CEO Stories with Mac Gardner, FinLit Tech
The U.S. could and should be doing more with financial literacy, according to Mac Gardner, Chief Education Officer at FinLit Tech. His company creates tools to aid in achieving financial literacy, which he believes is crucial to closing the wealth gap in this country. Financial literacy is more than learning to manage money; it’s understanding the power of money. Fintech is the tool that gives people knowledge, allows them to implement it, and achieve financial wellness.
Florida became the latest state to require students to have some financial literacy education before they can graduate from high school. Still, fewer than half the states require any kind of education in economics or financial literacy, leaving education about money and finances in the hands of families. If people don’t have the knowledge themselves, they are ill-equipped to pass along useful information or good habits to their children. Add in cultural taboos related to talking about money, and the lack of opportunity for children to learn becomes apparent.
THE TOOTH FAIRY GOES DIGITAL
As financial transactions increasingly become digital – even simple ones, like giving children allowance or visits from the tooth fairy – there is the possibility that money could become an even more abstract concept for children. Yet it also offers great possibilities for learning and creating strong habits. With that in mind, FinLit Tech is developing a new methodology for teaching financial literacy to young people: TAT (teach, analyze, track progress). Financial literacy is achieved by habit and doing, says Gardner, not by merely reading about money, and good traits, behaviors, and habits lead to financial wellness.
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This Is Capitalism: Mac Gardner, FinLit Tech
April is financial literacy month in the United States. But are we really doing enough to educate children about money? After all, fewer than half the states require any kind of formal education in economics or financial literacy.
According to Mac Gardner, Chief Education Officer at FinLit Tech, we’re missing out on a huge opportunity to help close the wealth gap.
He joins us today to talk about why financial literacy matters, how to increase awareness in children about the power of money, and the relationship between financial knowledge and financial wellness.
POC: Hey Mac, it’s great to see you today and to speak with you. And I see that you’re wearing your Financial Literacy Month t-shirt.
MG: Happy Financial Literacy Month, Patricia!
POC: So first of all, Mac, define for us financial literacy.
MG: So, we actually view financial literacy as really the education that is poured into us to give us guidance when it comes to managing our money, but we look at it actually as a formula. So there’s financial literacy, which is the education, very important, but in order to really achieve financial wellness, which is what folks are striving towards or trying to get to, we need financial literacy education plus we need the financial capability, which are the tools to be able to implement that knowledge and education and that is in our belief what gets us to financial wellness.
POC: And just to clarify, when you say our belief, that is in your role as the Founder and Chief Education Officer at FinLit?
MG: Yes, at FinLit Tech. our mission is to build a bridge between financial literacy and financial technology because we believe that, again, that education is great, you can go and Google and you can get a bunch of education but the fintech, the technology is really the tool that allows folks to be able to utilize education, implement the education, and actually achieve financial wellness.
POC: You live in Florida and Florida just announced that it is now requiring I believe it’s a half credit in economics or financial literacy?
MG: Yes, it was a very important day for the folks in Florida, for young people in Florida, I just think people in Florida altogether. It had been in the works for about seven years, a lot of people don’t realize that. The legislation passed and starting in the 2023-2024 school year high school seniors are going to be required to take a half credit course, a financial literacy course, in order to graduate.
So, before that, there were offerings if a student wanted to learn about financial literacy and learn about checking accounts and debt and saving and investing but it wasn’t a requirement. And the rule or the legislation that just recently passed, it now requires a half credit course to graduate.
POC: So, what does this mean to you, Mac? Do you think it’s enough, too little too late, better a little than nothing?
MG: And just to frame it up for folks, there are 23 states that offer/require any sort of financial literacy by high school. But there is a Cambridge study that came out a few years ago that shows that a child’s connectivity with money, Patricia, actually starts as early as age seven.
So, if and when you live in a state that requires any sort of financial by your senior year in high school, which you’re typically 17, 18 years old, that is still ten years’ worth of misinformation or no information that you’re getting.
So, am I glad that this rule passed, and that this legislation passed? Yes, I am happy that schools are finally realizing that they have an important part in this mission to financial literacy for everyone, but it could theatrically start earlier.
POC: If kids don’t have any formal access to education, such as what you might offer through FinLit or other apps, other technologies available, other sources of information, how much of their education is formed in them by just observing perhaps what their parents do or family members do or what their peers do?
MG: Sadly, that’s where a majority of the education comes. And so, it is a vicious cycle if you think about it because if the parent never got any sort of formal education about what to do with money, how can they teach their children? And so that was really the driver behind The Four Money Bears book.
I talk about the three Rs, Patricia, of our connectivity relationship with money and it happens when you’re a child. The first R is you realize what money is. You pick up a dollar or someone gives you money and you say oh, this is money.
The second R is you recognize the function of what it does in your life. And for most people, young or old, the recognition of what money does is two-fold – they know they can spend it; they know they can save it. And especially when it comes to young kids, that’s really all they are aware of.
And so, once you realize what it is, once you recognize what it does, then you can start rationalizing how to use this tool in your life. But if your only awareness of the function of money is two-fold, spending and saving, you are limited into what you believe it can do for you.
The whole idea behind The Four Money Bears book is to open up the mind of young people, and parents too and old people, that you actually have four options. You can spend it, save it, invest it, or give it away. So, imagine now a five, six, seven-year-old who is sitting down and saying oh, Mom, Dad, we have some options here. Besides just buying stuff and putting it in a piggy bank, what’s this investing? I can buy shares of Nike. What’s this giving? We can give money to these organizations.
POC: Do kids identify as one type of money bear versus another, if you will?
MG: It’s hilarious, they actually do. And some of the best feedback that I have received on this book is when a parent will get the book and then they will share it with their child, and they will start seeing little behavior patterns and amazingly association. Like, the child will be like oh I’m a spender bear or I’m definitely a saver bear or I’m a giver bear and it’s really, really neat.
You don’t hear investor bear as much because investing typically isn’t a concept that is shared with young people at a very early age. But once you start explaining to them the difference between saving and investing and this thing called risk and the way that you can make more money over time…
Funny, funny story. I shared the book with a colleague in south Florida and her son was reading the book.
POC: How old was he?
MG: He was about seven or eight.
He comes into their bedroom with the book, he opens the book and shows his mom and says, “Mom, I want to buy a Maserati one day, if I want to do that, I need to be an investor bear to make a lot of money, don’t I?” And she was floored.
If we can start having stories like these where a young kind is talking to his mom and dad or grandparents about investing money and how they can grow their money long term, I think we can do some really cool things in our society.
POC: Well, if you’re going to be talking about investing, I think you’re going to have to introduce risk rat.
MG: [Laughs.] Hey, it’s a concept. And if we can put it in an animal form and help kids understand it, why not?
POC: If you teach them one thing, let’s say you’re the parent who believes it’s really great to connect kids to money, give them tools, give them books, all that, and help them understand the concepts, but as a parent perhaps you don’t exhibit financial wellness. What’s going to really resonate with the kid more – is it what they observe or what they read, do through the technology?
MG: So, one of the things that we are really excited about this new app that we’re developing, the Berryville app, is we developed a new methodology for teaching financial literacy for young people. We call it the TAT method, which is where we teach, analyze, and track progress.
For so many years the financial literacy process was hey, here’s a book or do this and then you read it for a day, you go somewhere and okay, you’re financially literate and move on. But financial literacy and financial wellness is something that’s developed by habit, it’s something that you do over time on a regular basis. I talk about habits, behaviors, traits – good habits become good behaviors, good traits.
So, most young people, they absorb how Mom and Dad talk about money. They watch what they do, they see when they go to the grocery store, are they actually looking for the better price? And you can try to teach them and give them this guidance but there is always going to be that conflict if they don’t actually see it being implemented by the seniors or the old folks in the home. So right now, the way things are set, there is more habits that are being absorbed because there really isn’t a lot of formal education out there for at least young people as young as kindergarten and that age.
POC: Do parents have to be intentional about teaching kids about money?
MG: Our society as a whole is already one that shies away from talking about finances, right? And because it’s sort of taboo, you need to be intentional about having the conversation because of that whole possibility for misinformation or no information.
And we live in one of the strongest countries from an economic standpoint in the world. We need to be able to teach our young people how to utilize the tool that got us to where we are as one of the strongest economies on the planet.
POC: What happens when parents have differing money personas themselves?
MG: Yeah, that’s a fun one, that’s a fun one. You can look at it as either good or bad.
POC: Education in action.
MG: Exactly. So, you may have one parent that’s a spender bear and you may have another parent that’s a saver bear and it gives that child two different perspectives. I think one of the big things that we really want to get across with this book and through this concept of the Four Money Bears is just making young people aware that they have options. Right?
Spending is necessary, saving is necessary, Investing, if you want your money to grow for you. I always like to say that your money can work harder for you than you can work for your money. That’s what investing is, that’s having your money work for you. And then giving, the power of altruism, why it’s important to give back to people, to communities, to organizations. So, I think that is really the most important thing is that young people realize that they have options even though one may do things a little bit more than the other but that all these four things need to work together.
POC: Also, when I think about spending, there is of course the necessity of spending but there is also discretionary spending. You know, nobody really loves paying their electric bill, but you have to do it. But it’s fun to buy yourself something that you’ve worked… you’ve had as a goal, you’ve wanted.
MG: For sure. The four rules of the Four Money Bears are to spend cautiously, save diligently, invest wisely, and give generously. And the reason why we say spend cautiously, it doesn’t mean that you shouldn’t spend it just means be wise when you’re spending your money.
I don’t think anyone will ever say that there is anything wrong with buying things… you want to reward yourself, you want to go have a nice dinner, you want a nice outfit, something on those lines, but you can be wise as to how you spend that money in every interaction that you have when you’re utilizing that money. Because if you start with that sort of spending cautiously mindset, it then allows for you to be able to save. Because the big issue that is here in our country is overspending, you know?
So that’s why we talk about spending cautiously because if you spend cautiously, that actually allows you to potentially save. And then if you can save, then there is the opportunity for you to invest. Because once you have taken care of the nest egg and the savings, emergency savings, you can then utilize that money to do other things and then give.
POC: Is money something that parents have to be in agreement about in terms of teaching their kids about it?
MG: I think it helps. One of the other contentions, I guess, out there is who is responsible for teaching young people, or people, about money? Is it parents, is it schools, is it some organization that’s some government organization that is responsible for it? And I think we have done surveys in the past and usually the response, the typical response, is that money habits and learning about money should start in the home and it typically is a parent.
The other thing that we have done a lot of research on is socialization of certain things in our community. So, you know, language is socialized, food is socialized. The question is why isn’t money or financial literacy socialized? Why isn’t that talked about? And if it was, how beneficial would it be for our society if we started having these conversations early in our children’s lives?
So, I think the most important thing is that the conversation is had. Even if the perspectives are different, it’s important for parents to sit down with kids and at least explain to them at bare minimum the four functions and the fact that they have options.
POC: How do you teach kids about money in a time when the four functions of money are becoming so digitized and maybe there are kids who don’t actually ever see money or don’t see it very often? Is the Tooth Fairy going to start making digital deposits?
MG: So, I love that question. What we have found is that there still is a demographic of young people that still get money and it happens to be elementary school students, elementary school kids. You know? So personally, I have three kids – a 15-year-old, a 13-year-old and a seven-year-old. And the seven-year-old gets money. He will, when the Tooth Fairy comes, we will give him some cash here or there. So, there are still cohorts of children that are still getting money.
The question though really lies is once these children start getting older and start accessing these tools. One of them I think about is Green Light. It’s a digital app. Two of my kids actually have it. They go on and I can give them an allowance and they have a debit card, and they can go around, and they can use it when they go to the mall with their friends.
POC: Can you take money away from them, Mac?
MG: Yes, you can.
POC: Oh, now we’re talking.
MG: Yeah, yeah you can give it to them, and you can take it away. So, you’re right, there are these digital tools. But that’s why the educational process is so important to start early, Patricia, because think about it, if they are not getting the cash and it’s not as tactile as it was in the past and you now have these devices that allow you to move things and do things so easily, you are all the sudden given this super cool tool that can do all these really neat things but you better know how to use it. Right? You better understand that yes, I have options once this money comes in.
And I think that’s the really cool thing about the times that we live in today. We can teach people, young people, about what to do with it. We can now teach a young person about stock and the technology is around where this child can actually purchase fractional shares. You can buy $5 worth of Starbucks; you can buy $5 worth of Nike.
So, it is a double-edged sword, technology, but I think we are living in a fantastic time where if we can provide the education and then combine that with the tools and the tech, we can do amazing things. We can close the wealth gap in years if we’re looking at societal issues that can be cured through financial education.
POC: But what do you think really is the potential or the goal if all 50 states required some sort of financial literacy or financial education and maybe earlier than senior year and maybe more than half a credit?
MG: One of the… there’s multiple, multiple answers to that question but one of the things that we foresee when we are building this Berryville app is to provide an on-ramp to a child’s financial education journey. We have a feeling that most young people, when they start playing this game, they are going to be buying a lot of stuff for their bears and we have to start shifting their vision to see that they have other functions.
Imagine being able to drop a game into an underserved, overlooked community and all of a sudden the conversations that start being had in these communities are ones that allow these children, that household, that community to start growing and thriving because they now realize that it’s not just a two-fold, bifurcated solution when it comes to money. You actually have four. And imagine that seven-year-old, through the technology that is available, starts investing by age seven.
Whereas most people don’t start that investing journey until they are in their twenties, sometimes thirties, when they get their first 401K account or maybe someone says hey, you need to buy X, Y or Z. Imagine that society, imagine where there’s no, or not as much, strain on social security, strain on the government to take care of folks, because they have already started investing on their own, they have grown their own portfolios on their own. So that’s where we see the benefit of starting it early is to give young people a longer runway to really benefit from what money can do for you.
POC: In terms though of personal experience with money, what do you remember? Do you remember getting money? Do you remember spending money? Do you remember watching your parents spend money?
MG: Yeah, for sure. So, we’re from the Caribbean, of Caribbean descent, and I remember when I was young, growing up in Antigua, my grandmother didn’t really have a lot but was able to make the dollar stretch and make whatever it is that came into that household last. And so that was some of the first things that I remember about money is not having a lot of it. [Laughs.] So, when it’s there you make sure you could get as much out of it as possible.
And then from the investing side and from just the basic core… I literally remember my dad sitting down with me when I was about eight, nine years old and writing down assets, liabilities on a balance sheet, income, expenses. And again, I was fortunate because my dad got his MBA in finance and so he was like, “Look, this is the stuff you’ve got to focus on. So, I was like, “Okay!” [Laughs.]
POC: What about earning? That’s one of the things you can do with money. So, do we need a fifth bear?
MG: It’s so funny you say that, that’s one of the responses that we would get back from folks. Like, “Mac, love the Four Money Bears, love that you’re teaching kids what to do with the money once they have it, you got anything up your sleeve for teaching them how to earn it and how to earn?”
And so we’re not going with a book for that but that’s really what the whole idea behind the Berryville app is about is teaching both sides of the personal finance fence, not just what to do with money once you have it but how do you earn it and how do you control that and running a business as an entrepreneur is one of the best ways to do it. So, we’re working on it. We’re getting there.
POC: Talk to me about the app, Mac. I think you said it’s still in development.
POC: is it in beta phase where people can take a look at it?
MG: So, if the listeners are hanging out in front of a laptop or a computer or their phone and they went to www.thefourmoneybears.com, you will learn about our teach kids money mission, you’ll see what we are doing to develop the app, you can actually download the demo of the app either Apple or Android.
POC: Well, Mac, as I say, thanks again for talking with us during Financial Literacy Month. And if you want to find out more about FinLit Tech?
MG: At www.finlittech. FinLit tech is short for financial literacy technology and so that is a space that we believe is a growing area. There’s a lot of tech to help you do stuff with your money, banking, lending, investing.
There’s not a lot of tech out there that’s helping you learn and teach you about your money. And so that is really the space that we are building out and developing and starting with the Four Money Bears app, as I said, that’s an on-ramp to a child’s financial education experience and all the way through.
POC: All right. Well, Mac, Happy Financial Literacy Month.
MG: Same to you, Patricia. And as I like to say, the journey continues.
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