Weak Financial Literacy Scores Threaten a Global Education Movement

Practical application education of personal finance would definitely help our youth grow up to have a deeper and clearer understanding of money and how they ultimately manage their money ... in general making them responsible, upstanding citizens through financial education!

The global movement to teach kids about money in school has produced little hard evidence that the effort is paying off. That doesn’t mean it’s all been a waste of time, or that we’ll never get the results we want. But it certainly gives doubters ammunition.

In a series of financial literacy tests dating to 1997, the JumpStart Coalition for Personal Financial Literacy has found that young people’s understanding of personal finance has remained consistently sub-par. Given the energy put into financial education over the past decade, this is disheartening news.

Meanwhile, the FINRA 2009 National Financial Capability study found that only 30% of the population can do a simple 2% calculation and has even a basic understanding of inflation and risk diversification. The 2012 wave of that study will be released soon and reportedly shows no improvement.

Weak financial literacy scores have galvanized dozens of nations, thousands of nonprofits, and countless educators and policymakers in the attempt to raise the financial I.Q. of people around the world. But test scores that show no improvement are now galvanizing the opposition, which believes no amount of instruction will lead to broad improvement in the way individuals manage their money.

This lack of evidence presents a huge challenge to the financial education movement if it is ever to amount to more than a bunch of disjointed initiatives funded in large part by highly conflicted banks and other financial institutions. Unfortunately, proving long-term behavior change in a fairly new area of study can be difficult.

In my view, the effort is worthwhile. It simply makes no sense that people cannot learn to be better money managers. We have to keep trying and keep looking for a method that works. Young people are starting to understand that personal financial management is a skill they’ll need for a lifetime. We should give it to them.

In recent testimony before a Senate subcommittee on Children and Families, Annamaria Lusardi, director of the Global Center for Financial Literacy at the George Washington University, defended the financial education effort:

“Studies show that Americans who are not financially literate are less likely to participate in financial markets or to invest wisely. They are less likely to save and plan for the future. At the same time, they are more likely to rely on high-cost methods of borrowing. This is a serious problem. Remedying it is difficult, but adding financial literacy to the curriculum in schools would be a good start.”

She cited four reasons to push on:

• Young people with poor financial knowledge are unlikely to learn from their parents, other adults, or peers. Only a small fraction of students currently have access to adults and peers who are financially literate.
• Women, African Americans, Hispanics, and individuals with low educational opportunities have the poorest levels of financial literacy, putting them at even greater disadvantage. Only through school-based programs will this change.
• Financial skills are necessary for navigating today’s complex world. This is so evident that the Organization for Economic Co-operation and Development (OECD) last year added financial literacy to the topics it evaluates in its Program for International Student Assessment. Financial knowledge now joins mathematics, science, and reading in those tests administered to 15-year-olds around the world.
• Young people need to understand how to make wise financial decisions before—not after—they are faced with life-changing decisions. Most notable among those decisions is whether or not to invest in higher education.

The payoff will come, she says:

“Where you have well-informed consumers, you will find vigorous competition and efficient markets. In other words, financial literacy is not only good for Americans because it allows them full participation in society, but financial literacy is also essential for business, the economy, the country and, in this age of globalization, the world.”

What remains is to find the right delivery system—and to hold off the critics until we can start showing results.

What the Rest of the World is Like for Women

During the 1995 Fourth World Conference on Women in Beijing, more than 100 countries expressed their commitment “to advance the goals of equality, development and peace for all women everywhere in the interest of humanity.” Since then, the United Nations has been tracking the plight of women, at times demanding international attention. To make the problems clearer, it helps to express them as a chart — as the Guardian did last June — or as a list of the worst places in the world for women, as the Independent did in March, as part of an investigation in tandem with the 101st International Women’s Day.

But one of the most complete pictures of the plight of women worldwide emerged earlier this week. Valerie M. Hudson, a Texas A&M University professor, analyzed information from the WomenStats Project and mapped the data in cooperation with Foreign Policy. Exploring nine factors, including physical security, maternal mortality, government participation and educational disparity, the data visualization corroborates aforementioned findings from the Independent and the Guardian: that Afghanistan is among the worst countries in the world for women, where 87% are illiterate, more than 70% face forced marriages and expectant mothers have a 1 in 11 chance of dying during childbirth. There are other areas of concern as well: For example, central and southern Africa appear to have more than a 20%  difference in male and female secondary education level. Maternal mortality levels are also shockingly high in the region, with approximately 75% of the continent reporting more than 300 maternal deaths per 100,000 births.

According to additional statistics from the United Nation’s latest World’s Women publication, women are also legally disadvantaged in accessing land ownership, inheritance and other forms of property in 45 out of the 48 African countries reviewed and in 25 out of the 42 reviewed in Asia. Though the continent is home to the most dismal numbers overall, one problem that did not surface in Africa, is that of sex ratio and son preference in children. According to the research, Africa had normal sex ratios, while India, China and Vietnam had “extremely abnormal sex ratios favoring males.”

One of the most striking findings, was that of sex trafficking. According to Foreign Policy‘s map, it appears that nearly 75% of the world has lax trafficking laws. Almost all of Latin America, Africa, the Middle East and Asia fall into one of three categories: “Trafficking is illegal but still practiced,” “Trafficking is limitedly illegal but is still practiced,” or “Trafficking is not illegal and is commonly practiced.”

Circumstances seem dire when looking at Foreign Policy‘s map, and they should. According to the United Nation’s review of 33 countries with available statistics, the proportion of women who will be exposed to physical violence in their lifetime ranges from 12% in Hong Kong to 59% in Zambia. In a related survey, the U.N. found that nearly one-third of women worldwide agreed that being hit by a husband in an argument is justifiable, and in Mali, 74% of women say they believe it’s acceptable to be punished for refusing sex.

On the upside, the U.N. has reported some bright spots in the last 20 years: Female genital mutilation is decreasing slightly among younger generations, literacy among adult women and men around the world has improved, albeit slowly, and enrollment of girls in schools is increasing across the world.

Learning From Mistakes Is Harder Than We Think

“Often mistaken, never in doubt.” That wry phrase describes us all more than we’d like to admit. The psychological study of misconceptions shows that all of us possess many beliefs that are flawed or flat-out wrong — and also that we cling to these fallacies with remarkable tenacity. As a result, just hearing the correct explanation isn’t enough. Most methods of instruction and training assume that if you provide people with the right information, it will replace any mistaken information listeners may already possess. But especially when our previous beliefs (even though faulty) have proved useful to us, and when they appear to be confirmed by everyday experience, we are reluctant to let them go.

Donna Alvermann, a language and literacy researcher at the University of Georgia, notes that in study after study, “students ignored correct textual information when it conflicted with their previously held concepts. On measures of free recall and recognition, the students consistently let their incorrect prior knowledge override incoming correct information.”

It’s what our mothers called “in one ear and out the other.” We have to actively disabuse ourselves or others of erroneous conceptions, and research from cognitive science and psychology points the way. Although much of this research concerns misguided notions of how the physical world works, the techniques it has produced can be used to correct any sort of deficient understanding. Here, three ways to make that new information push out the old:

Highlight the mistaken notion. The simplest way to correct mistaken notions is to point them out as the accurate information is being presented. In a 2010 article in the International Journal of Science and Mathematics Education, researcher Christine Tippett offers an example from a science book for children: “Some people believe that a camel stores water in its hump. They think that the hump gets smaller as the camel uses up water. But this idea is not true. The hump stores fat and grows smaller only if the camel has not eaten for a long time. A camel can also live for days without water because water is produced as the fat in its hump is used up.” Note the three-part structure: the misapprehension is described, declared false and replaced by an accurate version. Although such “refutation text” is very effective in debunking misconceptions, Tippett notes, it’s rarely used in informational books for children or in textbooks for older learners.

Issue an advance alert. For more deeply embedded beliefs that resist simple clarification, teachers, managers and other leaders can ask people to “activate” these prior beliefs, then instruct them to elaborate ways in which the correct explanation differs from their current conviction. For example, Alvermann and a co-author conducted an experiment in which students in an introductory physics class were asked to draw, and then explain, the path a marble would take if shot from a tabletop. The investigators’ instructions contained this advice: “If you thought that the path the marble would take would be straight down, straight out and then straight down, or straight out and then curved down, your ideas may be different from what the laws of physics would suggest. As you read the following text, be sure to pay attention to those ideas presented that may be different from your own.” The students who were “forewarned” with these instructions, the authors note, “showed marked improvement in learning information that conflicted with their existing knowledge.”

Create a confrontation. For the most tenaciously held beliefs, it may be necessary to stage an intervention. In a 2002 article in the American Journal of Physics, researchers from the University of Washington note that “students often finish a standard introductory course or an advanced undergraduate course on relativity with some fundamentally incorrect beliefs.” It’s frequently not enough for instructors to point out the discrepancy between learners’ convictions and the way things actually work, they note; learners have to perceive this discrepancy themselves, at which point they’ll be motivated to resolve it. The Washington researchers designed tutorials in which students were led to confront the fact that they held two mutually exclusive ideas, one mistaken and one correct (in this case, about the concept of time in special relativity). The students then were helped to discard naive beliefs and fully embrace scientific ones. The key is creating an uncomfortable sense of cognitive dissonance; only then are we willing to trade our private versions of reality for something that looks more like the real world.

Two Saudi Arabian Heros at the Olympics: Workplace battles continue

AS many of you know, I smply think that any type of conduct that does not allow for a women's voice and wisdom to be heard is plain stupid. That is why I think these women are heros.  Take a look:

Two Saudi women made Olympic history at the London Games, becoming the first female athletes from that country to participate. Back in Saudi Arabia, though, the sports ministry effectively bans girls and women from practicing sports. The government refused to approve a privately organized women’s Ramadan sporting competition, although organizers said that women participants would be modestly dressed, have their male guardians’ approval, and not mix with men – conditions the Saudi National Olympic Committee imposed for female participation in the Olympics.

Meanwhile, another battle over women’s rights has attracted little outside attention: The push to get women into the workforce, which religious conservatives are fiercely resisting. With four new Labor Ministry decrees in July, the number of jobs open to women has slowly increased, at least in theory. However, these decrees also gave conservatives a victory by reaffirming that strict sex segregation, loosened in 2005, applies to the workplace.

Saudi Arabia’s version of gender equality in Islam boils down to “different, but equal.” Women and men are  considered equal in the sum of their rights and duties, but according to a 2003 treatise by the Saudi religious scholar Dr. Rabee al-Madkhali, God endowed men and women with different rights and duties, men’s “appropriate to their manhood and their strengths and their minds and their willingness to face the dangers,” and women’s according to “what befits their femininity and vulnerability and lacking compared to men in mind, strength and vulnerability in the willingness to face the dangers and hardships.” Whereas men have a duty to provide for women, women in turn must obey their male guardians and care for house and children.

A working woman with her own income challenges that understanding of gender relations.

In the late 1990s, the Council of Senior Religious Scholars, the highest religious authority in the country, said that a woman’s place was at home, and that she should only leave the house in case of necessity.

Some things have changed since then. Women are allowed to own and operate businesses; they have even managed to do away with the male legal proxy that government offices required for female-owned businesses to handle all official interactions. Women have both been elected and appointed to the Jeddah and Dammam chambers of commerce. Since 2008, women no longer need a male guardian to stay alone in hotels.

Since assuming the throne in 2005, King Abdullah has pushed successive labor ministers to get women into the workforce, with some limited success. More than 60 percent of the kingdom’s university students are women, and since 2006, some universities have allowed women to study law. However, a plan proposed in 2009 to allow women to practice law has still not been put into effect.

Saudi women’s participation in the labor force has tripled, to close to 15 percent, over the past two decades, but is still among the lowest in the region. While most Saudi women with jobs work as teachers and in the health profession, the battle over increasing the female workforce actually began with lingerie. Conservatives opposed the king’s plan to replace foreign male sales clerks in lingerie stores with Saudi women. But in July 2011, Labor Minister Adel al-Faqih issued a decree requiring that lingerie stores be staffed only by Saudi women.

Under the decree, the shops could serve only women or families. If the shop is for women only, its windows must be covered; if serving families, they must be open.

This decree, and another issued at the same time that regulates women’s work in factories, contained an innocuous-sounding but revolutionary phrase: “Employing women in these shops does not require the permission of the Labor Ministry or any other party.” Labor officials told the media in May that this meant that women no longer required their male guardians’ approval to work.

Under the Saudi system of male guardianship, the guardians – a woman’s husband, father, brother, or even minor son – have power over their female relatives of all ages, approving or declining their travel, work, marriages, official business, or health care, almost at will.

The conservatives’ line of attack against these liberalizing measures was not about preserving guardianship power, however, but about preventing gender mixing. Muhammad al-‘Arifi, a prominent conservative cleric, warned that women shouldn’t work in places where they could mix with men, sometimes considered a crime in Saudi Arabia, where strict sex segregation still applies in most places.

Some supermarkets, like the Panda chain, had begun to employ female cashiers but were then forced to let them go under pressure from conservative clerics. Now a government agency has joined the opposition to women working. The July 2011 decrees give the Labor Ministry jurisdiction over all matters involving women’s employment. However, the Commission for the Promotion of Virtue and Prevention of Vice, the government morality watchdog with police powers, in June 2012 summoned a Mecca-based supermarket manager to upbraid him for employing female cashiers. The manager immediately fired the women, who had worked for less than a month.

In May, Saudi Arabia’s administrative court, the Board of Grievances, struck down the decree requiring lingerie stores to have women as clerks, on the basis that  serving of both men and women customers violated Islamic legal strictures on sex segregation.

In response, the Labor Ministry on July 18 issued four new decrees, in part to “correct some mistakes” in the application of the initial decrees that were seen as potentially leading to gender mixing. These new decrees, which apply to women’s work in clothing stores, amusement parks, food preparation, and as cashiers more explicitly spell out the business’s obligation to prevent the “mixing” of the sexes and the “prohibition of seclusion between the sexes,” referring to men and women being alone in a closed room. The decrees stipulate that women must have their own work area and rest rooms and may not interact with men, unless the men are part of their larger family group. If the enterprise also employs men, a minimum of three women must be hired.

A change in the labor law in 2005 removed strict gender segregation provisions, requiring only the more vague “compl[iance] with the dictates of Islamic law,” which leaves some room for interpretations about the exact nature of a woman’s work environment. The 2012 decrees are a step back in that they spell out and reinforce strict gender segregation in the workplace. However, this victory for conservatives has been offset by an increase in jobs now open to women.

These are baby steps, but important ones. Women’s unemployment is almost four times as high as men’s, according to government statistics. Close to 80 percent of unemployed women are university graduates, a 2010 study by Booz and Company, a global consultancy, found. The Saudi leadership is testing the waters, but the list of prohibited professions for women, from mining to construction, work in tanneries or electricity production or car repair shops, remains long.

But even with the government, religious and social hurdles, women are increasingly braving opprobrium to seek meaningful work, which is destined to challenge and perhaps ultimately undermine Saudi Arabia’s “different, but equal” façade.

Why Gen Y Loves Restaurants – And Restaurants Love Them Even More

In lieu of the big financial summit with my 'Hubby', I think I am going to have one last 'big, elaborate dinner' before the budget tightening begins!

We’ve all heard that young people in America today are very likely to have loads of student loan debt, relatively little cash to spend, and roommates they know as “Mom” and “Dad.” Interestingly, despite their strapped financial situations, millennials are also more likely than other generations to dine out at upscale restaurants on a regular basis.


According to a new report from the research firm Technomic, 42% of millennials say they visit “upscale casual-dining restaurants” at least once a month. That’s a higher percentage than Gen X (33%) and Baby Boomers (24%) who go to such restaurants once or more monthly, despite the fact that older generations earn more than Gen Y, by and large. Then again, members of Gen Y probably don’t have as many expenses as their older counterparts, who are more likely to have mortgages, multiple car payments, young children, and perhaps older children who have moved back in with them after college or a layoff. Older people have also obviously had more time (and reason) in life to learn how to cook.

The data gibes with the eye-opening New York magazine’s feature published earlier this year about the rise of foodie culture among the young, in particularly among the hipster youth in Brooklyn. The story’s headline – “When Did Young People Start Spending 25% of Their Paychecks on Pickled Lamb’s Tongues?” – pretty much says it all.

Previous studies have shown that millennials are more likely to make impulse buys on little splurges for themselves, and going out to eat at a nice restaurant would seem to fit in the category.

Nonetheless, millennials aren’t necessarily spendthrifts when it comes to dining out. As a group, Gen Y is the most likely to be drawn to deals, with 43% saying they are influenced by coupons and discounts when choosing where to eat. They also seem to prefer combo meals more than older groups.

Of course, if saving money was truly the main concern among millennials, they’d be better off staying home and learning to cook. (Having one’s own kitchen would help.) The preference for combo meals is noteworthy too, for their popularity is waning as customers realize fast-food dollar menus are better deals.

It seems as if part of the reason Gen Y is so comfortable heading out to restaurants regularly is that they’re more optimistic than most about their finances. Half of millennials expect their personal financial situation to get better in the coming year, compared to just 38% overall. Perhaps, though, Gen Y’s “optimism” is rooted in the idea that, considering how bad things have been for them in terms of the jobs market and the economy overall, they’re bound to get better.

In any event, if you’re confident your finances will improve in the near future, that’s something worth celebrating—perhaps over a meal at a nice restaurant with friends?

Why Gadgets Are Great for Introverts

The more I look at our home life, the more I realize me and the hubby, along with the kids, have become so reliant on technology that in perhaps many ways, we are missing out on the beauty of simplicity and the 'now' moment.

So I have decided to do something about it.

Why?

Consider this:

Before I go further I know my children are going to hate me for this! To bad!

A husband and wife sit companionably over bowls of cereal, heads bent not toward each other but to their smartphone screens.

Three teenaged girls in sundresses gather in a friend’s living room, silently typing missives into their respective gadgets.

A businessman attends a meeting but fiddles with his smartphone under the boardroom table.

These are the images of disconnection presented by Sherry Turkle, the MIT professor and author of Alone Together: Why We Expect More From Technology and Less From Each Other, in her widely viewed TED talk. Turkle argues, as many now do, that wireless communication is a poor substitute for social interaction and human connection. She’s right, of course; we’ve all felt the power of a pinging smartphone to pull us away from conversations with a supermarket cashier, a colleague, our spouses and children.

But our online gadgets have arguably enhanced the social lives of one large swath of the population: the introvert.

Introverts are often brimming with thoughts and care deeply for their friends, family and colleagues. But even the most socially skilled introverts (of whom there are many) sometimes long for a free pass from socializing en masse or talking on the phone. This is what the Internet offers: the chance to connect — but in measured doses and from behind a screen.

When I was researching my book, QUIET, I noticed that many of the introverted academics I corresponded with were much warmer via e-mail than when we finally met in real life. The keyboard and screen allowed them to express their caring and friendly natures.

Similarly, when you’re blogging or tweeting, you don’t have to wade through small talk before you get to main point. You have time to think before you speak. You can connect, one mind with another, freed from the distractions of social cues and pleasantries — just the way readers and writers have done for centuries.

And you can do all this from the quiet of your own home. “Sitting at home in the dark, on Google+, with my 1.6 million followers … is perfect for me,” Guy Kawasaki, the seemingly sociable entrepreneur, founder of alltop.com, and self-described introvert, told the crowd at a tech conference earlier this year. “Social media allows me to pick my times for social interaction.” (As of this writing, Kawasaki has over 2.6 million Google+ followers.)

Of course, not all introverts see the Internet as a godsend, and not all forms of social media are alike. Some introverts have told me they prefer Twitter to Facebook, for example, because it emphasizes the exchange of information over chatter and photo-sharing; a 2010 study published in Computers and Human Behavior suggests that users of some social media sites have become increasingly extroverted as online anonymity decreases.

Still, a distinct breed has emerged: call it the “offline introvert/online extrovert.” That’s how Mack Collier, a social media strategist, describes himself on his Facebook page, and there are many others just like him. Chris Guillebeau, the author of the popular blog The Art of Non-Conformity, calls himself an introvert, and so does Lisa Petrilli, a leadership strategist who co-hosted a “Leadership Chat” with fellow introvert Steven Woodruff on Twitter every Tuesday evening for almost two years. One of their topics? The power of the introvert in cyberspace.

A wired world can be alienating, but its great virtue has always been democratization. When we bathe in the blue light of our gadgets, we’re doing many things: surfing, working, gaming and, yes, tuning out the world. But we’re also hearing ideas from people whose voices might not have carried in the pre-wired era, who might not have broken through the chatter. One of the most unremarked advances of the online revolution is that we now hear loudly from the quieter half of the population.