Is financial education?

Recently, for kids and adults with financial education seems to be a mom and apple pie as the crowd was right there to please. Almost everyone acknowledges that financial literacy is a worthy goal, and more than a dozen countries require some form of secondary school personal finance education. There’s only one problem: it does not seem to work.

This is a group of experts in life cycle savings and investment, I recently attended a conference at Boston University sobering conclusion. This issue, participants agreed, is a broad-based efforts to improve financial literacy does not hit, when they really need it. The best time to provide financial education Annamaria Lusardi, director of the Financial Literacy Center sponsored by R said, and the company, Dartmouth College and the University of Pennsylvania Wharton School of the University, is “when people actually we have to make financial decisions. “(in Dartmouth, for example, new employees are given a simple, one-page walk through the inter-directed retirement plan period. handouts, and then by the interpretation of the principle of compound interest and real people talking about diversification, and provide personal information to add clips how they save and invest.)

The same is true for personal finance courses Lewis • Mandel children, at the University of Washington’s Foster business business School professor said. After the occupation of professional consumer financial behavior, Mandel concluded that financial education will not have a lasting impact on financial knowledge. He cited a numbe problem R: teaching is not “sticky”, using the Web vernacular. Classes are not enhanced general disposable. And children’s themes not directly related to experience – no different triangle.

Paul Sorman, Economics Correspondent PBS News pointed out that long-term study in New Zealand showed that adult financial habits can be identified as young age 3. Children with. In this age of self-control of at least the amount of the most difficult to control their money as adults

In order to improve self-control is recommended between the kids, deputy director of research, in Moffitt, Duke University – guess what? – give their allowance, for help with how to manage it.

Good advice. All of this is FASCinating but not surprising. ActuallyIt is encouraging to obtain the views of academic backup of the real world, I have given a very long time.

For example, it makes sense, I think the lessons of life insurance and social security for high school students will not be “sticky.” But with their own clothing or pay phone really gives the impression of responsibility, adhere to them. That’s why I’ve been a big advocate of the benefits tied to the financial liability (see 7 Tricky children and money challenging material).

According to what I heard at the conference, I’ll stick with some other good advice:

Do not be too hasty Children, like adults, need to know in order to operate on basis, so teach them lessons, it is age-appropriate not to use a second information (see previous six key questions you teach your children about money) overwhelm them.

If you start about 6 or 7 years of age allowance, this is a good time to start, keep it simple by giving children a financial liability (perhaps to buy their favorite collectibles), you can do this later basically. Nothing gives teenagers a crash course in the first tax salary. And high school students may not be too concerned about retirement, but when you graduated from college students to get her first job, and has been enrolled in 401 (k) plan, I guarantee you’ll get a phone call for help.

A pleasure. In my experience, the best way to get students interested in learning about money is to entertain them. Mandel’s research shows that playing the stock market game is far more effective in promoting financial literacy not take a personal finance class.

In the classroom, I also recommend other hands-on game, so that children do about choosing a career, buy a house and pay bills real-world decisions. And any kind of competition (such as a financial raucous game of football, I recently saw), so that they smoke, and increase the chance that they will remember the lesson even after they have taken the exam.