Tuesday, November 19, 2013

Use Technology to Finally Deliver much needed Financial Literacy Education NOW

Open Letter: Financial Literacy Action Group & the Provincial Ministries of Education 
(Across the Provinces)

Re: Let's use E-Learning to deliver Financial Literacy Education in Canada for Youth 
(NOW please)

Financial education can benefit consumers of all ages and 
income levels. For young adults just beginning their working
lives, it can provide basic tools for budgeting and saving so 
that expenses and debt can be kept under control. Financial
education can help families acquire the discipline to save for a home of their own and/or for their children’s education. It can help older workers ensure that they have enough savings for a comfortable retirement by providing them with the information and skills to make wise investment choices with both their pension plans and any individual savings plans

– OECD, Improving Financial Literacy: Analysis of Issues and Policies, 2005

That was 2005 but now it's 2013 The need is only more critical in the much more complex & "consumerism" oriented world that we live in. 
I'm also much older (and crankier) and a lot less patient. My oldest son just graduated high school in Ontario and despite regular/intense questioning, he could not recall any mention of Money Management, Interest, Borrowing, Saving, Investing, Budgeting or Planning in any of his courses except for Accounting. I'm glad they came up in accounting because I'm an accountant-those kinds of topics should come up in accounting. But not every student feels inspired (or pressured) to take accounting. And that would be OK except for the fact that my son indicates that he saw no hint of money $ or financial management matters in any of his other subjects in an apparent yet say Integrated Way.  And for the record, he has a pretty perfect attendance record; He was not away the day they spoke about money & finance. 

But, my son is one of the lucky ones. He took accounting and so he learned about how to account for money. His Mom is is an accountant and his Dad is in finance; so we can help him with the rest. We also talk about money on a regular basis. But what about all of the other students?

The need is more than clear than ever for youth to have adequate financial literacy skills. It's critical to the 46% of Youth who are predicted to start a business after graduation. It’s critical because life is a lot more complicated these days, where “consumerism” is rampant, marketing is aggressive & excessive, Credit Card applications are easy to come by and even the Government is in the business of supporting Gambling in the form of tickets, Online betting, Bingo & Slots.  It’s critical for students to learn basic if not intermediate skills, to become good consumers and navigate the good from the bad; because, let's face it "Everyone is after your money". 

But Financial Literacy Education is critical to future economy of our Province and our Country. So why is it not happening yet? So why is it not happening yet?  What is taking so long? 

A study on Youthography in 2009 commissioned by the Investor Education Fund Found:

28% of students felt they were knowledgeable about money and that they made good spending decisions
57% of students felt that schools should provide them with information on managing money after graduation
64% of students think it's important to learn about managing personal finance
Only 38% of students felt prepared to manage their money after graduation

By comparison, the 2012 survey that the Investor Education Fund termed "Youthonomics" shows 

26% of students felt they were knowledgeable about money and that they made good spending decisions
59% of students felt that schools should provide them with information on managing money after graduation
70% of students think it's important to learn about managing personal finance
Only 39% of students felt prepared to manage their money after graduation

Yes, Overall-It looks like very little if any progress 3 years later despite all the talk all  the research and all of the recommendations of the Financial Literacy Task Force. We are failing our Youth badly despite the act that there are ways to deliver Financial Literacy efficiently and effectively without any further delay. The question for me is Why are we not using them? 

We could deliver this need effectively and efficiently using technology that exists today. 
Technology is changing the way we do everything else we do today; including healthcare so it seems like a natural solution.

Unbiased Professionals and Organizations can deliver this need effectively and efficiently using technology that exists today. 

The Internet is plentiful with great examples of outstanding e-learning opportunities & solutions.

With the help of unbiased professionals and financial organizations, Ontario and other provinces across Canada could deliver a National Financial Education Program using e-Learning. e-learning is would benefit youth who have grown up in a technology enabled world.
And, while I'm not an expert, I believe e-learning offered in a classroom setting ("blended learning") offers additional benefits. Teachers already have the experience required to facilitate active discussion and learning but the challenge of educating teachers on how to deliver financial literacy education, in a more traditional way, would stop being an obstacle to educating our youth.  Research has shown that blending online learning with classroom time is the most effective way to learn. 

There are other advantages in using e-learning as opposed to traditional learning : 
  1. It's Quicker. Since e-learning in most jurisdictions already exists but also because there are reputable organizations that offer e-learning infrastructures already,  'No wheel needs to be invented or re-invented'  
  2. It's more Cost effective in a number of ways. I'm an accountant; no reason to bore you with the details here.
  3. It's Consistent. Regardless of the Province or the School Board or the School, education would be consistent and equalized thanks to an Internet connection. This is a BIG one.
  4. Better appeal to a wider range of learning styles as learning is facilitated through a variety of activities
  5. Tracking progress is generally built into e-learning programs. Standardized testing is a given but e-learning lends itself to knowing when a student is having difficulty with a particular topic without them having to raise a hand. This would be an advantage to all learning. 
  6. Less 'teacher talk' and more 'student talk'. Who doesn't like to hear their teacher talk but sometimes, you can learn more effectively when information is shared between students ideas are exchanged. E-learning makes that possible. 

A great example of an organization already delivering Financial Literacy Education is the Khan Academy who has done outstanding work in other areas of education. They have partnered with the Bank of America on a financial literacy project they call Better Money Habits. I would encourage you to check it out. 

Better Money Habits 

This is again, just one example of the quality that already exists of e-learning for financial literacy education. Delivery of financial literacy education effectively and efficiently using technology can happen with collaboration between the various non profit financial organizations that have joined together to help move financial literacy forward and the appropriate Federal & Provincial Agencies & Departments involved including those involved in Education.
I think we can find and prioritize opportunities in the current curriculum for such critical education; given the importance we all acknowledge it to be. But if Ontario is looking for a suggestion I would suggest a natural place for it to be placed would be to add it into the Grade 10 Semester where students currently learn about Careers and Civics. Splitting the semester by 3 instead of 2 would seem to make sense to me given the state of Civics at this particular point in time in Canada; it would certainly make sense. I think there is no debating required; Financial Literacy is more critical. However, I would also argue that being financially literate is required when you have a career; and we hope all youth find a career. As well, being financially literate involves being an active citizen and a smart consumer; which would marry it well within Civics. 

Thanks for reading. Let;s get this done together NOW (please)

Monday, November 18, 2013

Youthonomics - Facts from a recent IEF survey on Financial Literacy in High School

Thanks to the Investor Education Fund Study who provided some insight on the state of Financial Literacy in High School 

Much work to be done for the sake of youth and the economy of Canada in general... Can we afford to wait? 

Wednesday, November 13, 2013

The Sad State of Financial Literacy Education

These Infographics can really tell a story. Happy and Sad. While this one is from last year and it refers to US stats we can refer to many of the CDN numbers because we found the data. Perhaps someone creative will make me a nice infographic shortly (I'm not the creative type of accountant that you read about in the news) 

The data is based on a few different studies including an International Study of Financial Literacy undertaken by Visa each year. A barometer of sorts and based on information from 28 Countries. You might want to take a seat: 

  • Wealthier nations spend the least amount of time talking to their children about money. Americans spent approximately 26 days a year whereas Canadian parents only spent 22 days a year talking about money management issues. Parents from Brazil & Mexico topped the list-spending about 42 and 38 days respectively talking to their kids about money 
  • More than half of the countries surveyed believed that their youth do not understand finances. Canada, the US and Bosnia had the worst opinion of the level of financial literacy that their children have-with 70% saying their teens don't understand money management basics.
  • Both in the US and Canada approximately 56% of households do not have a budget. 
  • In the US, 22% of families really don't have a "good handle" on what they spend each month on housing, food or entertainment
  • In the International study, US Teens ranked NEXT TO LAST for their financial knowledge of 28 Countries at NUMBER 27. And Canada? Canada came in at NUMBER 26
  • In the US, Only 13 States (in 2012) have made a personal finance course mandatory in school. What are the requirements across Canada. We will reach out to find out. We know in Canada...Financial literacy education is not happening to any great extent or to any extent of where it should be for the benefit of our next generation. 

Tuesday, August 13, 2013

Your Growing Digital Estate - why we worry

A good article from The Student Lawyer website www.thestudentlawyer.com 
(The choice for aspiring lawyers and us) 

Read the entire article here

Digital Estate Planning-Is Google your Next Estate Planner?

This article picks up on a discussion with Jamie Hopkins who is Assistant Professor of Taxation at New York Life Center for Retirement Income about the challenges facing traditional estate planning in relation to the disposition of digital electronic assets

…”the unique nature of digital assets, coupled with the fact that many digital assets will long outlive their owners, presents new challenges to traditional estate planning techniques…”
While many people do not have an estate plan in place for the disposition of their traditional assets, even fewer have a specifically designed digital estate plan to manage their digital assets upon death. By the end of 2012, almost 30 million Facebook accounts had outlived their owners, but only three million had been memorialised [4] for their deceased owners. This leaves millions of photographs, private messages, and other digital assets stored on the deceased’s Facebook account, which is inaccessible to his or her family and friends.[5] These forgotten pages become a virtual shrine, creating ‘a pixilated Dorian Gray, colored by iPhone photos, ‘pokes’, and ‘LOLs’ — possibly for an eternity.’[6] As such, the unique nature of digital assets, coupled with the fact that many digital assets will long outlive their owners, present new challenges to traditional estate planning techniques, requiring more complex planning techniques than previously used for the disposition and management of traditional estates.
What will happen if you or one of your loved ones sets up all of their accounts online but the access information is not shared? A family already grieving is subject to even further distress. The last thing you or your family need is a time of grief is the frustration and potential financial loss because proper digital estate planning was not considered especially in light of the fact that there are unique issues that plague digital assets like ownership and transferability.

Read on and make a plan
PS LegacyTracker provides for digital estate planning