#savings: Can Social Media Nudge Teens into Smarter Money Choices?

In the fall of 2008, Ted Gonder was studying economics at the University of Chicago as the world economy melted down around him.

“We were learning about the collapse in this ivory tower, theoretical, Wall Street Journal context,” Gonder recalled. “But a few blocks from campus was one of the hardest hit inner-city neighborhoods—a bank desert with one of the highest foreclosure rates in the country.”

The juxtaposition led Gonder and some classmates to start a financial education program for high school students in schools in low-income communities. Now a nonprofit called Moneythink, it has with 30 university chapters in 10 states, Moneythink takes a blended learning approach, by mixing personalized mentoring with the power of social media.

With Gonder as CEO, Moneythink starts with committed college mentors who meet weekly with small “teams” of juniors and seniors in local high schools to talk about mindful spending, goal-directed saving, and the smart use of credit cards and other financial products. And, since 2014, the nonprofit has been piloting an app called Moneythink Mobile, to push these lessons beyond classroom walls, track their impact, and use “likes” and other social nudges to encourage better real-world money habits.

Typically, several mentors split a class so each works with no more than five students. Before the groups talk money, they just talk — discussing the personal interests and goals that ground Moneythink’s spending and saving exercises.

Each classroom lesson is paired with a financial challenge on Moneythink Mobile, an Instagram-like platform on which students compete between weekly meetings with their mentors. In the “Snaptrack” challenge, for example, students post savings moments—a photo of a packed lunch, the pricey shoes they decided not to buy, or the coupon they used at the grocery store—captioned with a description, a dollar amount and #savings.

Every post earns students points that position them in the app’s “leader board.” Over the course of the pilot, however, Moneythink Mobile’s developers have learned not to push gamification too far.

“A lot of our students are dealing with some very real financial situations. Sometimes, they’re the ones buying the family groceries. They’ve seen parents lose jobs and even lose homes,” said Kelly Carlquist, an analyst at Goldman Sachs who was president of Moneythink’s Northwestern University chapter until she graduated in 2014 and now chairs its young professional’s board. “We don’t want to turn this into too much of a game, which would cannibalize our efforts to bring this into a real-life context.”

Besides, more than points, students seem to crave the little bursts of digital attention and applause that their posts generate. They spice their comments with emoji ranging from a simple thumbs-up of approval to a ninja indicating special savings skills to a smug blue face that looks decidedly unimpressed.

“It helps students think about their purchasing behavior through the lens of delaying gratification by not spending, but getting some likes and comments as instant gratification for doing that,” said Gonder.

To prime the social pump, the app’s developers recently added an “explore” function so that users at one high school can scan and comment on spending and saving posts from around the country. Students need a code to access the app, and mentors monitor posts to quash insults and the sharing of sensitive information such as a legible photo of a new debit card.

Brittany Bui (left) and AJ Wheatley, co-presidents of the Moneythink chapter at Chapman University in Orange, California, at last year's freshman activity fair. (Courtesy of Kara Zucker)

So far, about 4,600 students have used Moneythink Mobile, including more than 1,000 in the fall of 2015, collectively posting several thousand dollars in savings. Obviously, mentors can’t verify the figures, nor do they typically add up the dollars students claim to have saved. That’s of secondary importance, according to Brittany Bui, a senior finance major and co-president of the Moneythink chapter at Chapman University in Orange, California. The Chapman mentors work with students at Orange High School, where nearly three quarters of the students qualify for free or reduced-price lunch.

“It’s not so much the specifics of the post itself,” said Bui. “It’s getting into the habit of thinking about what they’re buying. Are they saving, or not? Having them take pics and post makes them more mindful spenders.”

With that said, the numbers aren’t completely irrelevant.

“One of my students posted a pic of the coffee her mom made at home that she started drinking instead of making daily runs to Starbucks,” Bui recalled. “We talked about it in class, and three of the girls in my group were drinking Frappuccinos.”

They did the math. Saving just $3 a day by opting for home-brewed coffee over Starbucks for one year adds up to more than $1000.

The Moneythink curriculum encourages students to think of money as a tool to express their values. If travel is more important to you than tasty coffee treats, for example, then the smart choice is to skip the Frappuccinos and use the thousand bucks on a trip. Another Moneythink Mobile challenge called “Follow the Money” spurs these values discussions by asking students to rate each other’s spending posts as a “good spend,“ or a “bad spend.”

Other challenges include “Tap to Save” focused on racking up small savings toward a specific goal, and “Sage Selfie” in which students post a pic of a friend or family member who offered advice about financial products such as checking accounts and credit cards, captioned with the advice received.

The volume of posts and interactions reflect the strength of the mentor-student relationship, according to Moneythink’s product manager Nathan Ranney.

“It drives engagement when mentors really get to know their students, help them set relevant goals and comment on their posts,” said Ranney. “It lets students know that there’s really somebody on the other end of this thing who’s following me, thinking about me, and cares.”

In the future, Gonder hopes Moneythink Mobile will expand the nonprofit’s reach and deliver targeted financial education to places closer to meaningful money choices, such as youth employment agencies and college advisors. Also, because many students live in so-called “bank deserts” dominated by check-cashers and payday loan vendors, Moneythink is starting to talk with banks about how they might partner with the app, perhaps by linking to an account students could use without an adult cosigner.

Wherever the app goes, Gonder stresses that the technology will never take the place of strong mentoring relationships.

“Social media isn’t a fix in itself. It’s just a tool to enhance the human interactions,” he said. “In the next phase we want to crystallize the specific financial behaviors we want to see, to help students get out of the cash economy, save more regularly and meet their goals.”