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Money Matters: The Case for Teaching Financial Literacy

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President Obama has made college readiness a major component of his education platform, but is "college readiness" only about being academically prepared? The "MetLife Survey of the American Teacher" recently found that more high school students worry about financing their education than about getting into college or being successful at college. And not long ago, administrators at California State University Fullerton stated that they lose more students to credit card debt than to academic failure.

The National Financial Educators Council defines financial literacy as "possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual's personal, family and global community goals." A Consumer Reports survey of 12-year-olds found that 28 percent didn’t understand that credit cards are a form of borrowing, 40 percent didn't know that banks charge interest on loans, and 34 percent didn't realize that you can't tell how good a product is by how much it's advertised.

And how would they know? Our schools ask students to multiply fractions, calculate the area of squares, and pinpoint the main idea of passages of literature. These are all useful skills, but there’s an enormous elephant in the room: the need to address our country’s economic woes by improving citizens’ financial literacy. We cannot expect our students to become financially literate by meeting a few social studies standards or by completing a semester-long economics course. Unfortunately, policymakers do no seem to realize the importance of strengthening our students’ knowledge and skills in this area.

But we teachers can—and should—do more to weave financial literacy into our instruction and help safeguard our students’ futures. Consider these painless and inexpensive ways to incorporate financial literacy skills into lessons:

Encourage career exploration. As educators, we are fond of telling students that they can be whatever they want to be when they grow up—but we rarely provide in-depth information about careers and the duties, educational requirements, and compensation associated with them. Regardless of what you teach, you can include career exploration in your curriculum. A physical education teacher can explain what it means to be a personal trainer, coach, dietician, or a physical therapist—and what it takes to thrive in those professions. (And who better than a physical education teacher to present the statistics about the very small percentage of Americans who succeed as professional athletes?) Similarly, a language arts teacher can explain the role of an editor, and a math teacher can help students understand what accountants do and why they are important. We must remember that many of our students may not have been exposed to these possibilities (or how to realize them)—and we must begin introducing students to these ideas when they are young. Knowledge of careers is the foundation of financial literacy.

Take advantage of your stakeholders. As teachers, we cannot be experts in every area. We should not hesitate to seek help in introducing students to new careers and financial literacy concepts. Many parents, grandparents, and community members would be delighted to visit your class and share their knowledge—and businesses often encourage such activities. Typically, all you have to do is ask! Is there a parent at your school who is a financial planner? Would someone at the bank down the road be willing to come talk to your students about interest rates? A local realtor could visit and share his or her knowledge about buying a home.

Partner with Junior Achievement. Junior Achievement, according to its website, is "the world’s largest organization dedicated to educating students about workforce readiness, entrepreneurship, and financial literacy through experiential, hands-on programs." This program is provided free to K-12 students and involves little preparation on your part. Here’s how it works. Each week, a volunteer delivers an engaging hour-long lesson to your students, gearing the curriculum to their grade level. Typically, lessons mesh with social studies, math, and language arts standards and rely heavily on 21st-century skills. My own students have benefited from the well-prepared lessons as well as the opportunity to meet knowledgeable volunteers like the president of the local chamber of commerce and the human resources manager of a nearby hospital.

Draw on the resources of the National Council on Economic Education. For several years, my students have taken part in programs offered by the Florida Council on Economic Education. One of my students’ favorite programs is "Stock Market Simulation." Students in grades 4 through 12 work in teams to invest $100,000 in imaginary money in the stock market for a semester, competing against other students in their region. They learn a lot from this free online program and it is a great deal of fun! Another program offered by the FCEE is “Financial Freedom,” a workbook that reinforces standardized test skills while teaching students about managing cash, banking basics, job searching, consumer credit and debit, automobiles, automobile insurance, and finding a place to live.

Make relevant connections to your curriculum. Math teachers can engage students, meet standards, and teach essential financial literacy skills by creating problems based on grocery and department store catalogs and fliers. (This year, my students completed a project that culminated in a field trip to the neighborhood supermarket where they determined if they could afford to eat healthily on a budget.) Social studies teachers can compare the prices of salaries, food, and household goods from the 1920s to today’s prices, which provides an opportunity to discuss careers, inflation, and changes in society. Language arts teachers can teach critical reading skills by having students read and discuss news articles dealing with financial literacy. A science unit about natural disasters can incorporate information about the costs and benefits of having homeowners’ and automobile insurance. Once you’ve decided to make financial literacy an area of emphasis in your classroom, there are plenty of opportunities to weave it into lesson plans in creative, engaging ways that build other skills as well.

Success in school may ultimately mean little to a student who lacks the skills and knowledge necessary to manage his or her money. We can add to the value of our students’ learning by preparing them to prosper in the world beyond our classrooms.

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