Breaking poor money habits: bringing financial literacy to the classroom

Financial literacy in the classroom for the next generation.

Financial literacy in the classroom for the next generation.

Following the tumultuous financial landscape of late, the importance of a financially literate society has been center stage for a lot of us. The implications of letting yet another generation perpetuate our poor money habits are drastic. However, with this concern comes a real opportunity. An opportunity to break the cycle, and instill some sound personal finance principles. Financial literacy is a vital component of a thriving economy, translating into social and financial inclusion and encouraging well-informed consumer decision making.

We all comprehend the importance of financial literacy, but how do we ensure that we promote, and encourage this as a society, community, and family? Some individuals are fortunate to receive such teachings at home, but for others they go without, and do their best as young adults when they are confronted with financial decisions, big and small.

This is the problem I’m trying to address on a daily basis in my role as a Banqer co-founder.

Banqer is an online financial education tool for schools that aims to give the gift of financial literacy to kids by tying financial education into an everyday, online, classroom rewards system. Not only does it teach students financial concepts such as interest and tax, but it increases daily motivation through the exchange of a classroom currency being paid out by their teacher, and amongst one another.

It is clear that our current ‘triage’ approach, of educating after the fact is not working. Behaviours are set, and habits are already formed. Despite knowing we shouldn’t be behaving in certain ways when it comes to our finances we continue to. Financial services professionals will be able to relate to this first-hand through client stories. A 2014 OECD report finding the “development and integration of financial habits and attitudes begin very early and probably before children reach 7 years old.” If we’re claiming that a seven year old is starting to form the basis of their future financial habits, then why are we not actively shaping these in a formal and standardised manner?

An international movement of nations that are proactively prescribing financial education requirements has begun. Financial education is compulsory for students in ten countries across the globe, and an optional curriculum subject in many others, including certain Australasia. In New Zealand, where Banqer has been operating over the last school year, the findings, both analytical and anecdotal are staggering. Over this series I’d like to encourage a discussion around not only platforms such as Banqer, but more generally the place of financial education in schools.

I’d invite readers to register for a Banqer account, teachers or not. Although we’re a paid service we have a free month trial period, so over this free time I’d like to walk through Banqer together to facilitate this conversation.

I’d like to start by examining the core functionality of Banqer. When it all boils down, we’re simply a classroom currency system set on a foundation of monetary incentives, such a structure that enables teachers to motivate students in a way mimicking the adult world. If I asked “why do you go to work?” majority of respondents would (when answering truthfully) mention some component of financial compensation. This is how the world is set up. It may seem bleak, but we are schooled in order to secure a job, which in turn can finance our living costs. The alignment of interests and work aside, we spend our time working to be compensated financially.

For some they love their daily work, so remuneration isn’t overly important to their motivation levels, but to a large proportion it is. Jolene Butson, has been using Banqer in her year six class for three terms and states; “Having a class currency system creates a real life context in the classroom and gives everything we do an authentic purpose. As a teacher I can create real life experiences to motivate students whilst at the same time building financial literacy understanding and knowledge of careers that will benefit my students in the future.” And it is this “context” and “authentic purpose” that resonates with a lot of students. Suddenly, despite the fact that Banqer dollars are fictitious, they have a newfound motivator in their school lives – their Banqer bank balance. Getting an income for publishing articles on the class ‘publishing wall’, or knowing that the top class speller of the week gets a $300 bonus incentives work, but also familiarises students with the financial realities to come.

With a classroom currency system also comes the practical relevance of completing financial transactions. By giving students access to such an experience, enabling interaction with their finances through a mock online bank account, Banqer opens the mind to understanding of how we can relate to our intangible finances in the age of digital currency. The implicit learnings taking place when requiring students to complete simple transactional tasks, like setting up automatic payments to their teacher for renting their desk, are massive. Colin Hill, a New Zealand based year six teacher has seen these learnings transitioning into real life action; “They are accessing it at home and discussing with friends and family. Some children have actually looked into opening their own [real] bank accounts especially realising they are getting interest on their savings. It’s awesome hearing children having these conversations with their parents!”

Classroom learnings transitioning into sound financial decision making at a young age like this is blowing us away. And incidents don’t stop with one example. I hear regularly of children requesting to set up bank accounts after having used Banqer in their class. This conversation excites children. It’s not too much, too soon – it is the right time to be starting these conversations, and we’re finding that school is increasingly the right place to start having them.

Next time we’ll be exploring how to ensure a financial education can encourage and develop the next generation of innovators, as we discuss the current risk appetite of students versus adults. If you haven’t already, be sure to register for your free month on Banqer, and join in the #FinEd conversation.

Kendall Flutey, Banqer

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