What is a 'teachable moment’ and why it is magic to acquire financial education?
A ‘teachable moment’ is a unique instant in which the opportunity presents itself to teach something to someone else who has had their attention captured by that something. These valuable learning opportunities in financial education lend themselves to teaching people to take informed decisions.
It’s not something that can be planned. The teachable moment is rather a fleeting opportunity that crops up which people (parents, teachers, bank employees, company advisers…) should know how to identify and take advantage of to pass on valuable knowledge to someone else. In order to do so, you need to get off the track somewhat of what they are talking about, but if the concept that has thrown itself up spontaneously has captured the interest of the person you are teaching, it is worthwhile to dwell on it for a moment. These ideal moments happen at all hours because there is always something to explain or learn in the course of a day and financial education is no exception.
Teachable moments for children
Handling money is a skill that needs to be imbued in children otherwise they won’t acquire it on their own. A good financial education will allow them to take advantage of more opportunities and assure them of a peaceful future on the economic front.
Teachable moments arise from all sides when the family is together: at the moment of drawing up the monthly budget, of going shopping, giving them their allowance … These are the most opportune moments for children to learn, in a practical way, all the ins and outs of the family budget. For example: when a bill arrives at the house, parents should explain to their children what it is and how to plan to pay it on time, drawing on the money set aside for these types of outlays. This will heighten the awareness of children of all the expenses generated in day-to-day life and the importance of being able to meet them.
Teachable moments for customers
A study by JPMorgan Chase & Co produced for the Center for Financial Inclusion: ‘A Change in Behavior: Innovations in Financial Capability’, explores how to help bank customers in developed areas take decisions on their finances. According to the study, in the financial sector, every direct contact with a customer is a potential moment for learning. The study arrives at the conclusion that reaching consumers at the right moment is essential in effectively developing financial capability. The right moment is one on which a person is about to take an important financial decision or use a financial service”, the study explains. Information is more effective and is more likely to influence behavior when it is provided at the right time. A very clear example of these learning opportunities is when entrepreneurs come to ask for a loan for their business for the first time. This is the ideal opportunity to explain clearly to such customers the implications of this type of financial product and the strategies for meeting the repayment schedule without worries.
Teachable moments for everyone
Technology is developing to help clear up doubts, learn new concepts and create teachable moments on one’s own. Some companies in the sector have already have begun to distribute personalized and practical information for users on personal finance.
BBVA has already made available various tools that provide the necessary information and make the most out of learning moments such as Mi Jubilación, BBVA Valora and BBVA Baby Planner. These online platforms offer all the information required on managing retirement, taking decisions on housing and planning the arrival of a baby through calculation tools and direct and simple content. With these in hand, it is very easy to take advantage of teachable moments and provide others with practical advice and strategies for managing finances.