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Okay, so that\u2019s not a real headline. But these are:<\/p>\n
\u201cDebt: Get out and stay out.\u201d – The Globe and Mail
\n\u201cEscape the debt trap.\u201d – MoneySense
\n\u201c8 ways to save money.\u201d – Reader\u2019s Digest<\/p>\n
Everywhere I look, there are people telling me how and why to save my money.<\/p>\n
I\u2019m smart, but I\u2019m still graduating with nearly $20,000 in debt. And I\u2019m far from the only one. It\u2019s 2014, and the Western world is in more debt than ever before.<\/p>\n
So, is all this advice really working?<\/p>\n
\u201cFinancial education is not going to have an impact,\u201d says Saul Schwartz, a professor at Carleton University’s school of public policy and administration.<\/p>\n
\u201cThere\u2019s a whole industry trying to get us to give into our immediate desires at the expense of our long-term interest,\u201d Schwartz says.<\/p>\n
In the fall, an American study<\/a> titled \u201cFinancial Literacy, Financial Education and Downstream Financial Behaviors\u201d was released. In it, three professors conducted a meta-analysis of 168 papers on financial education, and found that \u201cinterventions to improve financial literacy explain only 0.1% of the variance in financial behaviors studied.\u201d<\/p>\n In other words, financial education has very little impact on people\u2019s decisions. Instead of offering long-term financial advice that has reduced impact over time, the authors suggested more efforts focused on \u201cjust in time\u201d financial education. That means specific advice tailored to an individual\u2019s immediate needs.<\/p>\n That\u2019s the kind of writing Bryan Borzykowski likes to do. He freelances personal finance stories to publications like MoneySense and CNNMoney. Borzykowski tailors his writing with a sense of immediacy for people his age who are starting families and buying homes. \u201cWhere can this help somebody? What would I want to know?\u201d Borzykowski says.<\/p>\n \u201cInformation on what stocks to buy or a tax strategy is useless to somebody who is in fear and anxiety around money,\u201d says Karin Mizgala, a financial coach and author of Unstuck<\/a>.<\/p>\n Mizgala says people are making financial decisions, like putting money into an RRSP, without really understanding what they\u2019re doing. When people are struggling to deal with their finances it\u2019s often hard to take a step back and decide on a course of action.<\/p>\n Making saving fun<\/strong><\/p>\n People don\u2019t save because it\u2019s boring, says Michael Norton, a Harvard professor and the co-author of \u201cHappy Money: The Science of Smarter Spending.\u201d<\/p>\n \u201cYou shouldn\u2019t eat pizza, we all know that,\u201d says Norton. \u201cMost people know they\u2019re supposed to save, but in the moment we want to spend.\u201d<\/p>\n One way to get people to save money is to make it more fun, he says. It\u2019s not that foreign of an idea — take the piggybank. As kids, Norton says, we\u2019re trained to save our money in an exciting way, with the reward of smashing the bank when we\u2019re ready to spend. Adults could compete openly on Facebook with friends, the winner determined by whoever saves the most money.<\/p>\n Whether it\u2019s Facebook competitions or financial planning apps, Norton believes the gamification of saving is an important step in the right direction.<\/p>\n \u201cWe need to change the way we think about what we\u2019re spending,\u201d Norton says.<\/p>\n