The comments below have been copied from a response mailed to the Financial Consumer Agency of Canada relating to their consultation on a National Strategy for Financial Literacy.
I’ve struggled with the problem that it’s taking far too long to deliver a National Strategy for Youth Financial Literacy in Canada.
I really believe that the problem is not about having enough resources or having enough organizations or experts that want to assist. As a Country, Canada is blessed with all of that. I believe that the real problem is the delivery of a Financial Literacy to Youth and the answer appears at least to me so obvious…
Let’s use technology to deliver Financial Literacy to youth who have grown up in a technology enabled world.
It’s not about generating more financial literacy resources – let’s expedite the delivery of those resources in an efficient and effective way…
In 2005 the OECD had this to say about Improving Financial Literacy
Financial education can benefit consumers of all ages and income levels. For young adults just beginning their working lives, it can provide basic tools for budgeting and saving so that expenses and debt can be kept under control. Financial education can help families acquire the discipline to save for a home of their own and/or for their children’s education. It can help older workers ensure that they have enough savings for a comfortable retirement by providing them with the information and skills to make wise investment choices with both their pension plans and any individual savings plans
– OECD, Improving Financial Literacy: Analysis of Issues and Policies, 2005
That was 2005 but now it’s 2014 and almost 2015
9 years later…the need for financial literacy education is only more critical in a much more complex & “consumerism” oriented world that we all live in today. On a personal level, 9 years later, I’m older, crankier and a lot less patient in waiting for youth financial literacy to become a priority. My oldest graduated high school in Ontario 2 years ago and my youngest son is graduating this year and neither can recall any mention of Money Management, Interest, Borrowing, Saving, Investing, Budgeting, Smart purchasing or financial planning in any of their courses outside of Accounting. I’m glad they came up in accounting as they should, but the problem is that not every student feels inspired to take accounting and in fact, accounting is not offered in every school in the Province. (That’s a different problem that I will refrain from talking about here). Both sons have indicated that there has been no hint of money or financial management matters or advice in any “ Integrated Way” as the Ministry of Education in Ontario likes to promote.
Let’s just agree. The current patchwork theme of programs & integration into current curriculum that depends on motivated teachers & a variety of different resources & materials doesn’t work.
My sons happen to be otherwise, lucky. They have taken accounting in high school in order to have a basic knowledge of how to account for money from at least a business perspective and their Mom is an accountant and their Dad is in finance. That leads to a lot of talk about money around the house and we can help make them financially literate. But what about other students? Surveys show that the majority of families don’t discuss finance and money management at home. A designated financial capability program inside the curriculum across each school board is what’s required for our youth.
It’s critical for youth to have financial literacy skills.. It’s critical because life is a lot more complicated these days, where “consumerism” is rampant, marketing is aggressive & excessive, Credit Card applications are easy to come by and even the Government is in the business of supporting gambling, in the form of tickets, online betting, Bingo & slots. It’s critical for students to learn basic if not intermediate skills, to become good consumers and navigate the good from the bad. But it’s also critical to the future economy of Canada. It’s also particularly critical to have financial literacy skills in place for those 46% of youth who are expected to start a business after graduation.
The results of a study commissioned by the Investor Education Fund for both 2012 and 2009 make the case for how far we have not progressed in the area of Youth Financial Literacy
The results for 2012 show little if no progress over 3 years. Instead, the results highlight a greater need:
-Only 26% of students felt they were knowledgeable about money & that they made good spending decisions (28% in 2009)
-59% of students felt that schools should provide them with information on managing money after graduation (57% in 2009)
-70% of students thought it was important to learn about managing personal finance (64% in 2009)
And…39% of students felt prepared to manage their money after graduation (38% in 2009)
We are failing our Youth in the delivery of Financial Literacy which is detrimental to them & the economy of Canada long-term.
The question for me is not really about the need for generating more financial literacy resources. There are lots of great and unbiased materials and resources available:
- The Financial Consumer Agency of Canada (FCAC) provides a Financial Literacy database of resources
- EduGains provides resources for Ontario Elementary & Secondary School Educators
- The Canadian Bankers Association provides resources for students across Canada
- Junior Achievement provides tools and games and resources specific to youth
- The Investor Education Fund provides money resources for students, parents & teachers
The question for me instead is more about those resources not being ‘delivered’ efficiently and effectively for the benefit of our youth in Canada. I think that it’s clear from the lack of progress to date as well as the urgency of the need that we can’t deliver financial literacy education by way of traditional methods for youth in particular.
I believe Financial Literacy education can be delivered efficiently and effectively without any further delay with the help of unbiased professionals & financial organizations using technology that exists today. Technology is changing the way we do everything else in our lives so it seems a natural solution (at least to me)
Leveraging technology enabled E-Learning to deliver a Canada wide Financial Literacy program has outstanding potential to benefit youth who have grown up in a technology enabled world. And while I’m not an expert, I believe e-learning offered in a classroom setting (termed “blended learning”) offers additional benefits. Teachers already have the experience required to facilitate active discussion and learning but the challenge of educating teachers on how to deliver financial literacy education in particular seems to be one of the large obstacles getting in the way of teaching financial literacy education in a traditional way.
I think so many people – myself included – don’t feel we do this [handle money] properly in our own lives, so we would need the tools to confidently teach the proper information to our students.
Comment from a teacher Reference: A sound investment-Report from the Working Group on Financial Literacy Ministry of Education-Ontario 2010
We need to change the way that the delivery of financial literacy education is offered. Research has shown that blending online learning with classroom time is the most effective way to learn.
The Internet is plentiful with examples of great e-learning providers, opportunities and solutions. Online learning already provides free world-class education for individuals around the world on a variety of topics.
Listed below are some of the significant advantages of using e-learning as compared to traditional learning which I would suggest would apply to a financial literacy e-learning environment geared towards youth.
- Quicker implementation. E-learning in most jurisdictions already exists with reputable organizations offering e-learning infrastructures already, therefore, there would be no need to invent or re-invent “the wheel”. Learning would not be restricted by the number of trained teachers.
- More Cost effective. For a number of reasons including lower delivery costs, less paper and a reduction in learning compression, E-learning is a more cost-effective way to deliver financial literacy across Canada
- It’s Consistent, Inclusive & Relevant. Regardless of the Province or the location of the School or the School Board education provided by E-learning would be consistent and equalized thanks to an Internet connection. This is a BIG one.
- Better Appeal to a wider range of learning styles. E-learning is facilitated through a variety of activities. A 9 year survey of literature on e-learning states : “Learners learn more using computer based instruction than they do with conventional ways of teaching as measured by higher test scores”
- Tracking progress is easier. Standardized testing can be easily included but e-learning lends itself to knowing when a student is having difficulty with a particular topic without them having to raise a hand. This is a BIG advantage over traditional learning.
- Less ‘teacher talk’ and more ‘student talk’. Who doesn’t like to hear their teacher talk but sometimes, you can learn more effectively when information is shared between students & ideas are exchanged. Blended E-learning makes that possible. A richer learning experience that is repeatable will help learners learn and retain the course content better
- It’s accessible. E-learning can be assessed anytime and anywhere including at home. Parents could also participate more actively (at home) in teaching their children about money and possibly fill their own gaps in financial literacy capabilities
I have provided below, 2 great examples of e-learning options that deliver Financial Literacy Education that I hope you will take the time to review:
The Khan Academy who has done outstanding work in other areas of education has partnered with the Bank of America on a financial literacy project they call Better Money Habits. This site has become a great resource for Americans to learn about and better navigate their finances It helps consumers build their knowledge and understanding of finances through objective and unbiased videos and tools providing the opportunity to help them become more interested in savings and planning their finances.
MoneySense is a national financial education in Singapore offered by The Institute for Financial Literacy and Singapore Polytechnic & powered by Udemy (another much respected e-learning provider). The free financial education program offers an unbiased financial literacy education program to consumers to enhance their financial literacy over 3 tiers: Basic Money Management, Financial Planning and Investment Know-How
These are but 2 examples of the quality of e-learning that’s already in place for financial literacy education. However, I think these examples provide an idea of what Canada could deliver with the help of collaboration & cooperation between the various stakeholders:
- Non-profit financial organizations & financial literacy leaders that have joined together to help move financial literacy forward to date by providing resources
- The appropriate Federal & Provincial Agencies & Departments involved in Education.
- Classroom based teachers who would facilitate delivery & discussion in the classroom
For the sake of our youth and our mutual economies, I think we can and must find the room needed in classrooms and curriculum for financial literacy education by prioritizing the critical need that we all acknowledge it to be. Delivering it by way of e-blended learning inside the classrooms would be effective and efficient. E-blended learning will eliminate any further delay & avoid the excessive expense that might otherwise be incurred to educate teachers first and/or require the hiring of additional educators across such a diverse and huge Country geographically.
A natural place at least in Ontario, I would suggest would be to add it into the Grade 10 Semester where students currently learn about Careers & Civics which coincides with the time when many youth are getting their first job. Splitting the semester into 3 topics to include Financial literacy education I think makes good sense.. Being financially literate is critical when you have a career and being financially literate involves being an active citizen and a smart consumer; which is an important part of Civics. I understand that the BC Ministry of Education chose Grade 10 as the optimum
With respect to your specific consultation questions I would like to also offer the following:
- I agree with the goals set out in the financial consultation paper and the framework proposed to promote a culture of financial well-being
- The suggestions made above referring to an e-blended learning financial literacy education site for youth are my suggestion to the question of programs or services that are or would be effective for helping children and youth learn to manage their money
- Surveys suggest that we cannot rely on parents to teach their children about money. A growing proportion of parents are in need of financial literacy education themselves or are newcomers to Canada. An e-blended learning financial literacy education site would help encourage and facilitate learning at home and may also benefit families as a whole
I hope some of the above will be helpful and constructive to your consultation process. I look forward to hearing more from the Financial Consumer Agency of Canada with regards to your important consultations on a National Strategy for Financial Literacy in Canada.