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Helping young people better manage their financial literacy

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Most Canadians are living beyond their means, with a debt-to-income ratio of 181%. More than half are under $ 200 of not being able to cover their bills and loan payments.

Damien Cormier

This kind of statistics worries Damien Cormier, professor at the Faculty of Education, and prompted him to launch a research project to increase financial literacy among young people.

Young adults navigate a more complex financial landscape than previous generations, said Cormier, a licensed psychologist who teaches in the Department of Educational Psychology at the University of Alberta.

“The financial products available to them are complicated, there are fewer defined pensions, the cost of living continues to rise and salaries have stagnated, so it makes sense that this group is better prepared for these challenges without having to learn. by trial and error. . “

The research project, launched a year ago under the auspices of the Center for Applied Measurement and Evaluation at the University of Alberta, primarily helps to establish a robust measure of financial literacy that can then be used to develop school curricula or reference materials for consumer protection agencies. , says Cormier.

While there is a curriculum in some schools, he would like financial literacy to be taught “more consistently across all levels and to be more focused by making clear what we want young people to achieve and how. teachers can provide this content ”.

Okan Bulut
Okan Bulut

Research conducted over the past year by Cormier, his colleague Okan Bulut, and a team of graduate students took a two-pronged approach to raising money awareness and increasing financial literacy. The two components aimed to understand the needs of young people through the prism of psychology.

“Most of the literature on finance seems to come from the fields of business or economics, but psychology has a lot to offer in accessing thoughts and feelings about money and knowledge that are not easily observable.” Cormier said, adding that finances would be one of the trickiest things for people.

Student volunteers aged 18-24 were asked to complete a number of personal finance sentences. From this exercise, the Cormier team understood people’s affinity for money, as well as their approach to financial decision making.

“From there, we were able to define some categories that help individualize approaches to teaching money. “

The second part of the research project aimed to develop a scale to measure an individual’s financial literacy.

“Measuring financial literacy can tell people where they stand in terms of financial literacy. The next step will be to determine where the gaps are.

For example, if someone hasn’t developed a good understanding of the relationship between income and debt, they may not be doing well with money management. One of the important findings in defining next steps is that people who dislike math tend to have lower financial literacy.

“This leads us to not only focus on building their financial literacy, but also on helping them develop good math skills so that they are more likely to avoid costly mistakes and maximize their monetary results. “said Cormier.

He plans to publish research papers on the ongoing project and conduct further research focused on adolescents to help them prepare as they begin to hit financial hardships.

“The key is to start as early as possible because that’s how you can maximize positive results. By the time you turn 18, you could be about to make some of the most important financial decisions of your life, like buying your first car or home.

“One of our goals now is to assess adolescents and group them according to their financial literacy to examine the predictors associated with different literacy levels. “

Cormier would eventually like to reach tweens as well.

“If we can provide them with a structured education through the K-12 education system and they lead it into adulthood, they will have a financial knowledge base to be able to navigate the world more effectively. world. “

The project was funded by a grant from the Killam Research Fund and by the Faculty of Education.

| By Bev Betkowski

This article was submitted by the University of Alberta’s online magazine Folio. The University of Alberta is an editorial content partner of Troy Media.

© Troy Media
Troy Media is an editorial content provider for the media and its own community media hosted across Canada.

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