Monday, December 2, 2013

Linking Financial Education to Math

I had the opportunity to research financial education over the holiday weekend. It was not the type of researching that academics engage in, where they update interested readers on current trends or findings, but more of a personal evaluative search on social websites. One thing is certain, the topic has gained momentum and there is now more information available to the public than past years. As usual, it is free on most sites and although it is relevant to the general population, much of the resources available have been catered to specific groups, especially women and children. But here's the shift that has been made: many of the sites I stumbled upon now equate financial education to math. 

The strategy could be either positive or not. It all depends on the final goal of these groups or individuals who are making the link. Are they trying to reassure visitors by simplifying financial education as a subtopic of the field of mathematics or do they sincerely believe that basic math skills are all that is required to master it?

Here's the problem. Simplifying financial education by linking it to math assumes that calculating a few problems makes one a whiz of finance. What happens to those who may decide they're not good enough at math? It could potentially turn them off from trying to manage their own money. What is financial education than learning how to effectively manage one's money and make sound financial decisions? This requires more than just fuguring out a few calculations. Other fields, such as economics come into play, where we are taught to gather information and learn to base quality decisions on that material. Then there is the critical need to learn how to enter into contracts when investing and how to choose the right investments and select qualified bankers. Labeling financial education as math undermines the work that goes into managing money. Many consumers would find themselves in better financial situations if managing their paychecks was as simple as a few calculations. 

The flipside though is that the comparison can encourage otherwise weary consumers to be more proactive with their money. Mention finance to most folks and chances are they will cringe at the thought of having to comprehend all the jargon and advanced calculations, although there are now special tools available on most related websites that shift through this mess.  

I'm not sure right now which direction this new label will take. As those who have adopted mathematics as the new descriptor, the goal naturally is it will take a positive turn. Then again, that will eventually depend on how one perceives mathematics. Like finance, it usually invokes negative thoughts in many people. Only time will tell. 

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