Back To School: Debunking the Myth That Financial Education Does Not Work

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A paper published back in 2014 caused quite a fuss. It analyzed the data from 201 financial education programs across the world to see what impact they had on financial behaviors.

It found that financial literacy programs influence only 0.1% of future financial choices, with even weaker effects in low-income families. It also concluded that financial education eroded quickly, with the most exhaustive programs having hardly any benefits after 20 months (1).

“Financial education as studied to date has serious limitations” Fernandes, Lynch & Netemeyer (1)

What failed to make the headlines was the author’s plea to take a better look at “just in time” financial education — where interventions occur when financial choices take place so that individuals retrieve knowledge from specific behaviors.


Getting your kids interested in personal finance requires an approach driven by relevance, not theory. Sure, you can introduce them to concepts like compound interest and good VS bad debt. But if they have no money to manage on their own or, worse, their perceptions are influenced by the behaviors around them; then, you may be driving into a brick wall (2).


Financial education as it currently stands is subject to knowledge fade. This affects rational decision-making while “just in time” reminders can exploit those “teachable moments” when individuals are highly receptive to influence (3).

“Just in time reminders may be best delivered by technological means” Karina Harley (3)

The idea is not surprising. It is a general principle of learning. If you learn things, and you do not use them, that knowledge fades over time. You cannot set up your children for a lifetime of financial health by telling them everything they need to know and by cramming in all those good financial habits (4).


The average US household leaves on the table between $2,000 and $3,500 in economic benefits per year because they don’t have the right tools and knowledge to spend, borrow, grow, transfer, and safeguard their money in an efficient manner (5).

Add a 6% compound interest over 45 years, and the amount left behind becomes life-changing.

With “just in time” technology nudges, there is an opportunity to break those psychological and educational barriers for optimal economic decision-making.


As school starts and most educational systems have either cut back or given up on financial education, what can you do?

If you’re a parent, you should start a discussion about money with your children much sooner than you think. Research shows that financial habits, like self-monitoring, can be set as early as seven years old.

If you don’t know where to start, check out the WALO app. It turns pocket money into hands-on life lessons and is a sure way to help your kids sail to financial health through “just in time” financial education.

It is fun, 100% free, and it might set your child on the road to financial independence.


1. Financial Literacy, Financial Education and Downstream Financial Behaviors

2. Should we give up on financial literacy?

3. The effects of ‘just in time’ financial education programs on financial literacy and economic decision-making in superannuation,5

4. John Lynch (Morningstar): Rethinking Financial Education

5. Breaking New Ground in Fintech: A Primer on Revenue Models that Create Value and Build Trust expertise/insights/2018/oct/breaking-new-ground-in-fintech.html

Originally published at on August 21, 2020.

Co-founder & CEO @ // Twitter: @RCharkani

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