Why quick fixes won't save teens from bad money choices

It is vital to customise and personalise financial literacy content and learning experience to bring about true change

Teaching youth money skills requires a deep and profound engagement about personal finance. Getty Images

“Cruel optimism” was first coined by American historian Lauren Berlant. It refers to when you take a big problem with deep systemic causes in society – such as obesity, stress or financial illiteracy – and offer a simplistic solution positively.

It’s optimistic as it implies a quick and easy solution to a complex problem and is seen as cruel as the solution offered is limited, not to mention short-sighted. Often, such solutions do not consider the deeper causes of the problem, and so will fail to work for most people.

It’s in our nature to look for quick fixes, instant gratification and magic bullets. We hastily throw half-baked solutions at convoluted, insidious problems and are quick to declare “mission accomplished”.

It makes us feel smart and decisive; it makes us look powerful and saviour-like; it also makes for great social media news bytes – short and superficial – just like our attention span is primed to be nowadays.

But take a closer look and you will see that such hurried and cursory actions, without a thorough well-examined study, exacerbate the existing problem.

Take the issue of the lack of personal finance knowledge in young people today.

An issue as convoluted and insidious as any, because of the substantial toll it takes on their future and that of the economy.

In the US alone, the cost of financial illiteracy was calculated at $415 billion in 2020, according to the National Financial Educators Council.

This problem didn’t garner much attention previously, but the Covid-19 pandemic and the ensuing economic meltdown thrust it into the spotlight worldwide.

Several solutions followed: money tracking and budgeting apps, parent-controlled debit cards, online resources, self-help books, mandatory lectures and financial education programmes … the list goes on.

All touting to expeditiously, effortlessly and – for a small fee – rid society of this menace forever and save the future generation from the perils of bad money choices.

If it seems almost too good to be true, it is. Many of these organisations failed to study and understand the battlefield properly before rushing to market lofty claims and promises.

They didn’t pay attention to the needs and motivations of those they were purporting to help; they just swooped down and lectured them on responsible behaviour.

They ignored moulding the mindset of young people while jumping straight into budgeting formulas.

They assumed that what worked for adults would automatically work for teenagers, forgetting that teenagers aren’t mini-adults – their brains are wired in completely different ways.

They oversimplified and dumbed down the content, not understanding that nuance and complexity are interesting and engaging, not to mention a more realistic representation of the issues at hand.

They believed that personal finance could be summarised in a few quick tips, not recognising that doing so undermined the very learning they were hoping to impart.

They fell prey to the myth that teenagers need to be entertained with short punchy videos, even though only profound engagement would elicit true behaviour change.

They completely overlooked the way the content was taught to young people, grossly undervaluing the use of a tried-and-tested methodology to ensure that the content was delivered most effectively.

They delivered a “McProgramme”, identical irrespective of who it was being delivered to, not realising how important it is to customise and personalise the content and learning experience to the learner.

They, like much of the education system, focused on telling the youngsters what to think, instead of showing them how to think.

All this didn’t dampen the profits or valuation of these organisations; it just failed to solve the underlying problem.

It laid out the equivalent of an attractive plaster over a deep cut and hoped for the best.

We cannot afford to delude ourselves into complacency. The younger generation deserve better.

We shouldn’t be so quick to mortgage their future for a fleeting feeling of self-satisfaction. We need to stop with the quick fixes.

We owe it to youth to think deeper about the problem, to understand the prevailing issues better and to plan our offensive with more forethought and consideration.

We have to resolve to deal with not just the symptoms, but, more importantly, the deep-rooted problem.

For it is only by deeply understanding a formidable problem that we can ever hope to overcome it.

Marilyn Pinto is the founder of KFI Global