Accounting for success: Financial literacy for 21st century students

Duncan McCullough

If money is the name of the game, then financial literacy is how a player learns the rules. Education success for modernizing markets relies on an increasingly diverse set of skills, yet financial capacity may be one of the most foundational areas of growth for students, their families, and school officials around the world.

Innovators recognize how critical financial literacy has become, and are leveraging a variety of strategies to help their beneficiaries account for success. What might we learn from their experiences?

It’s never too early

The Junior Achievement (JA) organization has national chapters around the world, and emphasizes experiential learning to prepare girls and boys for professional success. While most of JA’s activities focus on engaging secondary-school age children with the world of private enterprise, many initiatives in the JA network are starting even earlier. One such initiative from Junior Achievement Nigeria, teaches students in grades 4-6 about earning, spending, sharing, and saving money. The program is called More than Money, and is implemented after school with the help of a mobile application (pictured right).

The More than Money app is a game, similar to Monopoly, that helps children learn basic financial knowledge. Game-based learning activities, combined with direct instruction, help children learn about foundational concepts. Girls and boys can use the app to learn how interest works, how to differentiate between needs as opposed to wants, or how to track deposits against withdrawals. Such learning activities lay the groundwork for financial and entrepreneurial achievement, and shows that just as in other competencies, starting early may be key.

Practice Makes Perfect

When preparing adolescents for careers, innovators are demonstrating cost-effective impact by giving youth first-hand experiences. The CELEBS Village Centre (CVC) program, based in informal settlements within Nairobi, offers youth from local communities the opportunity to enrich their lives through various entrepreneurial programs.

CVC offers loans, provides business incubation lessons, and provides a corporate workplace setting for young entrepreneurs to launch enterprises as new career options. The young girls and boys, or “CELEBS”, are trained on how to develop their business ideas and plans, run their enterprises, and contribute to a group savings scheme.

Young entrepreneurs learn through instruction, but just as importantly are connected to a mentorship and peer support network. Mentors include local businesspeople and community leaders, offering students first-hand knowledge as well as access to valuable networks they’ll need to succeed.

Helping beneficiaries help themselves (and your program's sustainability)

Perhaps most excitingly, developing financial capacity among beneficiaries is helping innovators make their programs more sustainable.

Next Generations Schools, for example, is a non-governmental organization that supports government-funded secondary schools in rural Uganda. The program works to improve management, educational and operational systems in schools, and does so through capacity-building workshops customized for school administrators, community members, and teachers.

NGS combines their financial trainings with activities to mobilize additional resources on behalf of schools (fundraising drives, textbook donation, public-private collaboration, etc). By targeting their intervention to the improvement of resource management, Next Generation Schools gives school leaders the tools they need to navigate financial landscapes more successfully, proactively, and independently.

Additionally, adolescent students can be leveraged as sustainability partners for innovative education programs. Lumni-Peru is an education financing firm that aims to increase access to higher education for a wider population of Peruvian students.  They identify high potential university students and provide promising candidates financial aid to meet most of their education needs. In return, the beneficiaries commit to paying a defined percentage of their future income (at least 10%, but no more than 15%) for a set period of time (no more than 7 years).

Lumni-Peru's investment model is attractive to investors and sustainable because of the high potential of its beneficiaries. Students selected by Lumni-Peru are university students in their mid-university careers, studying in fields of high employment demand and achieving promising results. These students are trained in 21st century soft skills in order to further prepare them for employability, and are further guided by nearby senior executives with over 8 years of experience, who offer them mentorship and coaching throughout their engagement with Lumni-Peru, on a volunteering basis. With this innovative financing model, the better Lumni-Peru is at identifying and developing employable youth, the more funding they will have to continue their impact.

From uncertainty to prosperity

As financial institutions expand throughout lower and middle-income countries, knowing what to leverage, as well as what to avoid, will be more important than ever for young people. Forward-thinking educators understand that a modern education must include knowledge about emerging markets’ new financial landscapes. From microcredit to mobile banking, from bookkeeping to networking, today’s young people are competing in a very different world than their parents. Preparing these children with the skills and competencies they need to thrive is not just an urgent educational priority, but is also a promising investment opportunity we can’t afford to ignore.

Duncan McCullough is a Senior Communications Associate at the Center for Education Innovations, proud Masters graduate of George Mason University, and former White House Staffer.

Photo Credits: Junior Achievement ; Beyond Access Africa ; Junior Achievement

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