The choice to invest in higher education is one that will affect students and their families for the rest of their lives—from the financial opportunities that present themselves as a result of obtaining an undergraduate degree to the newly acquired debt that made it all possible. Add to that the necessity of having to plan for retirement and it’s clear that Financial Literacy is more important now than it has ever been.
Starting a Financial Literacy Program at your school is only the first step in preparing students for the twenty-first century economy—the next is getting them started. Here are 5 strategies you can use to boost participation, increase access, simplify use and maximize engagement.
1. Incentives Increase Participation
Incentives are a great start and they are not bribes! They are meant to encourage simple behaviors, where intention can be converted into action. Research in behavioral psychology, behavioral finance, and wellness programs show that incentives work best when participants are starting or on-boarding a program.
Incentives can be monetary or non-monetary. Access to learning opportunities (such as exclusive conferences, workshops or summer programs) or t-shirts can work just as well or better than cash and gift cards.
By leveraging an online learning management system (LMS) like iGrad’s financial literacy platform, incentives can be tied to specific actions such as signing up, creating a personalized profile, completing certain recommendations, and exploring relevant features (such as loan tracking or resume tools).
According to a recent survey conducted by Mercer Global, a global consultation firm, 56% of large employers use incentives in their wellness initiatives. In 2014, in another Mercer study, large employers using incentive programs reported higher participation rates.
2. Stop Asking for Permission: Switch to Opt-Out Strategies
Opt-out strategies standardize financial education and ensure that every student has access to resources. Coupled with an effective communication plan and meaningful incentives to start, providing the choice to “opt-out” ensures that students are aware of the availability and benefits of participating in a Financial Literacy Program.
Organizations have successfully used opt-out strategies in benefits programs, 401k programs and campus wellness (such as gym membership and mental health services). According to a presentation at The Future of Financial Wellness for the Stanford Center on Longevity by Dr. David Kaplan, automatic enrollment in a 401k plan increased participation from 59% to 86% and “helps people save sooner—for those 6 months on the job, participation went from 34% to 90%.”
3. Commitment Contracts:
Commitment contracts are a cross-disciplinary strategy that has been shown to work on two levels: 1.) As a prompt to complete agreed-upon behavior and 2.) as a way to set a goal, place something at stake, and use what’s at stake to be held accountable.
Schools have a number of resources outside of financial literacy that they can leverage in order to maximize the impact of a commitment contract. The goal for these contracts is not to punish students but to set personal expectations and create meaningful consequences for completing them.
In his paper, Exploring the Impact of Learning Contracts on Student Commitment and Academic Performance, Timothy Frank proposed that “solidifying the commitment on paper may have been the difference between good intentions and action,” after seeing 78% of students on contract improve their grades versus 59% without.
4. Personalized Goal Setting
Personalized goal setting is a way for students to measure progress based on what they accomplish. This strategy has been employed across a variety of organizations and purposes. Individualized education plans are used in public education for high-achieving or low-achieving students. Personal weight loss goals are most effective when tailored to a person’s level of activity, nutrition and body.
Personal goals work when they are attainable, and feedback is meaningful when it can be used to adjust behavior—showing students when they are excelling or when they have more work to do. Financial Literacy curriculums lend themselves to this type of goal setting and achievement, as progress metrics and recommended content comes packaged in their services.
5. Make it Fun! Programs, contents, etc.
Joy is one of the most powerful known motivators, and it is experienced through different kinds of interaction. Based on several key motivational theories, joy can be brought on through competition, belonging, curiosity, learning and mastery among other sources.
Group reward programs and contests can be used to support engagement around financial literacy curriculums or on application of financial concepts. Users can be evaluated based on reporting features or on completing specific content.
Doorways to Dreams--a non-profit organization that provides financial products and education services for low and moderate income consumers—started a Save to Win program in Michigan where each $25 deposit enters users into annual and monthly contests to win up to $250 a month.
As addressed in previous articles, FINRA has noted the positive results of financial literacy education. Schools now face the challenge of engaging their students in a meaningful way to best equip them with the skills they need to lead successful professional and financial lives. Though there is no one-size-fits-all approach to increasing student use of financial literacy resources, segments of the population can be targeted using a strategy that appeals to them the most.