Week 3
So after a lot of research on the gender equality topic, I still wasn't feeling the passion and drive necessary for this project. So I started to just research education in general and I found I'm really interested in how financial literacy and money management skills are not taught in depth at school and how parents have a huge role in their children's financial literacy.
The transition period from financially depending on parents to becoming independent is an important part of being a young adult so I am really interested in exploring how design could facilitate this subject.
I had a light bulb moment and finally felt certain about something. I can see myself exploring this topic for a whole year and I'm ready to commit to it. It still needs narrowing down but this is a great start and a wave of relief has come over me.
Karl suggested I make two ‘piles’ of research. One pile of all you can find about how design can educate. Don't worry about *what* its teaching, just build a rich typology of all you can find. Make the second pile all you can find about financial literacy, and its opposite (how are loans companies persuading people to make ‘bad’ choices, for example?). Then see if you can find a theory to help you navigate it all. Persuasion theory (ethos, pathos, logos) might be a start.
At the moment this is my statement.
How can communication design facilitate financial literacy and money management skills. Ill explore this through the financial education system in high schools and the role of parents in their children’s financial literacy.
Financial Research:
Financial Research:
In a culture that demands individual responsibility and selfsufficiency, financial literacy is an essential component of a successful adult life. There is little doubt that learning how to manage personal finances, and especially how to use the credit system, plays a central role in shaping not only attitudes about financial management practices but also attitudes about life in general. Likewise, the behaviors associated with money management carry over into other realms. It is therefore crucial that young adults begin to learn about finance during adolescence in order to have the best possible chance for a successful transition to adulthood. 13
Our research findings suggest that, in order to help adolescents and young adults achieve this success, parents, schools and entrepreneurs should form partnerships dedicated to teaching sound financial practices. Based on our findings regarding the key role that parents play, we also believe that parents should be informed about the lessons that their own financial behaviors impart and also about the importance of direct teaching. If parents had a better understanding of how financial literacy can contribute to their children’s success later in life, they might be more inclined to demonstrate positive financial behaviors and provide or encourage financial education at home. In contrast to other life-skills, financial management is generally embedded in every facet of life and is clearly necessary to planning for the future, including for one’s college education. We should also find ways to help more parents understand how to involve their children in the family’s financial decision making and thereby teach them how to make good decisions on their own. When parents help their children to make personal financial decisions in an open and communicative environment, then a positive relationship can be built (Shulman et al. 2005). Then, too, financial topics could serve both a utilitarian purpose (e.g., learning about a task that is developmentally relevant) and an interpersonal purpose (e.g., an opportunity for parents to develop positive relationships with their children). We also think that high school financial literacy programs must teach not only the terms and techniques of financial management but also ways to enhance self-efficacy and methods for the wise and even virtuous use of financial resources. Financial education courses should include instruction in career planning and should make clear to students that the attitudes and practices they learn about in the classroom carry over into other aspects of life and can thus help in planning one’s education and in managing one’s interpersonal relationships. These courses might also include lessons that demonstrate how financial decisions and their outcomes permeate other aspects of life and determine the success or failure of interpersonal relationships, education plans, and careers.13
Financial_Socialization_of_First-Year_College_Stud.pdf
Young adults are in an important transition period from financially depending on their parents to becoming financially independent. The purpose of this study was to identify factors associated with perceived financial independence among American young adults aged 18-23. Taking an interdisciplinary perspective, we hypothesized that major contributing factors of young adults’ financial independence would include economic, psychological and family factors. 4
The financial independence of young adults is important for themselves, their parents, and society. Young adults consider financial independence to be one of the top criteria for entering adulthood (Arnett, 2000). No parents would like their children to rely on them for life. Financially independent young adults are necessary for the healthy development of a society. Recently the process of transition to adulthood has become lengthened and more complicated for young adults. Key milestones such as residential independence, completion of education, entering the workforce, marriage and having children have become more protracted and diverse (Furstenberg, Rumbaut and Settersten, 2005). With a longer period of transition to adulthood, many young adults rely on their parents and immediate families for financial assistance over an extended period of time. Researchers estimate that parents provide, on average, $38,000 in material assistance such as housing, food, educational, or direct cash assistance during the transition period (Schoeni and Ross, 2005). Families spend approximately 10% of their annual income to support their young adult children of ages 18 to 21 (Settersten and Ray, 2010). During this prolonged and complex process, some young adults become more vulnerable as they do not receive the needed support from parents or other family members (Furstenberg et al., 2005).5
One of the major reasons for young adults taking a longer time to become financially independent is the higher demand for training and education required by society. In the U.S., about half of young adults between the ages of 18 and 21 years attend college and only a quarter of adults age 24-35 become college graduates. The rest of the young adults either drop out of college or never attend college (Settersten and Ray, 2010). The association between educational attainment and transition to adulthood found in extant literature (Lee and Mortimer, 2009) suggests that educational attainment of young adults may also affect their financial independence.5
The process of financial independence has become more complex in many developed countries. A recent study of British and Canadian youth found that the transition to adulthood and financial independence took longer under current socioeconomic conditions, which resulted in lower social status for the transitioning adults (Cote and Bynner, 2008). The study authors found that youth from disadvantaged and excluded groups in both countries were more vulnerable to this changing economic environment.6
As a result of this changing environment, it has therefore become more important for young adults to not only earn but also manage their finances carefully while they secure their socioeconomic stability as financially independent adults. Financial literacy is important in order to accomplish the goals that lead to the path of financial independence and for the financial wellbeing of young people as they transition toward adulthood.”6
Factors that affect financial independence
· Saving behaviours
· Living at home
· Personal income
· Parenting style
Parents play an important role in children’s financial socialization (Kim, LaTaillade and Kim, 2011). Young adults’ financial independence has been associated with the economic status of their parents. The parental income decreased the likelihood of independence for women but did not show any effects for men (Whittington and Peters, 1996). Cross-national comparisons indicated that family financial support, the provision of housing, and caring labor were clearly important to the economic well-being of young adults (Smeeding and Phillips, 2002). Young adults who were raised in homes with more wealth at one point in their early childhood were more likely to have positive outcomes, such as graduating from high school, enrolling in college, and establishing their own independent checking and savings accounts (Destin, 2009), all of which are necessary conditions for financial independence.10
Parental economic behaviors may be followed by children. A young family's likelihood of owning transaction accounts and stocks has been found to be affected by whether the parents hold these financial assets (Chiteji and Stafford, 1999). Data from Canada has shown that young adults who reported that their parents and friends were heavy credit users were more likely to have positive attitudes towards credit (Lachance, 2012).10
Lee and Mortimer (2009) view this topic from a socio-psychological perspective. They believe that two major factors determining young adults’ financial independence are economic self-efficacy and the family communication process. Economic self-efficacy is derived from a major psychological concept of self-efficacy (Bandura, 1977). Lee and Mortimer (2009) argue that economic self-efficacy appears to be critical in fostering achievement-relevant behaviors. For example, youth who think they will be successful in achieving their goals in the economic realm are likely to be more persistent in their preparation and striving for post-secondary education. They also assert that family socialization, particularly communication about work and money, is an important factor in the development of economic self-efficacy, which leads to a greater likelihood of being financially independent during young adulthood.14
Children may follow their parents to perform similar financial behaviors. They may also learn financial knowledge and skills when actively communicating with their parents. During these family communication processes, they increase the level of economic self-efficacy that contributes to their financial independence.14
The results will help young adults understand their own status in terms of financial transition and work hard to move in the right direction to achieve their financial independence fully by studying harder, looking for jobs more actively, and communicating with parents more effectively. Our findings suggest that economic factors are more important to financial independence than other factors.23
Our findings also show that young adults’ economic self-efficacy, money management ability, and problem-solving ability are important to financial independence. Consumer educators should consider these factors and design, develop, and implement effective consumer education programs to help these young adults enhance skills in these areas besides teaching them the contents of personal finance.23
Transformative learning theory focuses on how people change through the educational process (Mezirow, 1991; Mezirow and Associates, 2000; Taylor, 1997, 2007). Rooted in constructivism, it reflects a view of learning where the learner is seen as an active participant, creating and interpreting knowledge in relationship to their rich life experience that plays a significant role in understanding the meaning-making process, e.g. of FLE. According to Mezirow and Associates (2000), this involves learning ‘how to negotiate and act upon our own purposes, values, feelings and meanings rather than those we have uncritically assimilated from others’ (p. 8). Often, we uncritically assimilate beliefs and attitudes from others. Transformative learning theory can be used to explain how people ascertain what their beliefs are and, through critical reflection on their underlying assumptions, can lead to a change in their perspective. This is where FLE can benefit from this theory: in its attention to developing more reliable teaching beliefs, exploring and validating their fidelity and making informed decisions that are fundamental to adult learning processes.532
Research or programmes grounded in transformative learning theory would examine how FE actively engages learners in relation to their own lives as individuals, rather than as passive recipients of knowledge. Hence, such a framework makes visible what educators’ beliefs, values and assumptions are in developing curriculum and pedagogical strategies for working with adults.532
Teaching financial literacy: a survey of community-based educators Edward W. Taylor, Elizabeth J. Tisdell and Karin Sprow Forté
Students’ financial education also plays a role in predicting debt. College students know little more about finances than high school students do, but have much more freedom to make their own choices about money.56
further, a lack of financial knowledge was related to increased levels of debt.56
This suggests that parents who engage in a hands-on approach to teaching children to handle money through such actions as teaching them how to manage an allowance and how to manage bank accounts have children who report lower levels of credit card debt in college. This is consistent with prior work on consumer socialization in younger kids that found that parental behaviors such as co-shopping and evaluating alternatives strongly influence children’s perceptions of purchases.61
The role of parents in college students’ financial behaviors and attitudes Jill M. Norvilitis *, Michael G. MacLean
Money loaners
Loans are so easy to get.
Google the words: "I want a loan" and you'll be offered the Earth. Up pop the words: "Quick cash", "money in your account within 60 minutes", "simplify your debt", "same day loans", "design your own loan", "Satisfy any shopping urge", "take your family on a much-deserved trip".
It sounds so friendly.
But there is money to be made lending cash to Kiwis to fulfil their every whim — and the sharks are circling. They are a business looking to make money from you not help you.
Loans don't always "make life easier". They can spiral out of control. Borrowers get black marks on their credit records and can end up bankrupt and even suicidal in some instances.
Can lead to:
- Never ending payments
- Multiplying debt
- Taking out more than you can afford to pay back
- Scammers
- May become a habit
- can damage your credit rating
High Interest Rate Debt Causes You to Pay More Than the Item Cost
Borrows From Your Future Income
Anytime you take out a loan or charge something on your credit card; you’re borrowing from the money you hope to earn in the future. Do you want to spend your money paying for something you've already used up and don't get much value from anymore?
Encourages You to Spend More Than You Can Afford
moola, harmoney, instant finance, save my bacon all encouraging people to take out loans.
Data obtained by the Herald on Sunday shows more than $6.5 million has been spent on advertising by the loan companies, according to the Nielsen reported rate card.
The advertising rates card show the biggest spender is GE Money, which offers loans at rates up to 24.99 per cent a year. The company spent $2.824 million over the past year on television, newspaper, billboard and online advertising.
Second was Instant Finance, which lends at 29.95 per cent a year and spent $2.021 million, and third was Save My Bacon, which charges 547.5 per cent a year and spent $473,000 on radio advertising. A loan from Save My Bacon for $300 over four weeks would cost an extra $76.70 in interest and $43 in fees
Payday lenders like Save My Bacon and Payday Advance market their loans as short-term stop-gaps for workers experiencing a cash crunch, but their interest can work out at well over 500 per cent a year.
To get the loans, borrowers have to sign wage deduction authorities, and in some cases lenders claim they are "irrevocable", or that borrowers certify not to dispute the deductions.
Hundreds of cash-strapped Kiwis are struggling to repay "payday" loans, with some facing bills up to six times the amount of the original loan, says the Federation of Family Budgeting Services.
http://www.stuff.co.nz/waikato-times/news/6523093/Payday-loans-cost-Kiwis-big-premium
Powerpoint slides for class:
design helping education Precedents:
financial design precedents:
Powerpoint slides for class:
design helping education Precedents:
financial design precedents:
Comments
Post a Comment