Partners &
Get Involved Contribute

Archive for October, 2012

White Paper: Teaching Fiscal Awareness to Younger Generations and its Global Impact on Education, Health and Well-Being of People and Countries

Sunday, October 7th, 2012

I.               The Problem

The United States has a terrible savings problem, which results in unsustainable debt.  This problem is not confined to the U.S. – other countries around the world are also in fiscal crisis due to excessive spending.

Although media focus is on government spending, the average family in the United States also has a savings problem.  Many families tend to focus on spending and not saving.  This hinders a family’s ability to pay for expenses related to health, education and basic well being over the course of a lifetime.  Unfortunately, the savings rate among American families is close to an all-time low.

Since children traditionally learn fiscal literacy from their parents, many today do not have adequate knowledge or training to understand fiscal responsibility, and how it impacts their lives in the short and long-term.   The lack of proper education can exacerbate the generational cycle of fiscal irresponsibility and debt accumulation, which can negatively impact their lives over the course of time.

II.              Proof the Problem Exists

In the 1970s and 1980s the average savings per family was in the 5 – 7% range. In the decades since, personal savings has declined to the 1 – 3% range. In early 2009, savings in aggregate as a percentage of GDP went negative for the first time since 1952, and has continued its downward trend. (CNN Money)  In addition, the United States today has a deficit of close to $15 trillion.

In 2008, college seniors with at least one credit card graduated with an average of $4,138 in card debt, up 44% from 2004. By comparison, freshmen’s average credit card debt jumped 27% to $2,038. (USA Today)  It is likely that these numbers are even higher in 2011-2012.

Other countries, such as Greece, Spain, Argentina, Italy, France, Portugal, Germany, Ireland and the United Kingdom, are also experiencing severe financial problems.  This issue is not limited to the governments of these nations, but also affects the populace.  The two are interlinked.  For a summary of the fiscal problems and austerity measures taken by these countries, see

These factors have a significant impact on the ability of individuals and families to take care of their education, health and basic well-being.

III.            Additional Problems

Statistically, fewer and fewer parents are directly discussing important financial issues with their children.  In one report, only 43 percent of parents had spoken with their children about fiscal awareness. (Capital One) This figure is 20 percentage points lower than that of the year before.

If this trend continued, the percentage of parents who teach their children important fiscal issues would be even lower today.  As a result, many children are likely to grow up without adequate knowledge regarding fiscal responsibility.  By the time they gain this knowledge, many will have already made some of the most of the important fiscal decisions in their lives (and probably gotten many of them wrong).

Of course, even if parents make a sincere effort to teach children fiscal responsibility, what percentage of children will actually listen to their parents, and put what they learn into practice?

This makes having access to other avenues of learning crucial to imparting fiscal knowledge.  However, as of 2009, only three states require children to pass a high school course in finance before graduation – Utah, Missouri and Tennessee. Seventeen more require finance to be worked into a portion of the curriculum at some point during a child’s twelve-year scholastic career.  That’s about it.

On a global perspective, there are many socially conscious, entrepreneurial organizations working around the world to help communities rise out of the cycle of extreme poverty.  Slowly, these efforts are working.  There is an increase in the flow of money going into these communities.  Unfortunately, due to lack of sufficient education and discipline, this additional money sometimes does not reach the families that could most use it to help pay for their basic needs.  Educating women, children and families, and empowering them with financial decision-making, should be a primary thrust in changing the politics and culture of aid.

IV.            Basic Solution

Our basic solution is to create a fun, engaging program (whether online, in a classroom or a combination of both) that makes it easy for children to learn the basics of fiscal responsibility, and provides them with incentives to learn it.  This program should be creative and promote collaboration, as well as involve critical thinking and problem solving.

The results of the program can be shared with others in the U.S. and worldwide through online resources and social media.  By sharing knowledge of the program and its results, others can create similar learning programs to teach fiscal awareness.  This will help improve people’s lives.

V.              Solution

Questions exist as to the effectiveness of teaching fiscal awareness at home or in school.  There is extensive evidence, however, that a fun, engaging, game-based learning program that includes incentives can enhance a child’s ability to learn.

Our solution is to create a private program that combines these techniques. With already-defined parameters and guidance from experienced professionals in various industries, we will create a program where children can literally help teach themselves the importance of fiscal responsibility through a game-based learning system.

The first step will be to define the incentives, which can be scholarships or other prizes that are attractive to children and their parents/care givers.  After establishing these incentives, we will work with financial professionals, as well as professionals in other industries, to produce a series of videos that will convey the basic knowledge children will need to participate in the contest.  We can also use videos that already exist, as long as they convey the proper message.

After viewing the videos and learning from in-person, group instruction, the children will participate in a web-based game.  This participation can be individual or in groups.  The game will provide them with certain parameters, i.e. income and expenses, and they will make budgeting and spending decisions based on what they have learned.  These games can also be based upon the basic principles of entrepreneurship and running a simple business.  There will be surprises along the way that will test how well they have planned and provide true-to-life examples of the surprises that can spell financial success or distress.  They will also learn how their decisions can impact the lives of others.

Finalists will be chosen based on a built-in scoring system.  The grand-prize winner will be chosen based on his or her game score plus an evaluation of his or her plan for teaching what he or she learned to others.  A panel of judges will review the latter and make a decision.  The winner (s) will then work with program organizers to help teach their knowledge to others.

The program organizers will also develop video and online content from this program, and share it with others in the U.S. and around the world. The ultimate goal is to create national and global collaborative contests, expand the reach of the program, and pursue the greatest possible impact so others can learn the importance of fiscal awareness and how it not only impacts them personally, but others around them as well.

VI.            “See One, Do One, Teach One”

There’s a saying in the medical profession, “see one, do one, teach one.” In other words, you see someone do a surgery and over time you then do a surgery under the guidance of an experienced doctor, and then eventually you’re ready to teach someone else how to do a surgery.

This saying can apply to almost any industry and endeavor.  The best results come from seeing it done once, doing it yourself once and finally teaching someone else how to do it.  Basically, one of the greatest ways to learn is to see it, do it, and then teach it.

Studies have shown that peer-to-peer learning is an excellent method of sharing knowledge and experiences with others.  It allows children to formulate their own questions, discuss issues, explain their viewpoints, and engage in cooperative learning by working in teams on problems and projects.

Through peer-to-peer learning, children can:

  • Spread information through formal or informal social networks;
  • Involve two-way (or more) communication;
  • Recognize that every participant can be a teacher and a learner;
  • Participate in community- and individual-driven efforts; and
  • Engage in ongoing forums or one-time exchanges.

The cornerstone of our program is the “see one, do one, teach one” idea – children taking what they have seen, done and learned, and developing a plan to teach it to their peers.  Their plan for giving back to their peers is a key part of the scoring criteria for this program.

The idea of ‘giving back’ and teaching others is a mission of Friends Unite, which is to develop collaborative networks to share important knowledge with others.  The greatest impact often results from people ultimately helping themselves.  Peer-to-peer learning is the type of bottom-up approach that will have a lasting impact in advancing fiscal awareness for younger generations.

VII.           Summary

The following is a bullet-point summary of Friends Unite’s Fiscal Awareness program:

  1. Define the incentives or prizes to be awarded at the end of the competition;
  2. Work with financial professionals to create fun, engaging, instructional videos to convey the basic knowledge children will need to participate;
  3. Identify a group of children (whether through schools, family, friends or local organizations) who want to participate in the contest;
  4. These children, whether individually or in groups, will participate in a web-based game that has a scoring system;
  5. The winner will be the person or group that scores the most points and best conveys to an independent panel of judges how he/she/they will best give back to society and impart this knowledge to others;
  6. The winner (s) will get a scholarship or whatever prizes are defined at the outset of the program;
  7. With the assistance of program organizers, the winner (s) will follow through with their plan to teach what they have learned to others; and
  8. Program organizers will create content from this program to share with others in the U.S. and around the world, create national/global collaborative contests, and expand the reach of the program to help others learn the importance of fiscal awareness.

We welcome all suggestions, constructive criticisms, and ideas on this program.  Feel free to send your comments to