Financial Mentoring: Teaching Toward an Affordable Future

Social mobility is something that's been written about by countless authors in various cultures, societies, and ages. Traditionally, you weren't able to move from one caste or class to another. It's become a mystical goal in our own society, as well. The ideal that this age-old American Dream can occur if we work hard has long been lost. Consumerism, credit, and direct deposit have taken a lot of that magic away.

Let's fix it.

Financial education, literacy, curriculum, or planning -- whatever you want to call it -- doesn't go as far if you don't pair it with practice. This was the idea that spurred the revolution we now see in Southern Nevada. We have students actively involved in learning about personal finance while actually saving money weekly.

It's called The Piggybank Project in Las Vegas, or K2C in San Francisco, but whatever you call it, the idea is to pair passionate mentors and great curriculum along with the practice of actual banking -- not just a simulation. The model has personal coaches teaching money skills throughout the school year. Engage the parents through the homework assignments, and couple all of this with real-world application through a real bank account.

And it works. With the first- to fifth-grade students at our three schools, we're approaching $100,000 in deposits -- in just four years.

I encourage each of you to get involved in any way possible. No program starts off perfect. We're far from there ourselves. So here's how it has to work.

1. Excitement!

You have to achieve excitement throughout the student body, the faculty, and the parents. Our students' goal right now is saving for college. This is an ideal goal. Studies show that a student is six or seven times more likely to attend college if an expectation (such as a college savings account) has been set that they will one day attend college. The actual money saved in that account made little to no difference. Parents also have to be excited, and we'll need their buy-in.

2. Curriculum!

We believe that targeted, ever-adapting curriculum is the way to go. Make sure that the curriculum works for your students, and make sure that it scales to the entire school. You have to build on the materials and lessons with every grade. It's not a one-day or one-grade-level course. You should be working with students on these topics throughout their education. And if you can directly pair the curriculum with banking, that's even better.

Here are the basic lessons that everyone from a first-grade student to a senior citizen should learn. There are many more lessons that can be added, but this is always at the core of our programming. And remember that elementary students need to be engaged in a fun, exciting way.

1. Needs vs. Wants

This lesson serves as the base for all future personal development with regards to financial education. Needs can change. Wants are OK as long as we're taking care of needs first.

2. Setting Goals

Yes, wants are certainly OK. And when you start planning for those important wants, they become goals.

3. Budgeting

A budget is a plan for your money. All of those goals that you want to achieve cost money, and a budget can make sure that you take care of your needs and achieve those wants.

4. Smart Spending

Faced with the practice of impulse shopping and the idea of instant gratification, we have to shape students' perceptions toward money and how they can still be happy while forgoing some purchases.

5. Banking

Students need to understand the importance of saving and where that money really goes. This is a great time to introduce the concept of interest and loans.

We've included a video that our organization created this year for the Comal Independent School District in Texas:

3. Partners!

Find a partner. You may need financial support for supplies, curriculum, or staff. Look into your community for banks and nonprofits that can support you. When it comes to the actual bank operations, your best bet will be a credit union or a local bank with a vested interest in your community. You will likely need parents to approve these accounts for their children (hence the excitement mentioned above). Make these partners feel special -- they'll be opening hundreds of accounts that will propel students to college and beyond.

4. Planning!

Make every partner, volunteer, teacher, and participant feel heard. Your first year will be riddled with logistical nightmares. That's OK. Year two will be better. By year three, you'll look like a radical that has been pulling this off effortlessly for years. What will a banking day look like? How will we send the students to the bank? Will we even have a bank, or will they go to a local branch with their parents? How do we incentivize homework completion? How do we schedule classes? These are all questions that you'll need to address before the program starts. Then you'll need to follow up often on how things are going.

Planning really is the bottom line for this whole endeavor -- financial planning. Remember, setting an early expectation for college makes it six or seven times more likely that your students will get there. Why not start them on this path right now?

In the comments below, please tell us your thoughts about and experiences with financial mentoring.