Walking the Path: Utilizing Behavioral Finance to Strengthen ...

Walking the Path: Utilizing Behavioral Finance to Strengthen ...

Walking the Path: Utilizing Behavioral Finance to Strengthen Your Financial Education Outcomes Todays Speakers Tracy Austin Director of Professional Development & Quality Coaching, Franklin University - MBA, MS, RCC @coachtracya Carissa Uhlman Vice President of Student Success, Inceptia 2015 Inceptia @CarissaUhlman 2

The Brain and Money Session Overview Behavioral Finance & Financial Literacy Instructional Strategies Action Plan Case Study 2015 Inceptia 3 The Brain and Money 2015 Inceptia 4

Why Emotions Matter Why do we make uninformed decisions? Behavioral finance theories 2015 Inceptia 3 5 Inherent Irrationality 2015 Inceptia 6 How Is The Brain Organized? Limbic system Reptilian brain Fight or flight!- scans environments Emotional relationship to thoughts, objects, people & events Amygdala

Emotional center of the brain Hypersensitive Prefrontal cortex Makes decisions and solves problems Chemicals (dopamine and cortisol etc.) 2015 Inceptia 4 7 The Lazy Brain & Threats Lazy brain Oxygen Glucose Needed to make decisions 2015 Inceptia 4 8

The Lazy Brain & Threats Threats Limbic brain takes over Prefrontal cortex excluded and unable to make a reasonable decision 2015 Inceptia 4 9 Behavioral Finance & Financial Literacy 2015 Inceptia 10 Your HBDI Assessment Check the 15 descriptors derived from Ned Herrmanns book, The Creative Brain, that you think are most like you.

__ Administrative __ Harmonizer __ Analyzer __ Humanistic __ Charitable __ Implementer __ Protective __ Quantitative __ Rational __ Collaborative __ Impulsive __ Risk taker

__ Conservative __ Innovator __ Spiritual __ Consistent __ Integrative __ Detailed __ Intuitive (people) __ Emotional __ Logical __ Sympathetic __ Evaluative

__ Musical __ Synthesizer __ Experimental __ Organized __ Statistical __ Strategic __ Technical __ Expressive __ Planner __ Theoretical __ Factual __ Playful

__ Visionary __ Financial __ Problem Solver __ Visual __ Procedural 2015 Inceptia 2010 Herrmann International 11 Scoring For each descriptor that you checked, count the total number of A, B, C, and D _B_ Administrative _C_ Harmonizer

_A_ Analyzer _C_ Humanistic _C_ Charitable _B_ Implementer _B_ Protective _A_ Quantitative _A_ Rational _C_ Collaborative _D_ Impulsive _D_ Risk taker _B_ Conservative _D_ Innovator

_C_ Spiritual _B_ Consistent _D_ Integrative _B_ Detailed _C_ Intuitive (people) _C_ Emotional _A_ Logical _C_ Sympathetic _B_ Evaluative _C_ Musical _D_ Synthesizer

_D_ Experimental _B_ Organized _A_ Statistical _D_ Strategic _A_ Technical _C_ Expressive _B_ Planner _A_ Theoretical _A_ Factual _D_ Playful _D_ Visionary

_A_ Financial _A_ Problem Solver _D_ Visual _B_ Procedural TOTAL As______ 2015 Inceptia TOTAL Bs _____ TOTAL Cs _____ TOTAL Ds _____ 2010 Herrmann International 12 Thinking Preference Diagram A D 10

STRONG PREFERENCE10 MODERATE 3 3 6 6 0 3 6 WEAK 3 6 10 10

B 2015 Inceptia C 2010 Herrmann International 13 Herrmann Brain Dominance Instrument (HBDI) Thinking Style Preferences 2015 Inceptia 14 2010 Herrmann International Money Decisions & The Brain A D 10

STRONG PREFERENCE 10 X MODERATE 6 3 3 6 X 6 X 6 3

0 WEAK 3 10 10 B 2015 Inceptia C 2010 Herrmann International 15 Money Decisions & The Brain A D 10 STRONG PREFERENCE

MODERATE 6 3 3 6 6 0 WEAK 3 3 6 10 10 B 2015 Inceptia 10

C 2010 Herrmann International 16 Money Philosophy by Thinking Style A The Dollar Defender Logical Analyzer Calculating Problem solver Handles money well; guided by a sense of overall purpose and direction B The Easy Breezy Spender Imaginative

Spur-of-the-Moment Big-Picture Innovator D Considers money a means to an end. Leaves financial details to others. The Eye on the Prize Planner Controlled Conservative Planner Organized The People Pleasing Patron Feeling Caring Emotional Personal

Values money; knows where every penny is, was, and will be. Handles money erratically & with difficulty; impulsive & undisciplined. C 2015 Inceptia 2010 Herrmann International 17 Retrain Your Brain Strategies Mindfulness Sleep on it or take a walk Get a second opinion 2015 Inceptia

8 18 Retrain Your Brain (cont) Label emotions & reframe them What happened? What did you say? How did you feel? What did you do? Is what you are saying true? Are your responses helping you or hurting you? New perception or thinking

2015 Inceptia 8 19 Implications for Financial Literacy Programs A-ha moment Context before knowledge Why before how Internally empowering Mindful education = STICKY LEARNING 2015 Inceptia 9 20

Instructional Strategies 2015 Inceptia 21 Instructional Design Joel Gardner Program Chair, Franklin University Instructional Design Consultant [email protected] 2015 Inceptia 22 Instructional Design Model Merrills First Principles of Instruction Integration Activation Problem/Task

Centered Application 2015 Inceptia Demonstration 23 Activation Learners recall, describe, or demonstrate prior knowledge Provide an organizing structure for knowledge Use a metaphor 2015 Inceptia

How to Finance Your Education Do you currently have a plan to pay for college? Heres a 5 step plan to prepare for paying for college. You wouldnt buy a car without knowing how much it costs/how youre going to pay. 24 Demonstration Teach the generality Process Information Parts Consequences Share specific examples Real-world,

relevant examples Use variety 2015 Inceptia What does that 5 step process look like? Lets walk through it. Heres how Joe calculated the costs of his 2 year degree. Here are the tools Sasha used to help her plan her finances. 25 Application Practice recall and understanding of general knowledge

Process Information Parts Consequences Practice application of knowledge Real-world, relevant examples Use a variety Provide Feedback! 2015 Inceptia Reiterate the 5 step plan.

Pick a school/use current school around which to complete the plan. Pair up and take your classmate through the plan. 26 Integration Students reflect on, discuss or defend knowledge Students plan to use knowledge Students overpractice their new skills 2015 Inceptia How does this exercise influence your choices/actions? How can you adapt this 5 step process to finance a computer?

A car? A home? 27 Instructional Design In Practice Task-centered Activation Demonstration Application Integration 2015 Inceptia Learning is promoted when instruction is in the context of whole real-world tasks. Learning is promoted when learners activate relevant cognitive structures by being directed to recall, describe or demonstrate relevant prior knowledge or experience. Learning is promoted when learners observe a demonstration of the skills to be learned that is consistent with the type of content being taught.

Learning is promoted when learners engage in application of their newly acquired knowledge or skill that is consistent with the type of content being taught. Learning is promoted when learners integrate their new knowledge into their everyday life by being directed to reflecton, discuss, or defend their new knowledge or skill. 28 Action Plan Case Study 2015 Inceptia 29 Action Plan Elijah Herr, MSc Assistant Financial Aid Director, Portland Community College [email protected] Michele Cruse TRiO Program Director [email protected] 2015 Inceptia

30 Action Plan "Financial Literacy as a Student Service 2015 Inceptia 31 QUESTIONS? 32 References Herrmann, N. (1989). The Creative Brain. Lake Lure, N.C: Brain Books. Merrill, M. D. (2002). First principles of instruction. Educational Technology Research and Development, 50(3), 43-59. Merrill, M. D. (2007). First principles of instruction: a synthesis. In R. A. Reiser & J. V. Dempsey (Eds.), Trends and Issues in Instructional Design and Technology, 2nd Edition (Vol. 2, pp. 62-71). Upper Saddle River, NJ: Merrill/Prentice Hall.

Gardner, J. (2010). Applying Merrill's first principles of instruction: Practical methods based on a review of the literature. Educational Technology Magazine, 50(2), pp. 20-25. Gardner, J., (2011). How award-winning professors in higher education use Merrills first principles of instruction. International Journal of Instructional Technology and Distance Learning, 8(5), p. 3-16 2015 Inceptia 33

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