Financial Literacy Education: The Fifth “C”
As educators, we are familiar with the Four C’s:
- Critical thinking
There is a Fifth C that doesn’t get as much attention as the others when educators talk about 21st century learning.
The Fifth C, as I have termed it, is Commerce. It is having the ability to be able to read, write, speak, and understand the language of money. According to a survey conducted by the FDIC (Federal Deposit Insurance Corporation), 25% of American households are either unbanked or underbanked, referring to people who don’t have a bank account and/or who don’t use a traditional bank for financial services. This group of Americans are usually the most vulnerable of our society.
As we look to what is the purpose of school and what should students learn in order to be skilled for the jobs of tomorrow, money management and wealth-building should be a part of those discussions. Let’s discuss financial literacy and its relevance and importance for the students we serve.
What is Financial Literacy?
Financial literacy is “investing time in gaining skills and knowledge to help students make informed, effective financial decisions.” In the past financial literacy has centered mainly around personal finance, where balancing a checkbook and learning about ways to save were common topics in the curriculum. Today’s technologically savvy global economy has since changed the landscape of financial literacy and with it topics such as entrepreneurship and investments are starting to appear in discussions. Just as financial literacy has changed over the past few years, how we expose and explore financial literacy topics with our students should also evolve.
What Should We Focus On?
The idea of teaching financial literacy is becoming more welcome in K-12 education, however, the course offerings are not readily available across the country. According to the National Standards in K-12 Personal Finance Education, a well rounded financial education program should include the following six components:
- Spending and saving, which focus on looking at income and expenses and how to save for short and long-term goals;
- Credit and debt, which promotes awareness of how to manage credit and debt;
- Employment and income, which explores career paths and incomes associated with selected paths;
- Investing, which focuses on investment tips and strategies that align with personal financial goals;
- Risk management and insurance, which emphasizes situations and scenarios on how to select relevant and cost-efficient strategies to avoid risk and promote insurance or protections;
- Financial decision making, which focuses on planning for personal financial decisions.
As you explore what topics to begin with, it is important to take into account each component, your learners’ development levels, and from there, decide which topics would benefit your learners and their needs.
For example, in an elementary setting, looking at employment and income, and specifically career paths, is appropriate for this age level. In addition to researching different career paths, elementary teachers could encourage their students to explore the income potential for select career paths to expose students to the reality of wage differences. This approach would push students beyond a basic introduction of common career paths and really get them thinking about how those careers may impact their own futures.
As for high school, looking at topics like credit and debt is more appropriate. Many students turn eighteen during high school. They may be bombarded by credit card offers, which look very enticing for someone that age. As high schoolers approach their senior year, many are planning for college and will need to become aware of the benefits and potential drawbacks of starting a line of credit. Therefore, knowing your students’ personal situations when it comes to financial literacy is important as you plan to explore these topics.
After you decide on the “what” as it relates to financial literacy, knowing where to integrate it is just as important. While financial literacy topics encompass many components, they can be seamlessly integrated into different content areas such as math, economics, business, and social sciences.
In her podcast episode, Vicki Davis introduces the idea of taking a project-based approach to teaching financial literacy topics, where students are applying financial and problem solving concepts into real world settings. Going along with this idea, financial literacy can appear in project-based units found in a social science course to an elementary gifted classroom.
Another option to integrate financial literacy is to cover topics in extracurricular settings and at home with parents and families. The possibilities for starting the discussion on financial literacy with our students are endless and can go as far as we want to take them.
Preparing for Financial Literacy
Regardless of what approach you use for introducing financial literacy concepts, it is important to note the resources you have readily available.
- Do you have access to the internet and devices that connect to the internet?
- Do you have community ties with local businesses like banks or business owners?
Bringing in guest speakers from local businesses and community partners is usually an untapped resource that many schools and educators often overlook. Students need to see what financial literacy looks like in the real world and having these guest speakers can expose them to leaders who are in different career paths and possibly open real life discussions about personal financial decisions that they may not otherwise get in their own communities or even at school. When you plan your topics, look at what you have available and how you can modify your lessons to make them relevant for your student population needs.
As mentioned previously, it is crucial to take into account students’ developmental levels as well as their experiences and needs. For example, in some communities, having a bank account and knowing how to utilize one is an area of need and one that should be addressed. In these communities, exposing learners early to concepts of banking and saving are most crucial not only for these learners but for their futures and breaking generational cycles of poverty. In situations like these, financial literacy is not just something else to add to the curriculum, but a tool that can empower learners and further impact their future and communities.
Resources To Get You Started
My favorite tool that almost guarantees instant access on resources for teaching financial literacy is Twitter. With this social media tool, you can start by using the hashtags #FinEdChat, #Finlit, and #FinancialLiteracy to browse through tweets related to financial literacy and entrepreneurship education. The use of these hashtags makes it the most convenient in narrowing your search on what seems like an endless stream of tweets. As you scroll through these hashtags, make sure your favorite resources for future reference and follow those individuals or institutions who constantly share valuable information. By doing this, you will build up a robust network and list of resources to start your financial literacy education journey.
For the elementary setting, it is recommended to use games to gauge interest and bring financial literacy topics to life for younger learners. Practical Money Skills offers several games to try that include Peter Pig’s Money Counter, which helps younger learners count and save money, and Money Metropolis, which is a mini-simulation where upper elementary students can create their own avatars and go through different situations and make decisions on making money, saving and spending. Finally, Road Trip to Savings is a game best suited for upper elementary student that is set up like a road trip where students start with $1,000 and no savings. The objective of the game is to go through the road trip and try to save but also continue on the road trip without depleting your cash.
One of the most beneficial features of these games is that they are all offered for free and do not require a login for access. This makes it convenient for elementary teachers to bookmark them or add them to a platform such as Google Classroom. Also, these games are shorter, which may be more effective in maintaining interest and engagement among younger learners.
For middle school and high school students, it is appropriate to try both games, apps, and simulations to engage learners in different financial literacy concepts. Practical Money Skills also has games such as Financial Football, where players use football rules and plays to make different financial decisions. Similarly, Financial Soccer lets players put their financial management skills to the test by using soccer as a platform. Just like their other games offered through Practical Money Skills, these are free and only require a download of the application on either an Android or IOS device. Finally, the visuals for these applications mimic video games, which may increase engagement for this age group.
There are also games suited for high school students which offer a more realistic approach in learning and applying financial literacy concepts. With the game, The Payoff, players are introduced to two teenage video bloggers who must make important financial decisions in order to compete in a video competition. Another option to try is Geni Revolution, an online personal finance game. This one is an in-depth simulation, where learners are able to create their avatar and go through a series of sixteen missions where they must problem solve get someone out of financial trouble.
Financial literacy education has been around for a bit, but the field of education is not embracing it as one of the core literacies. While it can be incorporated into different content areas such as math and social sciences, it is often overlooked in the primary education setting.
If we are to prepare our learners to become independent learners when it comes to their personal finances and decision-making, we must expose them to different financial literacy concepts early on. Also, as we determine what concepts we will teach, it is just as important to consider students’ previous knowledge and experiences with understanding the language and mindset of money management. We can’t treat financial literacy as something else to add on—it is an empowerment tool for our learners to educate themselves and determine their own futures.
How do you feel about financial literacy education? Tell us on Twitter @Schoology