Category: Behavioral Finance

Don't Forget The Parents!

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Oct 10, 2017
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NGPF Fellows, Activities, Advocacy, Behavioral Finance, Featured Teachers, Lesson Idea, Teaching Strategies
A blog post from NGPF Fellow, Kerri Herrild: -------- There are many reasons why I would not enjoy teaching elementary students. One is that I like it when students can blow their own noses, tie their own shoes and zip their own coats.  Another reason is that I don’t have to worry about sending home cutesy newsletters and calendars peppered with ClipArt to parents.  By the time students reach the high school, let’s be honest, we don’t communicate with parents very...

Chart: What Are The Mental Mistakes We Make And Why Do We Make Them?

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Oct 09, 2017
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Current Events, Chart of the Week, Behavioral Finance, Research, Question of the Day
Answer (from Visual Capitalist): There's a lot of them (and that's what makes us human). This chart shows all 188 cognitive biases we have (click for higher-res version): Questions: Chose 3 of the cognitive biases on the outside part of the circle (there are 20 of them) that you think you are most prone too. Give examples of times that these cognitive biases have crept into your thinking. Here are a few examples: We tend to find stories and patterns even when looking at sparse data: "I heard...

Developing Future Mindedness in Students

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Oct 06, 2017
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Employment, Tips for Teachers, Teaching Strategies, Featured Teachers, Behavioral Finance, NGPF Fellows
Credit to NGPF Fellow, Barbara O'Neill for the following post: According to research by Sarah Newcomb, a behavioral economist at Morningstar, people who focus on the future and feel that they create their own financial destiny tend to save more than others for retirement and other financial goals. When people focus on the future, they tend to be less impulsive (e.g., spending habits), regardless of their level of financial literacy. In other words, time orientation is a key factor in financial...

NGPF Podcast: Back To School Special With Educator Brian Page of Reading High School (Reading, OH)

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Sep 15, 2017
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Podcasts, Advocacy, Budgeting, Behavioral Finance
It's our back to school special with Brian Page, educator at Reading High School in Reading, Ohio. It's becoming a rite of passage on the NGPF podcast with Brian making his third appearance to discuss his summer activities (he did some great advocacy work for us) and the new honors course he developed. He shares some of his favorite activities and how a new book has made him rethink how personal finance should be taught. Oh, and listen closely to hear how a cologne purchase brought happiness to...

How to Teach Personal Finance with an Index Card. A Guest Post by Barbara O'Neill.

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Aug 28, 2017
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NGPF Fellows, Teaching Strategies, Financial Literacy, Featured Teachers, Behavioral Finance
Barbara O’Neill is an NGPF Fellow and a Distinguished Professor at Rutgers Cooperative Extension in New Jersey. In addition to teaching, Barbara also organizes and facilitates professional development for high school personal finance educators in New Jersey. In August 2017, Barbara facilitated two Financial Education Boot Camps and had educators work through the following Index Card Activity. ------------- Back in March, I wrote a NGPF blog post about my three-month curation of financial...

NGPF Podcast: Tim Talks To Behavioral Economist Dr. Sarah Newcomb

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Aug 27, 2017
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Podcasts, Behavioral Finance, Budgeting
  Today on the podcast is behavioral economist Dr. Sarah Newcomb, the author of Loaded: Money, Psychology and How To Get Ahead Without Leaving Your Values Behind. It's a thought-provoking book that focuses less on the mechanics of managing money and more on the psychology. Specifically, Sarah challenges us to look inward to identify the narratives or stories that we tell ourselves about our relationship to money. These stories can help us or sabotage our financial lives but the...

Video: What Is the Future of Retailing?

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Aug 24, 2017
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Purchase Decisions, Budgeting, Behavioral Finance, Video Resource
Interesting video (duration of 8:48) from PBS NewsHour: "Is traditional retail dead? There have been more store closings this year than any since the Great Recession, with retailers filing for bankruptcy at a record pace. And yet online retailers like Amazon and Warby Parker are adding brick-and-mortar stores. What’s the secret to keeping afloat as shopping evolves? Economics correspondent Paul Solman reports." Questions: What is having the most dramatic impact on the demise of...

For Financial Success, What is More Important: Habits or Goals?

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Aug 17, 2017
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Behavioral Finance, Article, Question of the Day
I think this may be my new mantra: You better have a plan to develop new habits if you are trying to achieve goals that have eluded you for years. Willpower may simply not be enough.  So, just down the road from our offices, a Stanford professor has focused his research on understanding how we can form habits. He provides a simple three step approach in this article from Quartz: According to B.J. Fogg, a psychologist and researcher at Stanford University who has studied behavior...

Schools in the News

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Aug 16, 2017
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Schools In News, Teaching Strategies, Behavioral Finance, Personal Finance, Career
Showing Students it’s OK to Not to Have it All (Jump$tart) For MaryBeth, personal finance is – personal. She began her career as a credit union teller and saw that some of her customers lacked basic financial knowledge. To help, she worked to build relationships with her customers and help them be more financially secure. She did this by explaining the difference between debit and credit, helping customers with checkbook reconciliation and loan counseling. Innovative Educator...

Question: How Risky Is The Stock Market?

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Jul 20, 2017
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Behavioral Finance, Question of the Day, Research, Index Funds, Investing, Stocks, Chart of the Week
Answer: It depends on your time horizon. Short term, it’s risky. Long-term, not so much. Great chart here (from Barclays) demonstrates how your probability of making money (“gains”) in the stock market increases the longer your time horizon: “This chart shows the proportion of gains and losses we observe for the same investment (the MSCI World Developed Equities Index) as we change our monitoring horizon from 1 day to 5 years:” Let me explain: First, the MCSI...

Question: Can Stock-Picking Make You Feel Like A Loser? The Psychology of Investing

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Jul 19, 2017
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Investing, Behavioral Finance, Current Events
Interesting read (about 5 minutes) from Of Dollars and Data that describes why passive investing is less likely to leave you with psychological scars that lead to sub-optimal decision-making: Think of it this way: If you put a sizable portion of your net worth into individual stocks, and those stocks underperform the market, this would challenge your identity. You might start to think that you were a loser because you made a choice that lost you money. This explains why investors tend to sell...

NGPF Podcast: Tim Talks To USAA Product Designer, Vikram Parekh

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Jul 16, 2017
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Behavioral Finance, Research, Investing, Savings, Podcasts, Compound Interest
I recently served on a panel with USAA’s Vikram Parekh at the Visa Financial Literacy Summit in Chicago. In my research for the panel, I discovered that Vikram has a really cool job at USAA, which is not your typical financial institution. Their customer base is drawn from military and their families and to say they are hyperfocused on their customers’ financial wellbeing is probably an understatement. You will hear how Vikram uses principles of behavioral finance to get...

Video: How Can We Overcome Our Behavioral Biases Against Saving?

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Jul 12, 2017
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Behavioral Finance, Question of the Day, Savings, Current Events, Video Resource, Retirement
Hat tip to Vikram Parekh of USAA (podcast upcoming) for highlighting the work of one of his favorite behavioral economists, Shlomo Benartzi of UCLA’s Anderson School of Business. In this 17 minute TED video, Shlomo highlights the hurdles to saving and how he designed a savings program (“behavioral economics on steroids”) to overcome these challenges. He provides some good examples that you might use with your students to show how our behavioral biases cause us to fall short of...

NGPF FAVORITES: Our Best OFF TO COLLEGE Resources

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Jul 07, 2017
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Activities, Credit Scores, Activity, Behavioral Finance, Career, Paying for College, Budgeting, Savings, Student Loans, Stocks, Current Events, Interactive
This month’s NGPF Favorites List comes from Sid Sharma – one of NGPF’s veteran “Power Interns” who has been with us for 3 years. Sadly, we will wish him well as he heads off to college this fall! We wanted Sid to reflect on his NGPF experience (he has literally “touched” every element in the NGPF curriculum) and highlight the resources that have enabled him to become the knowledgeable, action-oriented, process-innovator that he is today!...

NGPF Podcast: Tim Talks Behavioral Finance and Investing with Daniel Crosby

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Jul 02, 2017
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Podcasts, Behavioral Finance
If you love to learn about behavioral finance and how it can make you a better investor, then you will enjoy my recent conversation with Daniel Crosby. We delve into his early years and learn that Daniel grew up in a financially knowledgable family where his father referred to “debt” as that “d-word.” Daniel sees the world of finance through multiple lenses, given his background as a psychologist, financial advisor and author. We will go into detail about his...

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