There’s More to Financial Capability than Information

Friends who graduated GTA together this spring.

Please join me in welcoming Tim St. Louis to the Game Theory Academy team. He will be leading our curriculum and partnership development efforts over the coming years, as Game Theory Academy grows to meet rising demand for our unique financial education approach. Tim recently received a PhD in Education Policy from the University of Wisconsin at Madison. His research focus? Read on to learn more about how Tim’s research dovetails with our organization’s mission. –Trish Johnson


The current conversation around college students and financial capability is incomplete: so much attention is being paid to outcomes (student loan burdens, credit card usage, etc.) and almost no attention is being paid to the causes and preconditions that create them. For my dissertation at the University of Wisconsin – Go Badgers! – I attempted to fill this gap by surveying over 500 first-year college students and conducting intensive follow-up interviews with over 30 survey completers. Of particular note is that the participant pool consisted of equal parts two-year and four-year students, whereas nearly all the studies on this topic cover only traditionally-aged, four-year students. The research focused less on what choices students made, and more on why they made these choices. More specifically, I examined three elements of personal finance – knowledge, attitudes, and social influences – and the role they play in students’ decision-making processes. The results provide an intriguing snapshot into students’ financial lives.

From the survey data, one noteworthy finding is that financial knowledge was not correlated with either keeping a personal budget or paying bills late; two possible explanations for this are that (A) the act of budgeting is not a matter of smarts but a matter of will, and (B) payment delinquency results from overwhelming life circumstances and not poor information.

Another interesting finding is that, when it comes to the members of one’s sphere of influence, friends and peers play a larger role than do parents or guardians; while students who witness either group conducting financial behaviors are more likely to conduct these behaviors themselves, the increase in likelihood is significantly higher for friendship observations. This suggests that personal networks matter, and that peer networks matter most.

The personal interviews also revealed several notable patterns of behavior. For example, the interviewees revealed surprisingly mixed feelings about student loans – in contrast to the mainstream narrative that loans are universally anathema to students. More specifically, most of the comments related to student loans were negative to some degree, but a nontrivial amount of comments mentioned ambivalent themes, such as loans being merely “the price of doing business” or serving as a “skin in the game” motivational factor. Another example stems from social spending, which is typically seen as socially isolating for LMI students on college campuses; while this notion was supported by the interview responses, several participants mentioned that being unable to spend much money also created an opportunity to build a campus community among their LMI classmates (“we all kinda had fun sitting around and figuring out ways to have fun without spending much”). Beyond these and other findings that contrast with previous research in this area, several other themes emerged that did align with prior work: the relentlessness of consumerism, the temptation of eating outside the home or the campus dining hall, and the prevalence of cognitive heuristics, among others.

My research has numerous implications for both Game Theory Academy and other stakeholders in youth development and financial capability. One significant implication is that, given the weak relationship between knowledge and behavior, traditional forms of financial education have been ineffective and are in need of overhaul; GTA has proudly been espousing this idea since its inception. Another implication is that, given the power of personal networks to influence financial behaviors, more investment is needed in financial education – not just technology solutions but bringing students together in community to learn from and influence each other in a supportive environment, like the one GTA provides.

Game Theory Academy fully supports the burgeoning call for more financial education and is developing tools that can be deployed in a variety of settings and to a variety of audiences. And finally, the sheer diversity of concepts that emerged from my research findings strongly suggests that personal finance is a complex and dynamic area; GTA’s approach reflects this reality and aligns with the field’s best practices. I am excited to join this effort and move the work forward, as the organization grows to serve more youth each year.