Know Thy Source: Rule #1 in Digital Literacy

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Jan 12, 2017
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Advertising, Behavioral Finance, Research, WebQuest, Teaching Strategies, Current Events

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Those who use NGPF resources know that we place a premium on teaching students how to navigate the web, discern credible sources of information and do the research required to make sound financial decisions. Occasionally we get pushback that our content should be “commercial free” and that linking to an online article that has ads anywhere on the page is “commercial” and students should not be subjected such distraction. Newsflash: The Internet has gone commercial. All that free content has to be paid for somehow. Isn’t it better that we teach students to be skeptical, critical thinkers about advertising instead of pretending that they can wall themselves off in an ad-free world. 

I mention this because I just came across a recent Tom Friedman column that referenced a study out of the Stanford Graduate School of Education about the frightening lack of digital literacy among young people. This specific passage caught my eye in this study:

One assessment required middle schoolers to explain why they might not trust an article on financial planning that was written by a bank executive and sponsored by a bank. The researchers found that many students did not cite authorship or article sponsorship as key reasons for not believing the article.

Especially in the world of financial services, you better know something about the source of the content that you are reading. On Wall Street, they call it “talking your book,” when investors go on CNBC to tout the stocks that they are most excited about. Guess why they are excited, they own the stocks they are touting and want you to own them too and drive up the stock price in the process.

I showed this video “How to Build Credit From Scratch.”  at a recent workshop. About 30 seconds into the video, the narrator discusses how having a checking account at a bank can make it easier to get a credit card or loan from the same institution. Why does this matter? Well, let’s think first about the source for this video (a major bank) and second that this practice of aggressively cross-selling additional products is what got Wells Fargo in trouble recently. What a great teaching moment to emphasize the importance of comparison shopping and not just accepting a product without ensuring the potential for a better deal elsewhere. What may be great for the bank’s profitability may not be in YOUR best interest. This is the sort critical thinking we need to bake into every personal finance curriculum!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.