April was Financial Literacy Month, but teachers should think about bringing financial literacy into the classroom all year round. Financial literacy lessons can include any money-related topics from balancing a budget to planning for retirement.
Money is something kids will hear about from their friends and on social media. If parents do not teach financial skills, there are no role models or points of reference for US children. This means students will not understand how to earn and save money. Instead, they may take to generalized beliefs, such as the view that wealth is based on circumstance rather than hard work. Financial literacy education helps empower children to take control of their financial futures and to care for themselves and the people they care about.
Lessons Learned From a Financial Literacy Education
1. There is a Relationship Between Earning, Spending and Saving
When children learn that spending and saving happen based on earning, they learn to value money. Young children can learn this by paying for things with a small allowance or playing store with teachers and peers. Older students can learn about savings accounts, checking accounts and creating budgets that balance income and spending.
2. Making Major Purchases Takes Planning
Many students assume they will own a house when they are older. This assumption comes from having grown up in a house and seeing many of the adults in their lives as homeowners. Children make the same assumptions about cars. What the adults in their lives are not telling students, is what actually goes into paying for such large expenses. Teachers can have lenders visit the classroom to talk about the money required to make these types of purchases. These speakers will help students understand the need to save for down payments and learn about loan rates and repayment options.
3. Credit Is Not Free Money
When students see adults pay with credit cards, they do not see cash exchange hands. They usually do not see the monthly bill that comes requiring repayment with interest. To a child, credit cards seem like a way to pay for things when you do not have money. Unless an adult explains to them that purchases with credit involve repayment, students will likely misuse credit in the future. Teachers can do classroom role-plays to explain credit. Let students borrow a pencil, but require that they return the pencil plus something else later on.
4. Finances Are More About Decisions Than Math
Financial decisions are about behaviors and thought-processes. Yes, math is a component of budgeting, but a small one compared to thinking things through. Making smart financial decisions mean weighing wants and needs and thinking about the future. This can be a tough concept for many children who are used to instant gratification. In the classroom, these thinking skills can be developed by giving students choices that include both immediate and delayed rewards.
5. Free Resources for Teachers to Enhance Financial Literacy
There are many online resources available for teachers that can be incorporated into their lessons. For example, many specialized professional associations such as the Council for Economic Education provide a variety of online tools and templates that can be readily implemented.
6. The Financial Options Adults Have Today May Not be Around in the Future
In the United States, many people receive Social Security to help them retire. They are able to stop working between ages 65 and 70 years old and live on some of the money they earned through their working lives. Other people have retirement accounts, but many people do not. In addition, the economy and workforce are always shifting. Some of these retirement options may not be around for children in 50 or 60 years. That means they need to learn about money now, so they can prepare for a future that will include different options.
You do not have to be a math teacher or even a financial expert to help students develop financial literacy. If you have an interest in teaching these and other lessons to students, the Master of Education in Elementary Education or Master of Education in Secondary Education degree at Grand Canyon University’s College of Education might be for you. To learn more, visit our website or click the request More Information Button on this page.