Financial literacy brings value to K12 culture
As today’s students find themselves deciding money matters long before adulthood, progressive districts are introducing financial literacy lessons in elementary and middle gradesÑwith some requiring high school students to complete a personal finance program to graduate.
“We should not wait until senior year to introduce students to financial literacy,” says Susan Sharkey, director of the High School Financial Planning Program, which is a National Endowment for Financial Education (NEFE) program focused on basic personal finance skills.
“It could be integrated into other subjects earlier in their schooling and just be part of the culture,” she says. “If we are to succeed in preparing children to understand and manage their finances, we need to engage in frequent and thoughtful discussion both in the home and at school.”
Students of yesteryear first learned household budgeting in a high school home economics class. But Chicago Public Schools is one district that’s getting younger students to think about saving, spending and borrowing money.
“If you can get to financial literacy earlier and in a consistent fashion, you can connect better,” says Martin Moe, social science manager for the Chicago district. “Students might learn about earning income in third grade and then see it again in greater detail in fifth grade.”
Chicago now offers a guide to help K12 teachers integrate financial literacy lessons into their curriculum. The voluntary guide provides lesson plans and explains how educators can partner with banks and financial planners, or have students play a stock market game to practice new skills.
“We want financial literacy to connect naturally with other subjects,” Moe says. “If we’re doing a unit on the Great Depression, we could discuss how saving and investing choices affect society.”
The K12 guide came about once the district tweaked a high school personal finance course taken by juniors or seniors to satisfy a state consumer education mandate, Moe says. The one-semester course, which was developed with the Council for Economic Education, covers topics such as budgeting, installment purchasing and price comparison.
Five strategies to advance finance ed
Here are the Consumer Financial Protection Bureau’s five essential strategies for advancing financial education for young students:
Introduce key financial education concepts early and continue to build on that foundation consistently throughout the K12 school years. In addition, CFPB encourages states to make a standalone financial education course a graduation requirement for high school students.
Include personal financial management questions in standardized tests.
Provide innovative, hands-on learning opportunities throughout K12 so students can practice money management skills.
Create consistent training opportunities and incentives so teachers will add financial education to their classrooms.
Encourage parents and guardians to discuss money management topics at home. Provide families with the tools necessary to have money conversations with their children.
Source: Consumer Financial Protection Bureau Office of Financial Education Policy White Paper, April 2013
Pre- and post-course assessments indicate students are retaining the information and changing financial behaviors, Moe says.
“Students now choose to save for prom or college. Some started savings accounts or are using checking accounts now,” he says. “Once we saw that success and understood what our high school students needed to know, we mapped backwards to start teaching those skills earlier.”
“Money Matters on Campus”
A 2014 surveyÑin which 65,000 college students were asked about their financial attitudes, behaviors and knowledgeÑshows those who took a personal finance course in high school were more financially cautious, less fixated on possessions and more averse to incurring debt.
“However, the state of financial literacy among young adults in general does not appear to be improving,” says the “Money Matters on Campus” survey by Higher One and financial literacy curriculum provider EverFi.
The study recommends that the most effective K12 financial literacy programs be identified and used to develop best practices for states that mandate personal finance courses. It also recommends mandating financial literacy instruction in high school.
Seventeen states now require high school students to take a personal finance course, according to the Council for Economic Education’s 2014 Survey of the States. Forty-three states have adopted financial literacy standards, but they have not all mandated implementation. The council offers professional development and free resources that provide a framework for K12 financial literacy education that’s focused on decision-making skills such as planning and goal-setting.
In Oklahoma, students must earn a “Passport to Financial Literacy” to graduate. Districts can choose how to cover the 14 mandated topics, which include balancing a checkbook, identity theft and the financial consequences of gambling.
Oklahoma City Public Schools, the state’s largest school district, offers the personal financial literacy standards as part of a yearlong government course required for seniors.
California Department of Education list of K12 Financial Literacy Resources
Council for Economic Development’s Standards for Financial Literacy
Council for Economic Development’s 2014 Survey of the States
Discovery Education Streaming
EverFi Financial Literacy
FoolProof for High Schools
Money Matters on Campus
National Endowment for Financial Education’s High School Financial Planning Program
Oklahoma Council on Economic Education
Oklahoma State Department of Education
PNC Bank For Me, for You, for Later
Practical Money Skills for Life
Take Charge Today, formerly Family Economics and Financial Education at University of Arizona
TG Student Financial Education Program
“With our student mobility, the decision to place this in the 12th grade was very strategic and helps to ensure that the district’s 1,881 seniors earn their passports,” says Susan Staples, the district’s director of college and career readiness.
Some teachers use state-provided materials, lessons and activities, though an increasing number have turned to online courses from EverFi and FoolProof, both of which are sponsored by financial institutions.
Both offer self-paced, interactive programs with assessments. Teacher training is provided through the state Department of Education, Oklahoma Council for Economic Education or the school district. Representatives for the online courses say sponsors such as banks and credit unions help distribute programs to districts but do not influence lessons or learning materials.
Oklahoma City students also study financial literacy in younger grades, where they learn about income, saving money and earning interest. Older students can take advanced business classes in accounting and finance, Staples says.
She emphasizes the “personal” in personal finance, regardless of the student’s age or grade because they can understand that. “When you use a financial issue such as financing a car or paying for college to address a math skill, you can reach kids in a personal way, and they tend to listen more than if you present an abstract problem.”
Middle school approach
Although no district is using it yet, MIND Research Institute, which creates math instructional software, is using a $3.2 million gift from PwC Charitable Foundation to create game-based software designed to help children develop good habits and attitudes when dealing with money.
Students must know how to apply their math skills to real-life situations, says Nigel Nisbet, vice president of content creation for the institute. For example, if students see $100 shoes for sale, they might want to practice self-control and think how that purchase might affect their finances, he says.
One game will introduce students to different retail offersÑsuch as percentage off, quantity discount and future sale price. Students will determine which deal offers the best final price.
The new curriculum is geared toward sixth, seventh and eighth graders. It will include modules on saving, planning, credit, debit, and the costs and financial benefits of going to college. Students can learn, for example, what student loans and deferred payments will cost in the end. It will be available in the fall of 2016.
Some other programsÑsuch as TD Bank Wow!Zone and Discovery Education Streaming, which supplements existing curriculum and covers concepts such as finance, taxes and investmentÑoffer K12 financial literacy lessons aligned to state standards. And students can see the real-world implications of financial decisions by tallying the cost of groceries while shopping, for example, says Sharkey, of NEFE.
And a local fire or natural disaster could spark a conversation on risk management and insurance, she says. “Make it real for students,” Sharkey says. “Look at school fundraisersÑwhat’s the return on investment of selling candles versus having a bake sale.”
Financial literacy educators say the bottom line is simple: Reach students early and often. “So much of financial literacy is about making good choices,” says Moe, of Chicago Public Schools. “
Understanding how to use and manage money can open doors for students. It allows them opportunities such as buying a video game, attending college, buying a house or being independent. It empowers them.”
Regina Whitmer is a freelance writer in New Jersey.
Regina Whitmer is a freelance writer in New Jersey.