Financial education that's not like homework

Entertainment and learning combined in DVD series for youth.

Deanne Gage 22 October, 2013 | 9:27PM

Convincing kids to learn about money matters is no easy feat. With that in mind, Kevin Cochran and his partner Jay Seabrook created EnRICHed Academy, a six-week program available on six DVDs. It targets youth aged 10 to 23 and aims to teach the fundamentals of how money works in an entertaining way.

This year, Cochran appeared on the hit TV series Dragons' Den to snag funding to expand his kids program and he ultimately made a deal with Jim Treliving and Bruce Croxon. EnRICHed Academy has now sold 10,000 programs in Canada, and its co-founders have plans to expand the program to children under age 10.

Morningstar recently spoke with Cochran to get his take on how we can help educate kids about money in a way that resonates with them.

Q: Why can't most kids save money?

Cochran: Kids can't save money because their parents can't. The kids follow the parents' actions, not their words. We have to lead by example. Schools could do more but how much can we expect schools to do? Saving money requires accountability and that's more than any school can provide.

Q: Many programs, presentations and books are available for kids to learn about money. What does EnRICHed Academy bring to the table?

Cochran: We figured out a way to trigger an appetite for kids about how to save and invest. Most people go out and talk to kids the same way they would talk to themselves. That's not the way to do it. The kids are falling asleep. There's nothing more embarrassing than kids in the audience listening to a headset during a presentation. I know from experience.

 
Kevin Cochran (centre) with financial backers Bruce Croxon and Jim Treliving of Dragons' Den

But I learned, through developing this program, the reason why it's so hard to talk to a 15-year-old about debt. It's because they have no debt. They don't have credit cards; they don't have student loans. They don't care but all of a sudden when they are 19 or 20, they have that stuff and feel a bit of pain and they want to know more about it.

Kids watch these DVDs and learn everything from how to buy their first investment property to how credit cards work, how the stock market works and how to get into the stock market. The DVDs are three hours long and at the end of the day it's a simple message: spend less, save more and get a job. There's only so many ways you can say that.

Q: What do you know about debt that makes it relevant to the average kid?

Cochran: Within two years of finishing high school, I had over $20,000 of credit-card debt. I had creditors calling me. I got my first car on a credit card. I had no idea how credit worked; I thought 19% interest sounded better than 50%. I didn't know anything about interest rates.

Q: DVDs may be seen as outdated technology for kids. Why not use an app or have it available online?

Cochran: The whole program will be online soon but an app is not good enough. How do you stimulate an interest with an app? You have to sell to kids why they need to understand this information. And unfortunately, an app or book is not going to do that. There's no tone or body language to that conversation. An app just sits there and it's a very stagnant message to deliver to kids.

EnRICHed Academy features scenarios kids can relate to. Like let's say you work for me mopping floors for $100 per week. What will you do with the money? Most will say, "spend it."

Now, let's say you're the best mopper in town and are so good the competition is eyeballing your mopping skills. You work with me but I'm worried the competition is going to steal you away so I decide to pay you an extra $40 a week because you're so good at what you do. Now, guess what most students do with the extra $40? They spend it.

Most kids will say they don't make enough money to save. They'll just wait until they make more money. Well, I have just proved to them that making more money doesn't mean anything when it comes to saving. If you don't know how to save $40 out of $100, you won't save in the future.

There's no point talking about investment strategy without talking about saving money.

Q: You've sold 10,000 sets of DVDs. Are kids buying this?

Cochran: No, it's the parents buying it for the kids. It's interesting: I've been meeting with investment firms and you have wealthy parents who understand that saving is very important but they don't know how to communicate that to their kids. So they buy our program and a lot of them are paying their kids to watch the DVDs.

Q: Parents are bribing them?

Cochran: Some are, yes. Some have paid their kids $10 a DVD to watch it. The thinking is this: they'd rather pay them $60 to watch the entire program than have them come home with $4,000 in credit-card debt in their second year of university.

The funny thing is after the kids watch it, they love it. It's not like homework to them. And you know what the kids want to do after they get the $60? They want to save it or invest it.

About Author

Deanne Gage

Deanne Gage  Deanne Gage is a Toronto-based writer who has specialized in personal-finance issues since 1999. A recipient of several journalism awards, including one from the Investment Funds Institute of Canada, she is also a former editor of Advisor's Edge and Advisor.ca. She can be reached at deannegage@gmail.com.