Lynda Moore says financial education works best when we tell stories people can relate to

Last week I talked about the stories we tell ourselves about money, and how we are all great novelists when we start to look at our results and the actions that we take to create them.

Financial literacy is always a hot topic.  The decision to start teaching children about money in schools is fantastic.  But as I have also mentioned, what about us grown-ups? We missed all the financial literacy training and have been bumbling along in the dark, not really knowing what we are doing, and writing these amazing money stories to explain it to ourselves

Let’s face it, money can be very overwhelming, the terminology alone can be confusing.  Compounding interest, inflation, investing, are we in a bull or bear market? That’s before we even start on interest rates and the OCR … it’s enough to make your brain want to switch off. I work with clients talking about money all the time, and even I think the way we talk about money can be way too serious (and a bit intimidating).

So when I came across a study from Stanford about teaching people finance through two-minute stories, I was instantly curious. What if understanding money could be as easy as reading a tiny story about someone buying a shirt or investing their wedding cash?

Spoiler alert: it totally can.

Here’s what happened. A team of researchers recruited over 2,200 adults aged 45 and up. These were regular people, not finance pros, they were given quick stories to read. Just two minutes each. No graphs. No jargon. No calculator required.

Each story explained a big money concept:

• Compound interest (aka how your money grows over time if you let it be and do its thing)
• Inflation (aka why your morning coffee used to be $3 and now somehow, it’s $7??)
• Risk diversification (aka why putting all your eggs, or dollars, in one basket isn’t ideal)

These weren’t dry textbook explanations. They were simple, everyday little stories. One was about a couple deciding what to do with a $5,000 wedding gift. Another was about a woman realizing how much more expensive her favourite plaid shirt had gotten over time. And one followed a couple deciding how to invest the money from selling their car.

After reading just one story, people actually understood the topic better. Not just a little, but significantly better.

What did this show? Storytelling is magical. We remember stories. We relate to them. Our brains like them way more than spreadsheets and lectures. I’m sure you still remember some of the stories your grandparents regaled you with as a youngster about the ‘good old days.’

This is where it gets interesting. The stories didn’t just work in the moment. When the researchers followed up eight months later, people still remembered what they’d learned, particularly the ones who read the investing and diversifying money stories.

The story about risk diversification had the biggest impact—people were 17–18% more likely to get the related questions right compared to those who didn’t read anything. The other stories helped too, just with slightly smaller boosts.

This made so much sense to me. I can’t tell you how often people say to me, “I feel like I should know this by now,” or “I’m just not good with money.”

Here’s my response: You’re not behind. You’ve just never been taught in a way that makes sense for you.

We know financial literacy is low across the board, it’s not because people don’t care, we just haven’t been taught it very well, and in a way that made sense and was approachable. That’s not your fault; that’s just the way it has been.

That’s why I love the idea of storytelling as a good way to learn; there are no big lectures. No shame or judgement. Just simple, real-life examples that get you thinking, “Ohhh, that’s what that means!”

I wish I could wave a magic wand and tell you that reading one cute story will fix your money situation (wouldn’t that be nice). Sadly, it won’t, but what it does do is plant a seed. It sparks awareness. It gets you thinking differently.  That’s where change begins.

Once you understand how something works, you can start making choices with more confidence. Even if they’re tiny ones at first. Tiny choices add up, in both a good and not so good way.

What can you do next? First, take the pressure off. You don't need to master every financial concept overnight. (Or ever, really.)

Then, start small. Read a story. Listen to a podcast. Watch a 60-second video. Ask a question you’ve been too embarrassed to ask.

Think about your own money story. What stories are you telling yourself, and if they aren’t working for you, find some new stories to replace them with.

This study reminded me why I do what I do. It’s not about making people experts, I’m still learning myself. It’s about helping people feel comfortable with their money, feeling less stress and anxiety, and replacing that with confidence and more clarity.

I know, the idea of learning about money can make your eyes glaze over, I totally get it. But maybe it’s not about learning more. Maybe it’s about learning differently.

And if all it takes is a two-minute story to help you understand something that used to feel confusing. That sounds like a pretty good deal to me.

Let’s keep talking about money. Let’s make it normal, human, and maybe even a little fun.

*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.