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Coaching Vs. Teaching Basic Financial Concepts

Interpretation of recent studies that find financial acumen lacking among Americans in virtually every demography varies greatly. The need to enhance financial literacy is great. The approach is where we split hairs.

I am attaching to this post articles that vary greatly on the solution.

In her US News article, Kimberly Palmer suggests a forced approach. I.E., government policies that force our hands at saving. One could then argue that such an approach would increase financial illiteracy because forcing people into retirement plans doesn’t reach the root of the problem. Palmer clearly seeks a top down approach that provides a fix but not necessarily a solution.

Jonathan DeYoe takes a bottom up approach, putting responsibility on individuals–changing the world one diaper at a time, so to speak. In his NerdWallet post, DeYoe sites the readily available information from multiple organizations via multiple platforms. DeYoe suggests the solution is coaching instead of teaching. Like any subject, financial concepts can be taught but putting them into practice, making them relevant, is key to making them stick. “Give a man a fish and he’ll have a meal. Teach him to fish, and he’ll have food for life.”

For the above reason, studies sited in earlier posts on this site suggest early intervention. By reaching children at a young age, we invariably reach their parents. Also, applying accountability (read: responsibility), addresses behaviors.

All educators know there is no single solution that will effectively target all learning styles. It takes a savvy coach to adapt the lesson to the student.

Links to cited articles:

http://money.usnews.com/money/personal-finance/articles/2014/08/26/why-financial-education-might-not-work

http://www.nerdwallet.com/blog/finance/advisorvoices/overcoming-hurdles-financial-literacy/

http://cunfl.com/2014/08/28/cambridge-study-effective-fin-lit-begins-by-age-7/

http://cunfl.com/2014/08/25/three-reasons-for-introducing-young-children-to-financial-literacy/