Financial literacy may be one of the last things on an American teenager’s mind. Would anyone be surprised to hear that, compared to the financial prowess of teenagers in 17 other countries, the U.S. ranks ninth, right in the middle of the pack? That is according to a new study released this past summer from the Organization for Economic Cooperation and Development that assessed teens’ understanding of bank accounts, credit cards, taxes, savings and contracts, among other topics. The study reported that about 18.9% of American 15 year olds do not reach a baseline level of financial literacy, meaning they do not understand much about finance beyond discerning between “needs” and “wants.”
In the current economic climate, individuals, as well as corporations, need to be more financially aware in order to be responsible, ethical, and secure. But, today’s constantly connected teens are a particularly challenging audience to engage. And, while they may not have a lot of spending power yet, they are in a critical phase of their lives – straddling the line between dependence and independence and about to embark on many financial “firsts” – college, career, paychecks, taxes, rent, and bills.
This is precisely the right time for brands to engage teens with financial content that relates to their aspirations for the lives they want to live, and dreams and goals they want to achieve. But, most importantly, it has to be in a language that they will understand. The key is to provide information that empowers teens, that does not talk down to them and helps instill the confidence they need in order to handle the next phase of their lives successfully.
Teens live in the now. While their brains and bodies are still developing, they depend on personal experiences and context. They also look to their peers for information and are in a constant state of information overload. According to Lisa Mulka, education writer at Juniper Shore Publications, “Presenting content in a way that inspires them to think about their goals and what steps are needed to reach those goals is key in helping teens see the value in thinking long term.”
Pockets Change is a financial literacy program that serves foster care youth and youth based nonprofits. “Our program has been successful largely because it’s focused on empowering kids and teens to take control of their financial futures through the development of critical thinking, decision making, optimism, persistence and other life skills. By meeting each child or teen as an individual and supporting them with engaging activities that allow them to explore, play, and investigate the topic of money, we’ve found youth not only take ownership of their learning, but become advocates for their own futures,” say Andrea Ferrero, who co-founded the organization with Pamela Capalad, CFP.
Susan Baudoin, a national board-certified teacher at Parkdale High Schoo,l teaches financial literacy to teens and believes that they respond best to what is immediate and relevant in their lives. According to Baudoin, “By relating financial topics to events that are current in a teen’s life, we approach the teachable moment and have the best opportunity to reach teenagers with this vital information. Planning a budget for attending their prom, purchasing a car and financing higher education are a few of the topics that get their attention.“
Here are a few ways for brands to engage teens:
1.Team up with educators who can teach you how to challenge and empower teens in a language they understand and in a way they will value and appreciate for the rest of their lives.
2.Tap the growing popularity of “edutainment”, offers Mulka. Apps, games, and other online-based resources that subtly advocate the processes of asset allocation and decision-making are excellent vehicles to deliver financial literacy.
3.Make it relevant and personal, says Ferrero: Teenagers are dealing with their first jobs, most likely opening their first bank accounts, and applying for college; financial literacy topics are a wonderful way to extend on math, English language arts, and social studies in a real world applicable way. They are able to see clear benefits such as learning how to talk about their strengths as they begin job and college interviews or creating a spending and savings plan that supports them in reaching their dreams.
Know of a great financial literacy program geared toward teens? If so, please share it with us in the comments below.