Bridging Learning to Behavior

1. Bridging Learning to Behavior Brian Page Personal Twitter: @FinEdChat Classroom Twitter: @TeenDollars

2. Nuts and Bolts of Personal Finance • Tools we use to manage our personal finances • Example: Banking services • Concepts applicable to financial scenarios • Example: Power of compound interest • Each are often found in standards • Council for Economic Education • Jump$tart • State Standards • “Nuts and Bolts” don’t turn themselves!

3. To bridge learning to behavior… + Tools + Concepts + Behavior Strategies + Relevant teen topics Prepared

4. 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

5. 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

6. Nudging Results • Do you have a particular savings goal? • Experimental* – • Pre: 79% of total students said yes • Post: 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

7. 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

8. 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

9. Tools to nudge your students • AmericaSaves.org • Strictly savings • Remind101 • Craft your own messages

10. Making choices “sticky” • Choices are “sticky” when they’re easiest • In other words – “opt outs” • Saving as the default • Direct 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

11. Decision fatigue • What is decision fatigue? • Overcoming decision fatigue • Before 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”

12. Choice architecture • What is choice architecture? • The way decisions can be influenced by how they’re presented. • Examples • Buffet • “Opt-in” – Verizon Edge

15. “AA” for personal finance • Peer grouping • Partner/group with someone who has strong will power toward the stated goal • Partner/group with someone with like goals • Fun ways to interact • Encouraging texts • Saving contests • Consequences, your friend takes a favorite item if you impulsively spend

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

17. How to make lessons relevant… Plan your lessons and design your tests looking at the financial world through the eyes of a teenager.

18. Study: Teens are stressed about money • The cost of college • Teen households are becoming poorer • Median income is down nearly 10% since 1995 • Taxes are complicated • Only 3 of every 100 teens have filled out an income tax forms. • Teens use their own money on purchasesbut lack fundamental money management skills.

19. Addresses Stresses – The Cost of College • Relevant lessons aligning concepts from national standards • Comparison 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

20. Addressing Stresses: Eroding Incomes • Relevant lessons aligning concepts from national standards • Start 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

22. Addressing Stresses: Taxes • Relevant lessons aligning concepts from national standards • Most 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

23. 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”

24. 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!

25. 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

26. Addressing Stresses: Money Management Skills Using Mobile Phones as Money Management Tools • Mobile phones for financial management and financial decision making • Mobile banking • Text alerts • Checking balances before big decisions • Comparison shopping apps like Red Laser • Teach them to use them safely • Don’t use public Wi-Fi • How to set up a safe password • Il2g2c!

27. 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

28. Bridging Learning to Behavior Further examples • Credit Reports • Have students check their credit report: annualcreditreport.com • Have 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

29. Special Education Students Three universally effective strategies… • Peer to peer learning • Consider cognitive ability, relationships, and behavior • Game-based learning • OnGuardOnline.gov • Performance based learning • Complete a 1040EZ, rather than question about a 1040EZ

30. Experiences matter most • Field Trip Examples • “A Walk Down Wrong Street” • Bank or Credit Union • Auto dealerships • Grocery store or mall

31. 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

32. 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

33. 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

34. 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

35. New Test Question If making an impulsive choice, which financial decision to overspend would be morecostly 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

36. 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

38. Example organizations I follow

39. #StudentChat

40. Example “Financial Tweet”

41. Example “Financial Tweet”

42. Example “Financial Tweet”

43. Example “Financial Tweet”

44. Example “Financial Tweet”

45. Example “Financial Tweet”

46. Example “Inserting Humor”

47. Example “Inserting Humor”

48. Example “Inserting Humor”

49. Teachers are difference makers!

50. 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 graduates • http://www.livebinders.com/play/play?id=363714