Practical money matters by Jason Alderman
THE 2015 Financial Literacy Summit (practicalmoneyskills.com/summit2015) held on April 15 in Chicago and co-hosted by Visa and Federal Reserve Bank Of Chicago, focused on how mobile technology might improve millennials’ learning, savings and investing behavior in the future.
A recent FICO study said millennials, the generation born between 1980 and 2000, not only represent the largest group of individuals using mobile banking applications but also the biggest cohort partaking in internet browsing, e-mailing, searching, social networking and news consumption on a smartphone or tablet, bypassing desktop machines entirely.
By comparison, only 5 per cent of 35-54-year-olds and 3 per cent of those 55 years and older are using mobile devices exclusively.
The summit audience heard particularly eye-opening insights from a panel on how early education and mobile technology applications can help build future generations’ financial literacy.
While online gaming (practicalmoneyskills.com/games) is showing particular success in training grade- and high-school-age students in financial fundamentals, panelists suggested that the broader solution will depend on national educational policy and a broader understanding about young adults and their financial needs.
Amando Tetangco, governor of the central bank of the Philippines, told the audience that young Filipino adults are “struggling more than their older counterpart groups with regard to budgeting” and retirement planning, but he said he is still optimistic.
“I believe there are certain characteristics of millennials that provide opportunities to build [their financial capabilities],” he said. “They have a desire for change.”
Such change, he said, should be driven by data and policy should be made personal and tied to technology solutions embraced by younger citizens.
Panelist Jason Young, CEO and co-founder of MindBlown Labs, the Oakland, California, software developer behind the Thrive ’N’ Shine personal finance game app for teens and young adults, said mobile technology will bridge the gap between financial literacy and a lifetime of successful financial decision-making.
“Eighty to 90 per cent of US teens have smart devices,” he said. “That’s huge, but the important thing to understand is that these aren’t just things they use. They’re a way of life.”
Developing a stronger connection between financial-literacy education and mobile technology could be beneficial for global educators and policymakers trying to improve spending, saving and investing knowledge for future generations.
In January, Organization For Economic Cooperation And Development released a first-time global financial literacy study (oecd.org/pisa/keyfindings/pisa-2012-results-volume-vi.htm) that revealed that US students ranked between eighth and twelfth places among all 18 participating countries in overall literacy skills.
Bottom line: Focusing on the way under-35 consumers use smartphones and tablets might provide a way for educators, financial services companies and policymakers to narrow the financial literacy gap.
Jason Alderman directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.