3 Problems with Financial Education…a Conversation with our Founder

Like many young adults I thought I knew everything about money…and of course I was wrong.

Godfrey Aguwa, Jr.

Growing up I’ve always had this desire to help people. Now originally that meant becoming a doctor however in college I had a change of heart and ended up in the financial education industry. Despite finances affecting virtually every facet of our standard of living, financial education is not as emphasized as it should be. Here are my three biggest concerns with the current state of financial education:

1) Lack of Inclusion

The first is the lack of inclusivity. Money affects virtually every aspect of your life yet despite its prevalence in our society, financial education/literacy is not emphasized in schools-as much as other STEM/STEAM courses. Unfortunately, this leaves lessons on finances to families to teach which can obviously have a negative effect if you live in a household or community that lacks financial knowledge.

Here’s an analogy I use to illustrate this point. I was born in the early ’90s, so I guess that makes me a millennial? Although people crack jokes on millennials I can attest that we were kids during the widespread emergence of the internet (specifically social media) and saw the immediate impact it had on reshaping society. If you were in a family, school, or youth organization that embraced the internet then you were probably encouraged to learn coding, photoshop, website design, and other valuable computer/technology skills that we deem important today. However, if you were in an environment that did not encourage those skills (mind you there were plenty of people that vehemently opposed the technology shift or school districts that struggled with funding) then you may feel that you are at a disadvantage in this highly technical society we live in today.

2) Finance is Pretty Boring

The second problem is that when financial education is taught it’s usually done in a way that’s unappealing. Let’s be honest, the current state of financial education is pretty boring. When I took a finance class in high school it was a snoozefest. We just memorized finance terminology and regurgitated “what-should-you-do” hypothetical situations. With topics such as “how to write a check” or simply focusing on saving, the lessons are not only pretty dated but get redundant fairly quickly.

That’s why I’m such a huge supporter of the emerging FINTECH market and organizations that encourage hands-on and/or digital financial literacy. By making finances interesting and relatable to all individuals we can make a greater impression and change the narrative from finances being boring to finances being exciting. Similar to how organizations showcase fun experiments to get younger generations engaged in the science fields.

3) Shifting Focus from Making Money to Keeping it

Finally, the last (and maybe biggest) problem is that most people focus on getting money as opposed to managing money. Imagine you have a bottle and when you add water to it you notice it has a small hole. Uh oh! What do you do? Well, if you ignore the hole and fill the bottle up water will slowly leak out. However, if you patch up the hole you can add water without worrying about any leakage. Your finances are the same way.

There are way too many individuals that use the phrases “financial freedom” or “financial independence” in the context of simply getting more money. These are your “money can solve all your problems” type of individuals. Unfortunately, they say that in order to intice the general public to purchase whatever service they are selling at the time (usually a real estate course or investment product). The reality is just like that bottle, regardless of how much you money you make (income) you well always have leaks in your finances if you don’t address those holes (typically your expenses like credit cards, loans, etc). I remember hearing the phrase:

It’s not how much you can make, but rather how much you can keep

and I truly believe that most people don’t struggle with making money. It’s the keeping or managing their money that gets individuals in trouble. Making money is easy, it’s keeping your money that’s the real challenge!

Like many young adults I thought I knew everything about money…and of course I was wrong. That’s why we work so passionately to ensure we are promoting the best financial education initiatives that will actually lead to tangible financial behaviors By tackling these three major problems we can create engaging initiatives that result in increased economic opportunity and advancement for all!