A 2008 study by the Jumpstart Coalition for Personal Financial Literacy found that high school seniors in 2008 only scored an average of 48.3% on a financial literacy test. Only thirteen states in the United States have legislation requiring financial literacy topics for graduating twelfth graders. Yet, many states have failed to provide the funding to adequately cover these lessons, forcing it to be jammed into Civis, History and Economics courses.
While online calculators can compute loan payments, budget sheets, and other mathematical equations for everyday life, they don’t teach the reasoning and meaning behind these numbers to improve financial decision making. Many college students today graduate with thousands of dollars in loan debt and little to no knowledge about interest rates and consolidation.
A large part of the financial crisis we’re currently facing can be attributed to predatory lending, says Britt Carr, an interactive learning technology consultant and developer at Advanced Authoring.
“If more people were more financially literate, they may have thought twice about buying a home that they wouldn’t be able to afford in a few years,” says Carr.
To address the void of financial literacy in K-12 and college classrooms, Carr has set out to create a mobile game to teach students how to achieve happy, healthy retirement through game play. Carr was first introduced to the idea to create a game around personal financial planning to help teach financial literacy to college students by his wife.
“My wife was teaching a class about aging to a bunch of college students who planned to retire at 55 without any clear idea about how to accomplish this,” he says. “The traditional method of teaching personal finance provides no context for students today. There’s no real meaning to them.”
When visiting classrooms to learn more about the ways that students are learning these subjects, Carr was shocked to find out that one local high school spent only two weeks covering personal finance in the midst of a World History course.
“How can you teach teens a lifetime of critical concepts in two weeks?” asks Carr. “Unless you have their undivided attention, you can’t.”
What’s more, he interviewed several college students on a major college campus who could not define or apply concepts such as an adjustable rate mortgage, term life insurance, deductibles, or more. These are basic skills that high school and college students are ill equipped to face after graduation.
Carr argues that students today may not need to know how to balance their checkbooks, but they will need to know valuable financial skills to manage their expenses in new ways. “When it comes to managing a lifetime of money,” says Carr, “the lessons need to be meaningful to the learner.”
Carr’s vision for the mobile game, The American Dream, requires students to make financial decisions to reach retirement by staying out of debt, balancing a budget, and coping with unexpected life events. The game is personalized to each player with a few preliminary questions targeting attitude and lifestyle preferences.
“It’s not all about math,” says Carr. “Think: The Sims meets Survivor.”
The game sets the groundwork for monthly budgets by giving the player choices in a career and starting salary, rent or mortage, and transportation. It then takes you through a simulated life, facing events such as increased inflation, changes in cost of living, and pay raises. It seeks to simulate positive and negative changes that affect financial decision making.
Carr is working on two versions of the game. The commercial version will integrate with Facebook and allow players to compare scores and choices with friends who are also playing online.
An educational version will allow an educator to set the market dynamics in order to reflet current events. This gives teachers the ability to teach around natural disasters, stock market and real estate trends, and more. This gives the educator the opportunity to monitor student choices and facilitate discussion or misunderstandings.
“I wanted to leave room for dicussing how the gameplay mirrors the real world,” says Carr. “My idea is to deliver information in an engaging, personalized, low risk format as homework. So that when students get into class, they can discuss strategies and situations with their teacher.”