Why financial education is more than a quiz score

It should encompass new components of technology, social media influences, neuroeconomics and behavioural finance

Parents should be aware of financial education programmes their teenage children are exposed to. Getty Images

Caveat emptor is Latin for “let the buyer beware” – a phrase that holds particular significance when enrolling your teenagers in a financial education programme.

It is up to you as a parent to make an informed choice about which financial education programme your child will be impacted by.

Keep in mind that this isn’t a subject you want your teenager to have just a passing knowledge of. This isn’t about choosing one that’s just satisfactory.

Your teen’s knowledge and expertise on the subject will influence so many critical aspects of their lives. “Satisfactory” won’t cut it here; it needs to be exceptional.

You don’t want someone playing fast and loose with the foundations and principles of smart money management and investing. The programme you choose needs:

• To have been tested on thousands of students and be better for it
• To go far beyond just building awareness to focusing on the implementation of the learning
• To challenge your teenager to think differently and then act in accordance with their beliefs
• To be trusted that there will be no hidden commercial agendas your son or daughter will be subject to

There’s been a lot of talk about the net effectiveness of financial education programmes, which, according to some studies, is marginal, if non-existent. Frankly, that’s not surprising.

If you take a look at the way many financial education programmes are run, in terms of the content they cover and their delivery process, it’s a far from surprising conclusion.

From simplistic perspectives and volunteer staff who aren’t trained to teach teenagers to shameless product pushing and content that is commercially coloured, there is a lot to beware of. Caveat emptor!

Then there is the actual content, which is tedious, uninteresting and mainly taught as a maths-based skill.

Personal finance isn’t a maths-based skill; it has much to do with mindset, attitude and behaviour.

Yet, behavioural finance and an understanding of the interplay of various socio-economic factors are not covered. Caveat emptor!

Parents should be especially aware of financial education programmes delivered by financial institutions.

According to the FoolProof Foundation website, today’s financial literacy education “doesn’t work because virtually all major financial literacy resources are developed or shaped by businesses that benefit when consumers make money mistakes”.

It’s like the fox being asked to guard the chicken coop. Caveat emptor!

There’s nothing wrong with financial institutions sponsoring financial education programmes in schools and colleges; that might be a solution to the budgetary issue most schools claim to have when faced with teaching this subject on their own.

The problem arises when these financial institutions flog their own “bespoke curriculum”, highlighting their products and services targeted at teenagers.

One solution would be to have financial education programmes curated and delivered by a vetted independent third party of trained and trusted experts.

This would ensure that the students get the benefit of the programmes without being subject to implicit or explicit marketing messages. It would also ensure a quality standard and unbiased content.

Financial education, and more importantly financial empowerment, isn’t just a score on a “three-question quiz”.

While that might be a basic measure, it does not even begin to cover what we need our teenagers to know, understand and use about money.

Especially in today’s time, our definition of what constitutes a financial education needs to change dramatically – it needs to provide our teenagers with deep insights, an evolved understanding and a higher consciousness about money.

This means that an exceptional financial education programme needs to go beyond the basic elements that most programmes run through.

It needs to encompass the new and evolving components of technology, social media influences, neuroeconomics and the aforementioned behavioural finance and interplay of various socio-economic factors.

Rather than giving teenagers a quick recipe for financial success, it needs to provide them with a solid foundation in finance and the basic principles to allow them to think and make sense of the constantly and rapidly changing financial landscape.

It needs to give teenagers a sense of control and agency over their own future.

Such a well-rounded and holistic programme, expertly delivered, is exactly what we require for our teenagers.

Anything else is playing into the narrative of a financial programme with marginal utility.

All in all, caveat emptor is a handy phrase to keep in mind when evaluating your child's first brush with this life-changing subject.

Marilyn Pinto is the founder of KFI Global