‘Trust in their own judgement is something we cannot teach our students’

When I embarked on teaching financial literacy to undergraduate students, I believed the biggest problem I would face would be their conceptual understanding. Didactic issues such as budgeting, saving, risk and investment can be abstract to students new to formal finance education.

I soon discovered I was wrong. Knowledge was not the hindrance; confidence was.

Many students, in particular first-generation learners, understood the concepts pretty well. Their problem was making decisions. During in-class discussions, students would respond with: “I am not sure this is correct” or not participate at all. They were reluctant, and sought confirmation or advice about whether their answer was the right one, when presented with even the simplest financial situations. They saw risk, something they did not feel in academic problem-solving. So, they were unwilling to put what they knew into practice.

• How financial literacy empowers first-generation students
• Using role play to assess students’ decision-making skills
• Thinking in action: training students in decision-making

To ease the transition between judgement and answers, I reformatted some sessions to change the focus from outcomes to process.

I did not ask students to compute returns or find optimal decisions, but presented brief situations based on real life: deciding between job opportunities with different pay scales, whether to take a loan to attend school or how to divide scarce resources among personal and family demands. The regulations were purposely easy. There was no single solution. The students were asked to justify their choice and trade-offs they made. The evaluation was done on the basis of ideas and thought, not precision.

In the beginning, students were wary. However, with time, something changed. The discussions became more open as students realised that their decisions carried no consequences, beyond learning, within these classroom scenarios. Students started to reply to one another instead of needing the validation I had been giving them. Students who were generally quiet made some of the most thoughtful contributions. With the burden of being correct removed, they became more outspoken and critical.

What lowering the stakes in coursework taught me about teaching finance

These lessons transformed my teaching.

First, I learned that financial education is not all technical; it is also emotional. Students carry their feelings, family backgrounds and fears about money into the classroom. This aspect is something that should not be ignored in learning, even with the most effective content delivery.

Second, confidence in making decisions is acquired with experience, not conveyed through teaching. Structure can be taught through lectures, but trust in their own ability is built up when the students make multiple decisions, reflect and realise that doubt is a natural element of decision-making.

Third, the design of assessment is more important than we tend to think. Where students are only rewarded for accuracy, they default to safe responses. Students are more prepared to deal with complexity when assessment rewards judgement, reflection and justification.

After one session, a student said they realised they had been waiting for permission to make decisions. “Now I am more at ease relying on my arguments,” they said. 

This observation defined the change I wanted to make.

Ensuring transferability in learning

These exercises were not designed to create good investors or financial planners. They were intended to help students settle into ambiguity, something they will have to face many more times in their lives, when dealing with their personal finances, careers or leadership.

As a way of reinforcing this, I set a short reflection exercise at the end of each activity. Questions included: what influenced your decision? What information did you wish you had? Would you do anything differently the next time?

These thoughts redefined decision-making as a process, not a conclusion. A decision was not a challenge to intelligence but a learning process. With time, learners would be less interested in correcting their mistakes than in gaining knowledge about consequences.

Classroom practice implications

This experience influenced how I consider teaching not just finance but professional skills in general.

In order to transform students into individuals who are financially competent, career-prepared or leadership-minded, we have to provide them with classrooms in which they can exercise their decision-making skills and not merely show their knowledge. This needs learning environments that tolerate uncertainty, evaluation systems that reward reasoning and instruction strategies that recognise the emotional aspects of learning.

Trust in their own judgement is something we cannot teach our students. It is constructed course by course, decision by decision, discourse by discourse and reflection by reflection.

Manjari Sharma is an associate professor in the department of commerce and coordinator of immersion and exchange programmes in the Office of International Affairs at Christ (Deemed to be University), India.

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