I’m in beautiful Auckland this week. It’s my first visit to New Zealand’s north island, and I’m impressed. I learned today there are 90 cranes operating in the city, more than any American city. Such development is wonderful to see.
 
I’ve travelled 5,300km to join 70-odd like-minded financial capability academics and practitioners. We’ve come for the three-day inaugural Building Financially Capable Communities Conference. It’s organised by Dr Pushpa Wood and her team. We’re hearing about research and programs and so far it’s been fascinating.
 
Here’s what I’ve taken from Day 1. I’m left with a lot of questions about financial education:
 

We leave young people to join the dots

In her opening keynote, Dr Carly Sawatzki of Deakin University pointed out we learn different money skills at school and home.
 
At school, the curriculum dictates any money-related teaching focus towards technical concepts. This is within Economics & Business, Civics & Citizenship, Mathematics, Technologies, and General Capabilities. At home, we learn about how social and cultural norms affect money, as well as attitudes and values. We experience money use firsthand, and we get to see the reality behind making such decisions.

Slide from Dr Carly Sawatzki’s keynote

By and large, we leave it to our kids to connect what they learn at school and what they learn at home. That means there’s potential for conflict, cognitive dissonance and theory versus practice clashes.
 
Does this serve our young people well? Can we do better?
 

Context matters

On top of letting the kids do the connecting, we tend to treat all students as equal. Like they’re coming from the same perspective and economic conditions. This means cultural context gets neglected.
 
Dr Jodie Hunter of Massey University spoke about her research with Pasifika children in Years 7 and 8 (that’s 10-12 years old in New Zealand). In New Zealand, the Pasifika culture sees money as a shared family resource. It’s similar to how Aboriginal Australians think about money. Both are different from how an Anglo-Saxon family manages money. So, how children from different cultural backgrounds think about money – and answer questions about it – varies.
 
What can we do to incorporate cultural and socio-economic context when we’re teaching?
 

I think I can = I can

Dr Michelle Reyers and Dr Adnan Balloch presented some fascinating findings based on the Panel Study of Income Dynamics. The study examines factors influencing net worth. That’s what you own minus what you owe. It followed 18,000 individuals between 1972 and 2016. Such a long study means interesting correlation analysis across dozens of factors.
 
The aspect that most took my attention was:
  • A high degree of financial literacy meant you were 3.5% more likely not to have a negative net worth.
  • A high degree of self-efficacy meant you were 20% more likely not to have a negative net worth.
So, if you want someone to have more assets than debt, where do you focus? You’re better off helping them feel like they have the capability to manage their money than you are teaching them financial skills.
 
The good news is that perceived behavioural control can improve with intervention. It’s one of the two parts of non-cognitive training, the other being the Big Five personality traits. Cognitive training (i.e. literacy) has its place. But if you want the biggest bang for your buck, I’d say the research points to self-efficacy focused work. 
 
Wow. That’s a big deal. How can we adjust what we teach to make sure self-efficacy improves?
 

Be prepared to kill your darlings

I’m not in academia so I don’t know if this is common, but I adored Dr Jozica Kutin of RMIT‘s call to action.
She spoke about academics using their knowledge to create useful tools. She also encouraged them to listen to the end users instead of assuming you know that they want. She showed us how co-design was used to create a tool for helping 18-29 year olds learn about financial abuse. This included her shock at the most popular design (of four proposed, as voted by the participants) being the one she had thought least likely to work.

This was the winner, and why – from Dr Jozica Kutin’s slides

What darlings and assumptions are we hanging on to? Is that making our financial education less effective?
 
Back with more observations on Days 2 and 3 of the conference soon.

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