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Financial Wellness Gaps and Best Practices

October 12, 2018

While financial wellness is an everyday topic for those of us who work in financial aid, Financial Aid Day is a perfect time to consider gaps in financial wellness education and share best practices for helping to instill financial wellness knowledge and skills. Tasha McDaniel and Michiale Schneider, accredited financial counselors and Great Lakes trainers, recently shared what they learned at the 2018 Annual Conference for Financial Education in spring 2018 with us.

Many college students lack crucial skills and habits such as creating a budget, having an emergency fund, identifying needs versus wants, being aware of impulse buying, being credit conscious (and knowing their credit score), and evaluating the options of maintaining or replacing items. A helpful K–12 curricula would begin developing these concepts in earlier years, with parents sharing financial wellness decision-making and planning concepts with their kids rather than shielding them from all financial matters. Demonstrating good financial wellness habits and explaining these to kids is a powerful teaching tool.

Piechart depicting 92% of K–12 teachers who believe personal finance should be taught in their classrooms versus 12% who actually address these topics

92 percent of K–12 teachers believe personal finance should be taught in their classrooms, but only 12 percent actually address these topics

A Knowledge Transfer Gap: Parents and Teachers

Apparently, teachers and parents believe those in the other group are tackling personal finance topics with today's kids. While the vast majority of K–12 teachers believe personal finance should be taught in their classrooms, only 12 percent of them address these topics. In part, this may be due to a mistaken belief that parents are teaching personal finance, as well as limited resources.

The facts tell a different story. Only 12 percent of parents set aside time to discuss financial topics with their kids. Uncertainty about how to talk about financial matters may factor into these numbers, with 51 percent of parents claiming they don't know the best way to approach the topic. Studies show 69 percent of parents are reluctant to discuss financial matters with their kids. In fact, research shows parents feel more comfortable talking about terrorism and politics than family finances!

Bridging this financial wellness learning gap requires a concerted effort on all fronts.

A Multi-Faceted Approach Works Best

While the offering of personal finance class sends a message that learning about finances is important, a combination of in-class and online activities is the best way to engage students who have grown up attached to their phones. In all cases, in order for financial wellness education to stick, it has to be memorable, timely, and create a need for action now by explaining why it matters.

Project Learning

Financial wellness projects are a great way to make concepts applicable to the student's world. Taking students out of their comfort zone, forcing self-evaluation, and keeping them accountable for learning are some advantages to assigning projects related to financial wellness. Projects can work really well in conjunction with a flipped classroom style in which assignments are given first before the information is taught.

It's important to make expectations clear so there are no surprises—and to help students create a project map that allows them to set smaller goals and checkpoints. When it's complete, a discussion board, reflection paper, or survey that lets students evaluate the project from their perspective can help gauge its impact.

Peer Mentoring

Tasha says peer mentoring programs aim to help students establish a relationship with a peer who has financial knowledge and management skills, as well as finely tuned communication skills.

A variety of topics are ideal for exploring in a peer mentoring situation that might be more difficult to cover in a classroom setting. For example, peer mentors can be really useful in helping students explore topics and learn skills related to banking, budgeting, credit, financial value systems, net worth, education loans, and financial goal setting. Another helpful assignment can have students writing and understanding their money story.

Don't Forget These Important Topics

The best case scenario is to cover all types of financial wellness topics. These are a few critical ones that are sometimes overlooked in financial wellness curricula:

  • Predatory lending
  • Payday loans
  • Disputing credit errors
  • Understanding Satisfactory Academic Progress
  • Connecting students to resources (such as transportation, housing, food assistance)

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