So your institution has taken the important step toward educating students about not only the ins and outs of their major, but the ins and outs of life, and student loans, through a financial literacy program. With the average amount of student loan debt hovering around $30,000 per college student, helping young people understand the importance of financial management as well as orienting them toward making strong financial decisions for a lifetime has always been iGrad's mission. It's why we developed our own financial literacy curriculum, along with authors Sharon Lechter and Angela Totman, entitled Your Financial Mastery.
But intending to teach financial literacy to college students and actually breaking through to them are two entirely different things. As any educational professional knows, and as our market research has proven, capturing students’ attention is the key to actually engaging them in the learning process and making a potentially boring topic like finance "fun" for even the most non-mathematical mind. Your Financial Mastery does this through a "flipped classroom" format, which relies on engaging instructor-led activities based on real-life situations and scenarios and interactive exercises. Today, we'd like to share four of our favorites from the Your Financial Mastery financial literacy textbook.
[Looking for more innovative ways to engage your students? Read, How to Make Financial Literacy Go Viral with Social Media]
1). Break the Ice with an Engaging Video
During the first couple of sessions of a financial literacy course, showing students why their decision to be there is so important makes a lot of sense. A general lack of personal finance education among adults is a budding national crisis that has huge implications on the future of the United States' economy and has resulted in new education legislation proposals. However, statistics don't typically engage the young and financially reckless.
However, real-world examples from peers get a student’s mind moving. iGrad recently produced a video that that does just that in a real and humorous way that leverages pop culture to showcase the ever-so-common lack of basic finance skills. Using this as a conversation starter, even as a comparison to students' own knowledge, is a really good way to illustrate the dire nature of this lack of financial literacy. And, paired with the statistics, it becomes a crucial wakeup call to the next generation. Check out the video below.
2). Class Discussion - Leveraging Pop Culture and Broke Celebrities
Lead a discussion based on the following question: Does income reflect wealth? Even a quick Google search reveals that clearly the answer is "no." Celebrities, from athletes and actors to entertainers and producers, have routinely made more money than most of us will ever see in our lives, yet still end up bankrupt. Similarly, most students will know of people in their own lives who have made bad financial decisions despite a relatively high income. On the flip side, entire families can comfortably live on as little as $30,000 if they budget correctly, avoid debt, and reduce their expenses.
All of these examples, whether rooted in personal experience or popular culture, open the window for a large discussion about topics students enjoy (e.g., celebrities), while painting a clear picture of the difference between wealth and income and the importance of careful financial management.
3). Group Activity - Would You Give Yourself a Loan?
Typically, people think they are great candidates for a loan, whether it’s a car loan, a personal loan, or mortgage loan. This activity forces students to flip the conversation and discuss what it would take for them to give a loan to someone else or even themselves, especially if their own money or livelihood were on the line. Break your students into small groups of 3-4 members. Assign one group member to act as a bank while the remaining group members act as loan applicants. Once roles have been assigned, tell your students that are acting as bank employees to conduct interviews of loan applicants to determine who they would and would not give a loan to (Students should have the option of using authentic answers or creating a different financial “persona”). Some key components to consider while bankers are interviewing their applicants include:
- Does the applicant have verifiable income? Applicants should be prepared to provide ways to verify income.
- What other proof would you need of the borrower's ability to repay?
Ask bankers to decide if income is enough to determine this as well as list what other factors (debts, for example) play a role and why.
- What is the loan for and who does the applicant owe?
Bankers should ask questions to determine the reason for a loan. This will constitute good and bad reasons for a loan.
4). Class Discussion - Needs vs. Wants
Most people don't really understand the difference between needs vs. wants when it comes to the basics of life and survival. In fact, they spend a lot of time justifying wants, like cell phones, in order to make them needs, all of which skews their perspective.
Ask students to list and discuss the difference between needs and wants, which helps reveal the differences between life's conveniences and actual survival. This shift in perspective is a great buildup to discussing the purpose of a budget. That is, it is not about restrictions, but empowerment. By laying out a plan for your money each month, people are able to make smart decisions and feel good about them, rather than merely justify irrational desires.
These four engaging student activities are just a few of the many ways instructors can use the "flipped" classroom model to start productive, lasting conversations about financial decisions. The Your Financial Mastery curriculum uses these activities for exactly that reason, along with other modern engagement-focused concepts like web-based learning and the powerful financial literacy curriculum companion site.
[For more information about iGrad's Your Financial Mastery - Financial Literacy Curriculum Online Companion Site, read It’s True! iGrad's Financial Literacy Curriculum Gets Powerful Online Support]
The financial crisis of 2008 and the Great Recession that followed were a wakeup call to many adults to finally take control of their financial decisions. Unfortunately, many failed to heed that call and still others failed to pass it along to their children. However, placing blame is not going to pay back the over $1.2 trillion of current outstanding student loan debt. Only knowledge can do that, and it all starts with a strong, focused, and engaging financial literacy curriculum.