Social Studies

When It Comes to Financial Literacy Curricula, Buyer Beware

By Jaclyn Zubrzycki — April 27, 2016 6 min read
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In March 2004, the U.S. Senate passed a resolution declaring April to be National Financial Literacy Month.

Sen. David Akaka, a Democrat from Hawaii, introduced the measure to his colleagues: “All of us know at least one person in our lives who has suffered the sometimes tragic and often unavoidable results of not knowing how to create and stick to a budget, not understanding the merits of maintaining good credit history, or not having the analytical skills to make decisions based on factors in the economy.”

Since then, personal finance courses and financial literacy requirements have become increasingly common. More states are requiring schools to teach financial literacy during the K-12 years than ever: 22 now require that a high school personal finance course be offered, compared to just one in 2008, according to the Council for Economic Education. There are hundreds of curricula purporting to teach students about budgets and finances.

But are students actually learning what they need to about the way money works in the world?

Anand Marri, an associate professor of social studies and education at Teachers College, Columbia University and Vice President at the Federal Reserve Bank of New York who has studied financial literacy and economics education, argues that while the focus on financial literacy is positive, students and teachers shouldn’t neglect big-picture economic concepts. Too many programs focus on memorizing formulas and definitions instead of introducing students to real-world dilemmas, he said.

And when it comes to picking a program to teach financial literacy, he said, “Caveat emptor": While there are literally hundreds of options, some seem aimed at creating customers for banks, not informed citizens.

Marri helped create Teachers College’s Cowin Financial Literacy Program, which will offer free online trainings for teachers in experiential financial literacy starting next year and which already offers a summer institute and classroom resources.

Education Week spoke with Marri about numeracy, equity, and how teachers can find effective financial literacy programs.

This conversation has been edited for brevity and clarity.

(Marri said that his comments represent his views as an academic, not the positions of the Federal Reserve Bank.)

We’re seeing more states add financial literacy standards and requirements. Is that a positive development?

I think it’s a positive trend to have financial literacy standards, but I think that’s not enough. It’s just a tiny step. We need to think more about economic literacy, which is all about creating engaged democratic citizens who understand both the macro and micro forces that affect their lives.

Take-home pay is directly affected by taxation, other spending. These big fiscal issues affect our personal situations. To be truly economically literate, you should think about having kids understand fiscal policy and monetary policy, not just personal finance.

A recent report from the Council for Economic Education noted that financial literacy standards are becoming more common but fewer states are requiring economics.

That’s just a mistake. True, personal finance should be in there, but if you’re only teaching personal finance you’re focusing on the trees and not looking at the forest.

Remember, we’re not trying to create junior economists by teaching economics. We’re trying to create active and engaged citizens. That’s why we have public education.

You’re learning to use numeracy, learning to figure out what public policy means, how the national economy works. These are essential skills.

Are the resources there to help teachers teach about financial literacy? Do teachers know how to teach the subject?

We have a lot of work to do. The same amount we’ve spent on improving historical literacy and understanding, we need to do for financial and economic education.

Every time there’s a crisis, there’s more focus on personal finance. That makes sense. But we need to spend more resources on figuring out how to create greater overall economic literacy.

At Columbia we’ve created That’s all about helping teachers understand fiscal policy. It’s a way to help them understand economic literacy.

There are a lot of resources out there. I did a research project about four years ago, and there are some 800 examples of resources to teach about financial literacy.

But are they actually good resources? Are they good things for teachers to be using?

Well, we know most of them are pretty didactic. And research shows that didactic lessons don’t really work. What works is dilemma-based lessons that go through real life scenarios and cases where kids can actually engage and talk through the problems.

A recent study noted that millennial teachers are more interested in teaching about personal finance in school than older teachers.

Well, millennials went through the biggest financial disaster since the Great Depression.

Do you think there’s a taboo in schools or some teachers when it comes to talking about money?

It’s not a taboo; it’s a lack of knowledge. It’s true that the biggest indicator of financial choices is our parents...

The more work the earlier you can do, the better it is. Sesame Street has a great curricula—For You, For Me, and For Later —about savings, charity, and investing, and it’s a great example. Young kids are very excited about talking about money. They understand the concepts, and they see people being stressed out about money at home. They get the concept of saving or spending. We’re doing a total disservice to our children by not talking about it.

You can build off of what they know. You don’t have them memorize rules and numbers and all that stuff. You talk, for instance, about want and need. Say, you want to buy this pair of shoes. But do you need to?

We also don’t give teachers enough credit for what they know. They’re overworked and underpaid. They know what it means to have to be financially literate.

Say I’m a teacher or a school district leader trying to pick a good financial literacy program for my school. What should I be looking for?

Many banks, et cetera, have created things like this. I’m biased: I suggest looking at academic sources, looking for the .edu. And then I look at, who’s the organization who’s created this? I look at universities and nonprofits. I also think about education-based organizations. I love Citibank, but they’re not an education-based organization.

We need a “caveat emptor,” a “buyer beware,” with a lot of stuff that’s out there. It’s worth it to figure out the real motives of the curriculum. If the point of the curriculum is to create more clients, that could be a problem.

Income inequality and student debt have been big topics recently. Is there an equity component to teaching about financial literacy?

Kids see inequity every day. I did a study of kids in Brooklyn, and we talked about what’s social justice, and they said not having toilet paper in our school is social justice. That’s their lived life....Kids see it every day. So why not start with allocation of resources, or the inefficient allocation of resources? Teachers also see this all the time in public schools. They’re struggling where there’s a lack of resources.

Has it become more complicated to be a financially literate citizen in the 21st century?

The tools have become more complicated. I don’t understand them and I do this work every day. But the basics have not changed: Living within your means as much as you can, understanding good debt v. bad debt, differentiating between needs and wants—these are timeless concepts.

Are there particular challenges or misconception in teaching about economics and financial literacy?

The first is to get over the numeracy fear. Once that’s done, you start thinking about it from real-life scenarios, and then kids and teachers will gravitate towards it.

One misconception is that it’s super complicated. It’s not that complicated.

Photo: Anand Marri, via Teachers College, Columbia University.

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A version of this news article first appeared in the Curriculum Matters blog.