My closing letter to my students: I Passed Personal Finance, What's Next?

What happens after you pass Personal Finance? Does the knowledge you exhibited in your assessments and on your final examination guarantee you will live a financially sound life? Unfortunately it does not, because the financial choices you choose to make in the coming days, months, and years will be driven as much by your emotions as they will your knowledge.

So you passed Personal Finance, what's next? You have to bridge what you have learned to how you will apply it. To begin to do this you should first internalize that this course was not just another period in the day, but rather a series of tools and concepts that improved who you are and the choices you are capable of making.

Comparatively speaking, our overall test scores are competitive on a national level. Depending on which Personal Finance class you took, you have either passed a college level course or the first comprehensive semester long personal finance course of it's kind. You are capable of applying financial tools and concepts to your own goals that many adults do not even know exist. 

1. You are now the type of person who sets goals and makes wise and informed financial choices to reach your goals.

You understand the rewards and consequences of financial choices. You set financial goals for yourself and make choices to reach your goals. You will be motivated to make financially appropriate choices such as establishing three direct deposits once you get a job; a deposit into a dedicated emergency savings account, a deposit into a dedicated retirement account, and a deposit into your checking account...

2. You are now the type of person who knows how to put a financial plan into action.

People will recognize that you are studious and confident in the financial choices you make. You appear happy and secure to others... 

3. You are now the type of person who people identify as being financially savvy. 

Embracing and internalizing the previously outlined steps as a part of who you are matters, and is relevant to almost every aspect of your life. Let me explain... 

Imagine throwing a pebble deep into the center of a crystal clear pond. The result is ripples that wave one after another throughout the pond, deep from the center, slowly to the periphery.

Whether you want to hear it or not, your choice to both prepare for your final examination and apply what you have learned in this class to your everyday lives is much like the pebble hitting the pond. Your future financial choices will send a wave deep into every aspect of your life and the lives of others.

Your first wave will begin just after high school with your post-education choices and subsequent college debt. While at the same time, you will be testing your discipline with a credit card and future car debt.

Before you know it, you will be a young professional deciding whether to fill your bartenders’ pockets with your discretionary income or fill your own future pockets by adequately investing for retirement.

Sooner than you may imagine, it will shape your family’s quality of life and your subsequent peace of mind.

Eventually, it will guide your opportunity to reach financial freedom at a young enough age to enjoy retirement as others struggle to live on a fixed income, working well into their seventies.

In the periphery, lies the legacy for your future children, and your ability to prepare them for a world full of financial trickery and hidden wealth.

Just as the ripples in the pond get bigger and bigger, so will your financial responsibilities. Being financially responsible is not the result of a high school or college course, nor is it the result of being disciplined and conscience of your choices. It has to be both, and your financial education has to be ongoing.

Now as you have envisioned what you can expect as you move forward, I want you to imagine the waves of choices you will be faced with in a different lens. For a moment, envision shouldering a responsibility much greater than your own financial future. For this moment - - internalize your responsibility as a next generation American.

Our country desperately needs waves of economic change that will transform where we are and the direction we are heading. Our country needs a generation full of financially astute and responsible leadership that will guide us out of consumer and government debt massive enough to change the United States as we know it.

My challenge for you is to understand how to responsibly manage the waves of financial challenges that you will face throughout your life, while making waves for your country that will better the lives of the generations to come.

Let what you have learned in this course be the pebble that creates the first wave of change that we all need.

My Senior Baccalaureate Speech

I love our kids, community, and where I teach. So I was especially honored to deliver this year's Senior Baccalaureate speech. Here is the speech I delivered earlier this Sunday at Church...

Good afternoon class of 2013. It is a great honor to speak to you today.

You have experienced numerous ceremonies celebrating your academic achievements. These achievements have created more paths for you to choose from. You have experienced athletic ceremonies celebrating your “on the field” accomplishments. These achievements recognize lifelong memories nobody can ever take away from you. You have received character awards, celebrating your moral quality. These are traits that should guide you for a lifetime.

Before looking forward, I want to take a moment to look back and celebrate one more achievement.

Early last spring I was suffering from a painful ulcer. At times the pain was excruciating, and one particular day at school the pain was almost too much to bear. You would think that managing a classroom of students in visible agony would be tough, you would think the kids would see an opportunity to do what they wanted. Not our kids - - I lost count on how many times I was asked “Mr. Page, are you okay?” Many of you were in one of my classes that year. Your perfect behavior and genuine care that day were not an illustration of compliance but rather genuine compassion.

This is just one personal anecdote, and each of you can provide your own to best represent what we believe to be an achievement worth celebrating today. This achievement is not a State Report Card indicator nor does it derive from a bubble test. It’s far more important and it comes from within you.

You are a group of loving and compassionate students that will make the world a better place, and that is an achievement worth celebrating.

Your parents and your teachers want what is best for you. We want you to dream, set goals to reach your dreams, and provide you with the support you need to live your dreams.

As you have gotten older, the role your parents and teachers have taken in your lives have evolved. Early in your lives most of your choices were made for you, and as you got older you became empowered to make choices on your own. Whether you knew it or not, your parents and teachers were still there serving as bumpers softening the blow of bad choices, and serve as megaphones echoing to the world your good choices.

In only a matter of days you will embark on your own journey through life. Throughout your journey you will make choices, some trivial, some not. The results of each of the choices you make will now be independently amplified; not just in consequence or reward, but the life-long paths they may open or close for you. So I am honored to have the opportunity today to give you three pieces of advice to help you guide your journey.

First, have Faith…

Throughout your journey you will be faced with tough choices and ethical dilemmas. Nobody is infallible, but you can try to be. In other words, don’t get lost in your journey. Turn to the Lord for your moral compass, particularly when choices are toughest.

Second, prioritize your family…

We are a hypercompetitive result oriented society. You will experience this as a post-secondary student, an employee, or a future business owner. For some it is just as easy to get lost in the competition as it is for others to give up competing all together. I think both can be equally bad if you have a family. Have balance in your life, make choices that make your future families journey joyous and memorable, and put them in a position to make their lives better.

Third, control your personal finances, do not let them control you…

I hate the title of my class – “Personal Finance”. It doesn’t begin to scratch the surface of the impact your personal finances can make on your life. Let’s put your future personal finances into the context of your life’s journey.

1. You need to set a destination and have a financial plan to get there. Throughout your journey you will be faced with a multitude of choices. Know where you want to go, control your personal finances, and stay the course. If your spending choices are different than your goals, pretty soon your personal finances will control your journey and strip much of the joy that comes with it.

2. You need to be safe throughout your journey. Make sure you set up a direct deposit into three places: a dedicated emergency savings account, retirement, and checking as soon as you get a job. Making it automatic to put money aside for emergencies will usually shield you from relying on high interest credit if you get into a jam. Equally as important is investing for retirement right away. Starting early will give you the peace of mind throughout your journey that there will be a point in your life that you are financially free. Finally, make sure you always have insurance products that protect your way of life.

3. You need to enjoy your journey. Reflect on the values and experiences that matter most to you in your life and spend your money consistent with those. If you enjoy traveling, set savings goals to travel regularly. If you enjoy nice clothes, set savings goals and wear nice clothes. Money cannot buy happiness, but it can buy the things and experiences that make us happy.

Class of 2013, you are a special group of adults who in matter of days will be in charge of your own your own dreams, happiness, and journey. So have Faith, prioritize your family, and control your personal finances. Before you know it your personal responsibility will evolve into your own family responsibility. So choose your path wisely and make it a point to enjoy every step on the path in your journey.

5 classroom tips to nudge financial knowledge to behavior

My friend Dan Kadlec pointed out in this recent piece that "A growing body of research suggests that money reminders tweeted, texted, emailed or otherwise delivered through social media fall on receptive eyes." Kadlec also noted "A study led by Barbara O’Neill at the Rutgers Co-operative Extension found that Twitter and Facebook messages to adults raised awareness about money issues even if they didn’t always lead to behavioral change."

AmericaSaves are believers as well. This month they heavily promoted their "Pledge to Save" text messaging service. So let's incorporate these techniques into our pedagogy.

1. Remind101 is a safe way for teachers to text message students and stay in touch with parents, and it's free! For the past couple of weeks I have sent a daily text message encouraging my students to set a savings goals, set up a savings account, and regularly contribute to a savings account (ideally through a direct deposit).

2. Calendar reminders in their phones should be incorporated whenever possible. As an example, all of us should check our credit reports once a year for free at annualcreditreport.com. Have the students set a yearly reminder to do so beginning on their 18th birthdays. Another example is to set reminders for key FASFA tasks on important dates as you introduce the students to the student aid process.

3. Parent checklists with resources for students and parents to explore together at home are a great way to share leading edge resources like the CFPB's Paying For College.

4. Classroom Twitter accounts can be used to send encouraging texts to save, links to valuable resources, and financial tips that are relevant to students now. If you would like a few ideas, here is my classroom Twitter account. We also have our own website and Pinterest page.

5. Student Twitter and other social media accounts can be utilized as resources to connect students with where to turn when they have questions after they graduate. For example, when we were working through the consumer protection unit, I encouraged students to follow the FTC, CFPB, and Ohio Attorney General. This, of course, was after the students utilized the resources on the government websites to deepen their understanding of the content.

President's Advisory Council on Financial Capability Report Released

I have the honor of serving on the Working Committee (Money As You Learn) for the President's Advisory Council on Financial Capability. The project provides optional resources that integrate important personal finance concepts into mathematics and English language arts classes. It is up to the classroom teachers to determine what text(s) from our list is best for their students, and I believe the classroom teacher is clearly the best positioned professional to make that determination.

Here is the first paragraph about Money As You Learn from the report on page 26.

"The President’s Advisory Council on Financial Capability calls for a new initiative – Money as You Learn -- to integrate important aspects personal finance into English language arts and mathematics teaching as well as into other classes and afterschool programs, in order to reach more students throughout their schooling. This approach can strengthen learning of those subjects as well as expose all students to knowledge and skills they need to become financially capable young adults. At the same time, the Council continues to urge states and school districts to also provide high quality personal finance classes for their students."

The particular information pertaining to the integration of personal finance concepts into English language arts and mathematics classes is on pages 13, and 26-31.

Click here to read the report. Click here to visit the President's Advisory Council on Financial Capability Resource Center.

My 30 favorite financial education games

Andrew Miller and I worked together on the recent post for Edutopia "Games to Teach Financial Literacy".

The purpose of the post was to highlight 3 prized of my 30 favorite game and scenario based learning programs. These games were hyperlinked at the conclusion of the Edutopia post.

Click here to explore the different games and simulations.

There are four primary reasons I believe games and simulations are effective learning strategies to integrate into each unit of instruction.

• Makes financial education engaging, fun, and interactive.*
• Links education more directly to action-taking by embedding offers and opportunities for real-world actions in games.* 
• Serves as ideal activities on days prior to holidays or breaks that are often more challenging to engage students in traditional lessons.
• Kids play them on their own time, and on their own free will. 

*Click here for the research that supports my opinion. 

Total compensation calculator

My students have a tough time wrapping their minds around the value of health care, vacation days, employer retirement contributions, etc. All of us know this is an important compensation consideration when comparing job opportunities. I just stumbled across a really good financial calculator I am going to incorporate in one of my lessons on careers and incomes.

Click here to explore the financial calculator.

Utilize Direct Deposits

I was honored to write the post "Utilize Direct Deposits" for America Saves during America Saves Week. Here is the article...

Americans have a tough time saving. Nearly a third of Americans have zero savings, and around half have less than three months of emergency savings. Equally daunting is how little Americans contribute to 401(k)’s. Dr. Hensley of the National Foundation for Financial Education pointed out in this alarming video that only 11 percent of individuals with a 401(k) are putting enough money away to meet their retirement needs.

The goal of this article is to provide the content and behavioral tips necessary to save.

Understand yourself and how to overcome your own savings obstacles
Saving can be exhausting if you allow it to be. As John Tierney points out in Decision Fatigue, we draw from a chemical in our brain to feed our willpower each time we make a choice. The more frequently we surround ourselves with things we really want and choices we have to make, the more we draw from this chemical. Do not make saving another draining choice you have to make, make saving automatic.

The Marshmallow study best illustrated the challenges we innately face to delay gratification, and the latest Marshmallow study is digging into the particular challenges people face who have had previous experiences that punished them for waiting, complicating the problem even further. We have seen how hard it is for people to pass the test. Do not put yourself through the torture of delaying gratification, make saving automatic.

Become a member of a Bank, Credit Union, or Matched-Savings Program
Find a bank or credit union that offers the lowest fees, or better yet prize-linked savings programs. Do not concern yourself with the interest you are going to earn on your savings account. Rates are low and are likely to stay that way for a while. So, your interest won't add up to much if you do not have a lot of money. What can add up are fees - - so comparison-shop for financial institutions that offer the lowest possible fees.

Another option is matched savings programs such as Earn, who also provide additional support services designed to help low-wage families.

Make saving automatic with a Direct Deposit
A Direct Deposit electronically deposits funds directly into a bank account as a form of payment. This past Bankrate article explains how Direct Deposits work, and dives into further advantages. To be clear, only establishing a direct deposit into your checking account isn’t going to help you much. Work with your HR manager and your financial institution to setup a second and a third direct deposit into your savings account and retirement account. This is sometimes referred to as “split deposits”. Make sure there is no additional fee for setting up or using a Direct Deposit service.

In this research Mindy Hernandez of Innovation@cfed provides behavioral insight on the decision making process“…often the decision we make is not about the ‘optimal choice’ but the one that requires the least amount of effort – the one on the path of least resistance. Defaults are the option you get if you do nothing at all, and they are extremely ‘sticky,’ meaning you are not likely to change the decision (or lack thereof) once it is done…” In other words, by saving first with a direct deposit it would be harder not to save.

The positive results of setting a savings goal and reaching it by making saving automatic is confirmed with research over and over again. According to research reported here by the Electronic Payments Association, 93 percent of employed adults who use split deposit contribute to their savings every month. Conversely, of employed adults who do not use split deposit, 23 percent contribute nothing to their savings.

Make investing automatic with a Direct Deposit
This quality resource on the Department of Labor website empowers employees with useful information about retirement plans, and the power of compound interest. Here is the example the DOL used to illustrate the importance of beginning to invest for retirement at a young age:

“A 20 year old who saves $1,000 a year for 11 years in a row, then stops but leaves it there to earn 7% interest, will have $168,514 at age 65.

However, a 30 year old who starts saving $1,000 a year for 35 years, also earning 7% will have only $147,913 at age 65. Even though the 30 year old has put in more money for more years, it has less time to earn that compound interest.”

In other words, fully match your employer’s 401(k) or 403(b) contribution and do so electronically with a split deposit as soon as you get a job. Make sure there is no additional fee for setting up or using a Direct Deposit service.

America Saves Week is February 25-March 2nd. Now is a great time to pledge or repledge to save. By pledging to save you will commit to a simple savings plan and goal. Research tells us that regardless of income you are more likely to spend less than you earn, save for emergencies, and save for retirement if you have a savings plan.

Set a savings goal, take the pledge, and remember that Direct Deposits matter.