The Challenge of Financial Education

It shouldn’t really surprise anyone but it’s true that discussing of financial matters is the most taboo subjects in our culture. Families are more comfortable talking about sex than money with their kids. This lack of transparency had a big part to play in the financial crisis. But beyond it’s taboo nature, financial education is also quite fragmented. There are few places that the average person can go to gain a better understanding of how money works. Khan Academy.org has some information and there’s a few tools around but, for the most part, truly accessible financial information online goes from diluted and inaccurate to expert level gobbledygook and there’s little in between. Adding to the mix of information are the numerous “financial advice experts” that have flooded the Internet since 2008. Many of these people, and their blogs, have good things to say but the information is more often contradictory and don’t cover the basics of what money means for us day to day. 

I’d love it if there were some easy to use tools that came from trusted sources. But what makes a trusted sources these days is tough. For the average American no bank can be trusted and the institutions and publications who have branded themselves around those banks are now, for many people, seen as merely part of the system that caused them harm. 

One example are online trading tools such as Think or Swim who’s interface lacks simplicity and tries disparately to provide a replica of a real-world trading system for traders. Or Fidelity who’s system fails to answer basic questions like “how much money have I put in and how much is that money worth today.” I’ve used both of these tools extensively and even though I thought I had a solid understanding of how investing worked, they quickly proved me wrong. This reduced my trust in their brand.

This lack of accessible trading tools pose a real challenge not only to the average person but to the brands that have created them. If we are truly going to improve our economy and get ourselves out of recession then we’re going to need to do it together. That togetherness is only possible with proper education and access to the tools to feed our recovery. We need to have a population that knows what their financial decisions mean in the long run. The financial brands that create these educational experiences, designed for use by regular people, are the ones that will be rewarded. The best example I know is Bank Simple (here is a video showing the ease of how their product will work). But we now need investment applications that are as focused on the average investor as Bank Simple is for the average bank customer. I believe the brands that address these concerns will be rewarded for their focus on people versus profit.

I’d like to see a set of financial tools that provide the following:

1.

Educate consumers in real-world terms and help them to translate these terms back into financial language

2.

Create transparent understanding of how their money works that applies those real-world terms to their real-world bank accounts

3.

Provide tools for investment that simplify the experience of trading mutual funds and stocks

If we can get everyone educated on how money works; where it comes from where it goes and how people can end up with more of it, then the global economy will truly benefit. The anger that continues to rage among American consumers is exacerbated by the lack of easy education and humanless user experience created by all the major financial sites. By creating better experiences financial sites can create better experiences, smarter  consumers and greater returns on their own investments.

The Internet has democratized numerous things in our lives, the financial crisis has shown that it’s time that financial education stop being taboo and start getting democratized.