NBEA partially describes its Economics and Personal Finance standards as follows: “The growing emphasis on financial literacy has highlighted the need for students to learn how to navigate the financial decisions they must make and how to make informed decisions related to managing finances and budgeting, saving and investing, living independently, earning and reporting income, buying goods and services, using credit, banking, and protecting against risk.”(Economics and Personal Finance. (n.d.). Retrieved from https://www.nbea.org/newsite/curriculum/standards/economics.html)
Many of the Personal Finance/Financial Literacy curricula I have seen make the assumption that the individual (our students) is navigating in a fixed environment. We teach them how to protect themselves from scams and frauds. We teach them how to understand the system so that they can make decisions that protect and make the best use of their assets and resources and we encourage them to take a deliberative long view for their financial futures. This approach sees the business/financial world as being a world created by others and in which ‘regular’ people have to survive/cope. Unfortunately, we portray a situation where the individual feels they have little if any power to influence or change the system. We essentially imply that we live in this environment and we must cope with this environment as it is presented to us.
In many of these courses, we do provide our students with good foundational information. We help our students understand issues surrounding scarcity and allocation of resources, how markets work and we encourage our students to embrace long term thinking and planning. We tell our students that we collectively vote with our dollars in the market place but we rarely if ever, as individuals, encourage them or teach them the skills necessary to influence what appears in the marketplace.
The essence of this blog entry is to argue that we have a responsibility to our students to have them see that they can be agents of change in our economic/business environment. In other words, they can become entrepreneurial as consumers and activists in the marketplace. It is not sufficient for us to have students learn the skills of long term planning, self-protection, fraud detection, and asset allocation. We should be helping our students acquire the skills needed to be able to influence and change their environment.
An interesting thing happened in my family a number of years ago. My children were still in school and I had just celebrated my 55th birthday. My children and I got notices from our banks letting us know that we were eligible for reduced (perhaps $0) monthly fees for our bank accounts. Although I had a good job at the time and the expectation of a good pension, I knew that many seniors would find this reduction in fees very beneficial. I also knew that as students my children worked on very thin budgets. I appreciated the bank’s consideration of the needs of seniors and their intention to help students invest in their own futures.
If this scenario were to be used as an instructional tool it is likely that two ideas would be considered arising from the following question: Why does the bank offer reduced monthly fees to seniors and students? The first idea would help my pupils understand that the bank reduces fees to seniors because in many cases seniors have substantial assets – their home, their pension, investments, etc. – and this is an effort by the bank to retain seniors as customers. In the process, banks are also producing significant social good for those seniors who do not have significant assets and/or are living on fixed incomes.
The second idea would arise from a consideration of why the banks offer reduced or no fees to students. Understanding consumer behavior leads us to realize that in fact, the banks are making an attempt to attract students who will become loyal customers of the bank as they move through their lives. An early introduction to the systems, personnel, and policies of the institution often leads to persistence in the relationship.
These are important ideas for our pupils to grasp. It is important that they recognize and understand corporate motivations. This is not to have them recognize ‘evil intentions’ but to be clear-eyed as they make their ongoing financial decisions.
I would argue though that there is another idea that should be brought to bear on this topic as it arises from the scenario described above.
That idea arises from the following question: Given that we know that a difficult time of life (financially and otherwise) for many people is just after they graduate, start their first jobs, start a family, buy a home, etc. why don’t banks offer reduced fees to graduates who are just starting out in life?
This points to using Financial Literacy/Personal Finance courses as preparation for entrepreneurial activity in our personal/public space – Finding gaps, asking why, asking why not, thinking about what to do about the gap, overcoming the obstacles, etc.
Beyond this encouragement to look critically at our surroundings we should also be encouraging our students to be activists. They should consider whether they agree that reducing fees for young, beginning adults is worthwhile. If they do agree what can they do about it? Do they have the skills to do the research so that they can formulate informed, reasonable arguments that might effect change in the banking industry? What would be the social good that would arise if the bank reduced its profit by whatever costs would be incurred by reducing monthly fees for young adults? How could they approach, present and influence various corporate structures – administration, boards, shareholders, etc.?
In summary, I am suggesting that we move beyond description and self-protection in our courses and that we include a focus on entrepreneurial consumer behavior as well as an activist stance for our students.
I am curious about the experiences and opinions of Personal Finance/Financial Literacy teachers regarding these suggestions. Please feel free to comment on this blog or email me directly at Cyril.firstname.lastname@example.org
About the blogger: Cyril Kesten is a Professor of Education at the University of Regina since 1978. Prior to coming to the University, he was an elementary and high school teacher. He has a deep interest in personal stories and how they contribute to personal development. Connect with him on Twitter at @ or at email@example.com.