
Your prospective financial education participants may have a dream that they want to actualize, like purchasing a first home or starting a small business. How can you harness that motivation into a willingness to participate in financial education? Describe that in order to realize that financial goal, the learner must take the interim step of becoming knowledgeable about their individual financial reality. Once that is accomplished, your learner can get to the good stuff, like homebuyer education or small business counseling.
Maybe your would-be learner to looking to lessen the stress that they feel when it comes to their money, whether it be because of under-employment that leads to the repeated stress of paying monthly bills, or because of a singular incident like – a layoff or an illness – that leaves them deep in debt. Pain alleviation is a powerful motivator and may lead to participation in an educational offering.
Further, there is a lot of talk in academic and business circles in support of a “growth mindset,” or the belief that your talents can be developed through hard work, good strategies, and input from others. What is key in this paradigm is to keep the stakes (and stressors) low so that you can maintain the mental flexibility to learn and grow. Research shows that once your brain is under stress, your thinking becomes more rigid, and you lose your ability to learn and grow. This fact means that it is even more important for you as a financial capability practitioner to design your program thoughtfully.
Structure you outreach and recruitment messages so that they ignite your clients’ motivations for change, be that through goal attainment or pain alleviation. Then describe your offerings in a way that make them sound fun. And not too stressful.
Learn (and Teach) in Community with Others
Another way to increase the likelihood of success among your financial education participants is to offer group learning opportunities. But why, when Google is at your fingertips and asynchronous learning is all the rage? Why would you choose to offer your financial education in a group format?
Research shows that learning in groups is more effective than learning by yourself. The Eberly Center at Carnegie Mellon University lists the following benefits of group learning:
Tackle more complex problems than students could on their own.
Delegate roles and responsibilities.
Share diverse perspectives.
Pool knowledge and skills.
Hold one another (and be held) accountable.
Receive social support and encouragement to take risks.
Develop new approaches to resolving differences.
Establish a shared identity with other group members.
Find effective peers to emulate.
Develop their own voice and perspectives in relation to peers.
Have you ever seen a financial education class really gel as a group? If so, then you know what this looks like.
In community workshop series that I have taught, I have seen students rise as leaders among their peers. I have watched students share their life experiences with their class, inspiring their peers to those “a-ha” moments that educators strive toward. I have witnessed many students have perfect attendance at workshop series because they knew that their classmates were expecting them to be there. And I have seen students take risks and succeed beyond their initial goals because they knew that their group had their back.
These moments are awesome to behold. It is what keeps me heading back into the classroom over and over again.
Another way to improve students’ performance in personal finance is to assign them the task of teaching various concepts to their peers, commonly known as the Protégé Effect. Teaching others tends to give individuals increased motivation to absorb and retain information, so that they can effectively explain it to others.
If you really want your students to learn the material, assign them the task of teaching it to someone else.
Build Your Own Personalized Financial Plan
The third way to increase your participants’ knowledge of personal finance is to have them complete a project – a complete personalized financial plan -- based on their own lived experience. Rather than completing exercises and case studies that have your participants consider fictitious characters and made-up scenarios, have your students use their time to create a set of financial documents that they will 1) feel proud to have developed, and 2) refer back to in the future.
The Federal Reserve Bank of Atlanta has a curriculum called Making Finance Personal: Project-Based Learning for the Personal Finance Classroom. While this curriculum is geared toward high school students, it can be molded to suit adult learners. In the complete curriculum students are guided toward building a personalized financial plan consisting of:
Tracking expenses
Setting financial goals
Creating balance sheets and cash flow statements
Planning for taxes
Creating a budget
Obtaining and reading credit reports
Purchasing a vehicle
Saving and investing for the long term
Gathering important financial documents
Saving for retirement
Making sure that you are properly insured
Giving your students a project to complete over the course of your workshop series gives them the sense of satisfaction of “I built this.”