Financial literacy is an essential life skill. During the past year, there has been significant growth in the number of U.S. students taking personal finance classes. Some have called this increase in financial education a movement, even an “inflection point” — i.e., a time of significant change and progress.

I recently attended several webinars and virtual meetings about financial education and participated as a panelist on a Twitter chat about the role of financial education in adult financial well-being sponsored by the University of Chicago Financial Education Initiative.  

Below are eight of my key takeaways about financial education from these programs:

Doing Nothing Is Not a Good Option 

Costs result from a lack of financial literacy. As I noted in a 2013 blog post, these include forgone savings and investment opportunities, lives shattered by financial loss or bankruptcy, higher-than-necessary prices paid for goods and services, dreams and aspirations that go unfulfilled, and marital discord about money. The collective loss in dollars resulting from common financial errors is a big number.

“Improvement Paradigm” Outcomes

Instead of focusing on very specific financial goals (e.g., saving $1,000) as outcomes to measure the success of a program, focus on progress that people make over time. If they are moving the needle in the right direction and making small incremental progress steps over time, count that as a “win.” Achieving small financial successes can inspire people to go on to do bigger and better things.

FinTech Is Not a Substitute for Financial Literacy

There is no shortage of fintech apps today to help manage your finances. For the most part, this is a good thing, and these apps appeal to tech-savvy young adults. Fintech is not a substitute for financial literacy, however. It is a compliment. People still need to understand basic financial concepts and skills such as reconciling a checking account balance and preparing a budget.

Youth Respond to “Right Now” Topics

Focus youth financial education around what they need to know today rather than for their life in the future. Information will be more relevant and better received. That said, help young adults connect their present-day decisions to future outcomes. One of the most important topics to teach teenagers is the awesome power of compound interest and long-term investing.

Avoid “No” and “Don’t” Language 

It is human nature for youth (and adults) to rebel against, or tune out, warnings about things they are told not to do (e.g., invest in meme stocks or take out payday loans). A better option is to discuss the pros and cons of various financial decisions and suggest suitable alternatives, if available. Also, make personal finance “personal” using powerful stories and financial calculators.

Relatable Analogies

One investment analogy that I heard is that asset classes (e.g., stocks, bonds, cash assets, and real estate) are like food groups. Just like people need to have a combination of colorful foods during meals, so, too, investors need to have a combination of investments. People should neither have a plate of French fries every day for dinner nor put all of their money into one stock. Diversification is very important.

Adult Financial Education Impacts

Impacts mentioned on the Twitter chat included changing people’s misperceptions and aspirations. Many people do not fully understand the awesome power of compound interest to build wealth over time or think that they have to fund financial goals sequentially (Goal 1, then Goal 2, then Goal 3) instead of concurrently (save for financial goals 1, 2, and 3 at the same time). Many people also underestimate the importance of small steps (savings, gaining financial knowledge) that add up over time.

Financial Struggles

Low- and moderate-income households in “survival mode” struggle to get through the month paying for essentials such as food and housing. Others struggle with finding a job and “either/or” decisions — e.g., saving or reducing debt with extra cash or deciding whether to invest or make extra mortgage principal payments. Another common struggle is deciding how much money is “enough” to retire comfortably.

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