Bridging Learning to Behavior

Brian PagePersonal Twitter: @FinEdChat

Classroom Twitter: @TeenDollars

Nuts and Bolts of Personal Finance

Tools we use to manage our personal financesExample: Banking services

Concepts applicable to financial scenariosExample: Power of compound interest

Each are often found in standardsCouncil for Economic Education Jump$tartState Standards

“Nuts and Bolts” don’t turn themselves!

To bridge learning to behavior…

+ Tools

+ Concepts

+ Behavior Strategies

+ Relevant teen topics

Prepared

Build in Behavior Strategies

Don’t eat the marshmallow! http://www.ted.com/talks/

joachim_de_posada_says_don_t_eat_the_marshmallow_yet

If a student is impulsive, then what? It’s our job to introduce them to strategies to

overcome impulsive behavior

Nudges – America Saves / Budget Challenge Project

Control group ~ 500 students in a financial education class

Experimental group ~ 100 student in a financial education class plus nudging texts encouraging: Set a savings goal Open a savings account at a bank or credit union Contribute regularly

Ideally with a direct deposit

Original study 4 messages per week for two months

National study 3-4 messages per week for six weeks

Nudging Results

Do you have a particular savings goal?

Experimental* – Pre: 79% of total students said yesPost: 94% of total students said yes

Control – Pre: 64% of total students said yes.Post: 69% of total students said yes

*My students had already set savings goals prior to this survey

Nudging Results Continued

Do you have a savings account at a bank or credit union?

Experimental – Total students said yes: 20% growth

Control – Total students said yes: >1% growth

Nudging Results Continued

Do you make a deposit to your savings account at least monthly?

Experimental – Total students said yes: 50% growth

Control – Total students said yes: 11% growth

Tools to nudge your students

AmericaSaves.orgStrictly savings

Remind101Craft your own messages

Making choices “sticky”

Choices are “sticky” when they’re easiest In other words – “opt outs”

Saving as the defaultDirect deposit (split deposits) into savings, checking,

(and eventually retirement products) Start small, otherwise savings accounts turn into a

second checking account

Spending as the default Auto payments can be beneficial but…

Verizon “Edge Program” as an example

Decision fatigue

What is decision fatigue?

Overcoming decision fatigueBefore making a big decision…

Sleep on it Check your budget Talk to your spouse Check your balance on your phone* Use comparison shopping apps like “Red Laser”

Choice architecture

What is choice architecture?The way decisions can be influenced by how they’re

presented.

ExamplesBuffet “Opt-in” – Verizon Edge

“AA” for personal finance

Peer groupingPartner/group with someone who has strong will

power toward the stated goalPartner/group with someone with like goals

Fun ways to interactEncouraging texts Saving contestsConsequences, your friend takes a favorite item if

you impulsively spend

Study Finding: Teens are stressed about moneyThe “Why’s” are important, the “Why’s” are examples of how we can make lessons relevant

How to make lessons relevant…

Plan your lessons and design your tests looking at the financial world through the eyes of a teenager.

Study: Teens are stressed about money

The cost of college

Teen households are becoming poorerMedian income is down nearly 10% since 1995

Taxes are complicatedOnly 3 of every 100 teens have filled out an income

tax forms.

Teens use their own money on purchases but lack fundamental money management skills.

Addresses Stresses – The Cost of College

Relevant lessons aligning concepts from national standardsComparison shop colleges

Sticker price / Pricing strategies; Coupons (School scholarships, grants); different types of degrees; FAFSA

Consumer Financial Protection Bureau “Paying for College”

Principles of borrowing (student loans) Interest; the maximum to borrow; Does it improve your

future self

Return on the investment (college) Importance of good grades, networking, employable skills

Addressing Stresses: Eroding Incomes

Relevant lessons aligning concepts from national standardsStart them down the path of saving while they’re

young and it’s easier! America Saves Pledge and Texting Nudges Council for Economic Education Compound Interest

Calculator

Addressing Stresses: Taxes

Relevant lessons aligning concepts from national standardsMost students will qualify for tax refunds!Have them complete a W2, and a 1040EZ with a

simulated W4. Allow them to use their own W4 and bring in their

own 1040EZ during the exercise. IRS Understanding Taxes Free File

Addressing Stresses: Money Management Skills

Goal Setting

Have them establish their own short term S.M.A.R.T. savings goals. Common student goals: Saving for prom, a car, a phone, new

shoes (Jordan’s), spring break, college Reinforce the rewarding feeling of reaching a savings goal.

Saving isn’t just for emergencies, it’s for future spending too

They should experience early on the rewards of saving

Long term goal setting strategy Begin with student visualizing seeing himself/herself in the

mirror at an older age. Walk them through a “day in their lives”

Addressing Stresses: Money Management Skills

Budgeting

Priorities, values, and goals

Let’s call him Tim Spousal/roommate activity

Address the contradiction of behavior and knowledge Budgeting simulation:

Students saved last Test questions: Students knew

to save first and spend second Why? Scared that wouldn’t

have enough. Great teachable moment!

Addressing Stresses: Money Management Skills

Choosing a Financial Institution

Shop Around – It’s like dating! You never marry one, you spend your life dating.

Minimize, or if you can… avoid fees Minimum balance requirements Overdraft fees

Establish a savings account, a checking account, and a direct deposit into both

Take advantage of mobile banking options Mobile banking; text alerts

Overdraft protection – it’s like insurance you typically only have to pay for if you make a mistake

Addressing Stresses: Money Management Skills

Using Mobile Phones as Money Management Tools

Mobile phones for financial management and financial decision makingMobile banking

Text alerts Checking balances before big decisions

Comparison shopping apps like Red Laser

Teach them to use them safelyDon’t use public Wi-FiHow to set up a safe password

Il2g2c!

Addressing Stresses: Money Management Skills

Comparison Shopping

Comparison shop for an automobile

True Cost to Own Calculator Cost of the car Depreciation Gas Comparison shop insurance

What’s the opportunity cost of owning a car? Less freedom? Tied up future free time Tied up future income for college or an apartment

Bridging Learning to Behavior Further examples

Credit ReportsHave students check their credit report:

annualcreditreport.comHave students set annual phone reminders to check

their credit report at annualcreditreport.com

Follow key organizations like the FTC on social media

Comparison shop automobile insurance plans

Special Education Students

Three universally effective strategies…

Peer to peer learningConsider cognitive ability, relationships, and

behavior

Game-based learningOnGuardOnline.gov

Performance based learningComplete a 1040EZ, rather than question about a

1040EZ

Experiences matter most

Field Trip Examples “A Walk Down Wrong Street”Bank or Credit UnionAuto dealershipsGrocery store or mall

Test Questions

Design test questions to align with national standards

Include ways to assess students understanding of putting learning into action

Critical thinking; application of concepts

Design test questions through a teenagers eyes

Old Test Question

Select the term describing the process of setting income aside for future spending.

a. Credit Card

b. Spending

c. Saving

d. Investing

New Test Question

Select the best savings strategy for Michael, a teenager with a job and access to a direct deposit

a. Direct deposit income into a checking account

b. Direct deposit income into a savings account

c. Elect to receive checks rather than use a direct deposit service

d. Direct deposit a portion of income into a checking and a portion of income into savings

Old Test Question

Select the term defining the purchasing goods or services without considering needs, goals, or consequences.

a. Saving

b. Investing

c. Impulse Buying

d. Delayed Gratification

New Test Question

If making an impulsive choice, which financial decision to overspend would be more costly over time?

a. Flexible expense, such as overspending on a purse

b. Fixed expense, such as overspending on a car

c. Flexible expense, such as overspending on prom

d. Flexible expense, such as overspending on dinner

Classroom Twitter @TeenDollars

Stated Purpose: Help teens with the financial choices they have to make now

Hidden Purpose: Nudges, motivation

The 21st century classroom wall?

How I manage it. I only follow organizations and leaders dedicated to my

stated mission I do not follow students; but have hosted “student chats” “Financial tweets” are relevant to their current choices I insert humor, motivational posters, and student successes Tweets are timely

Example organizations I follow

#StudentChat

Example “Financial Tweet”

Example “Financial Tweet”

Example “Financial Tweet”

Example “Financial Tweet”

Example “Financial Tweet”

Example “Financial Tweet”

Example “Inserting Humor”

Example “Inserting Humor”

Example “Inserting Humor”

Teachers are difference makers!

Resources

Hundreds of catalogued Personal Finance Resources http://www.livebinders.com/play/play_or_edit?id=

384905

Catalogued resources specifically for soon to be or recent high school graduateshttp://www.livebinders.com/play/play?id=363714