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WHAT WORKS IN EDUCATION The George Lucas Educational Foundation

Teaching elementary students about money can be challenging. Often, students cannot conceptualize what money is, let alone all of the complicated financial tools that have become a part of our everyday lives.

With so many financial games available online, it is tempting to leap straight into simulations like the stock market game that appear to be engaging, but fail to address the appropriate foundation for teaching money management. So why is a financial education necessary in our schools?

As I have written elsewhere, most people want more than they can afford, and are unwilling to give up something now to save and buy what they really need later. Evidence ranging from the famous marshmallow study, our national savings rate, and a national debt that grew even in times of economic prosperity are compelling examples. Recognizing the problem and understanding the challenge is only half the battle. Addressing how a parent or educator helps shape a child's future financial behavior is necessary.

Elementary Financial Literacy Standards

There are Personal Finance National Standards for elementary grades. Jump$tart, which is a coalition of about 150 national organizations that share an interest in advancing financial literacy among students in pre-kindergarten through college, worked with their partners to write National Standards. These standards are a perfect reference point for elementary teachers passionate about incorporating financial literacy into their lessons.

Urgent Need

As my friend Dan Kadlec pointed out in a recent story with Time, Arne Duncan just said, "As important as reading and math and social studies and science are, I think today more than ever financial literacy has to be part of that. To continue to have a population that is relatively illiterate in these matters, I think has real negative consequences to our democracy." As Kadlec noted, there has yet to be any real action behind this thinking.

Resources for Elementary Financial Literacy

For those of you eager to bring this to your classroom, check out this lesson (downloadable PDF) that my high school Personal Finance students used to teach our entire third grade about what money is, and why they should save it.

Another resource you can rely on that introduces key financial literacy and entrepreneurship concepts is BizWorld. (Full disclosure: I sit on their board.) They have wonderful classroom resources, and they also have a program called BizCamp. If you are lucky enough to make BizCamp a reality for your students, this can be a game-changer for their lives.

In my next two pieces, I will provide lesson guidance for the middle school and high school years.

If you are passionate about financial literacy and want to collaborate with fellow educators to bring personal finance into your classroom, please join us on Twitter for our next #FinEdChat on Wednesday, December 7th from 8:30-9:00 pm. Please feel free to vote for our next topic in advance of the chat.

Comments (11)Sign in or register to postSubscribe to comments via RSS

Bob Holl's picture
Bob Holl
Former classroom teacher and current publisher of educational resources

You might be interested in know that there are a number of downloadable leveled books at Learninga-z.com written on finance-related topics for elementary students. These books are also available as eBooks on tablets or via laptops. Check out Tanya's Money Problem as an example.

Dr. Alice's picture

As an Educational Psychologist making Children's Media (Blue's Clues, Super Why, Little Bill...) you might be interested to use some of the videos that we just made in South East Asia to visually represent these abstract concepts. The program is called Cha-Ching: Money Smart Kids. And the idea behind the videos is School House Rock for Financial Literacy. Check them out and let us know what you think! www.cha-ching.asia

Cindy Dwyer's picture
Cindy Dwyer
Elementary Enrichment Facilitator & Gifted Education Specialist

The Council for Economic Education offers free professional development workshops & materials for teaching financial literacy. I attended their "Financial Fitness for Life" workshop & my students benefited from the lessons. I use some of the activities along with other lessons, on-line games & simulations to teach financial literacy. My 4th & 5th graders were able to have a much better understanding of personal finance as well as economics. Here's the link to their website: http://www.councilforeconed.org/resources/

Prakash Dheeriya PhD Author Finance for Kidz's picture

You might be interested in my children's book series "Finance for Kidz." These are all children's stories, written from their experiences, using their toys but they contain financial lessons. We also cover college level topics in these children's books such as inflation, deflation, risk, return, identity theft etc.
You can check them out at finance4kidz.com

Alex Mazloom's picture

People often ask about how to teach finances to children as young as 5! Even a kindergartner can learn to budget. All they need to learn is how to create a balance and Moderation between Saving, Sharing, and Spending. Moderation is needed in various aspects of life and a kindergartner can defiantly learn to moderate his/her time between playing, watching TV, reading, doing homework, and etc.

Similarly, we need to become Patient for things we like to have, become Responsible for our chores and activities, become Thankful for the countless blessings that surround us and learn not to waste, become Generous with our blessings, become Truthful and learn to identify deception, and many more characters. Even our FICO is heavily weighted (35%) on one character trait!

Financial literacy, no longer, cannot be just about money, interest and banking services. Our youngsters need to learn that Wealth is not just a bout material stuff! True Wealth is combination of Knowledge, Expertise, Money, and Time as well as physical, mental, emotional, and spiritual health. And Wealthy is not the person who merely possesses various forms of Wealth, it a person who knows how utilize various forms of Wealth to make a difference in their personal, family, and community life. Please visit our website (http://www.mindtreasures.com) to view how this unique financial literacy concept is taught at elementary, middle, and high schools as well as community and faith-based center. Result of our work can be watched on a few short videos on this website.

Susan Beacham's picture
Susan Beacham
K-12 Financial Literacy - with a focus on K-4

What Arnie Duncan knows about financial literacy that Paul Farrell missed

Paul Farrell proved that what "bleeds leads" with his story on financial literacy education. He writes that "...even the best-of-intention (financial literacy) programs will never (yes, never) work" because as he puts it "...the human brain (cannot) retrain itself to make rational decisions about investing, finance and budgeting."

Well, Mr. Farrell is kinda right. Retraining is a zero sum game in many instances. Once someone has dug the hole, it's hard to climb out and over. (It's not impossible, Mr. Farrell - that was unnecessarily dramatic, don't you think?)

But it is true that many financial literacy efforts fail because we reach kids with financial education too darn late - after their bad financial behavior is set in stone.

Every parent knows that IF you teach your child from day "one" behavior that you want to see - like how to use their indoor voice, say please and thank you and to brush their teeth at night before bedtime - they will grow up to behave in the way you have taught them. Most of the time anyway.

But, if you wait until they are in high school to teach them life skills, they are no longer listening. Then life skills like their money behavior, now firmly molded, need to be "retrained" - and that is much harder to do.

Teaching a child life skills when they are young is the one window of opportunity we have to shape a child's mind and behavior - and for some reason, money is the one life skill we wait too long to teach.

Today, Arnie Duncan called for EARLY financial education. (see www.susanbeacham.com to read the full article). Early as in kindergarten, when the kids are still listening to us and we have the opportunity to mold their behavior - not change - or "retrain".

As far as Duncan is concerned, the earlier the lessons come the better:

"'I always think you have to start young. So if this is just one course, half a semester [or] a semester senior year, [it's] definitely late in the game,' he said, suggesting that schools should begin incorporating basic financial instruction as early as kindergarten. He admitted, however, that the Department of Education has limited ability to implement such a move, given the broad authority that states and localities have over their own curricula."

I don't know if Duncan knows this is the right time to teach these skills because he has kids himself or because he has seen the data that proves early financial education makes a difference. I just know he's right because I have seen the data - and teaching kids young about money works.

Bottom line - teach your kids about the choices they have for money, how to set goals for those choices, the difference between needs and wants and how to manage an allowance when they are young. Everything can be done in an age-appropriate way and trust me, they will get it. And if you do start young, your child will likely be a member of the Money Savvy Generation instead of a debtor that lives their life servicing that debt rather than living the American dream.

Fred Koch's picture
Fred Koch
K-8 Technology Coach, Sauganash Elementary School, Chicago, IL

I only wish Susan would have made more mention of Money Savvy Generation. We started our son out with their Money Savvy Pig (4 separate compartments: save, spend, donate, invest) in elementary school. Now 15, she speaks of his money and our money in those terms.

Lauren Teather's picture

Thank you so much for blogging about this super important topic. This has been on my radar for the past couple years as a 6th grade math teacher - and "what is my responsibility" in addition to "what can I do to help" the current economic situation. I'm always searching for good resources, so thank you for posting those. I really look forward particularly to the post on middle school. Thanks again!

Bill at FamZoo's picture
Bill at FamZoo
Parent of 5 helping teach kids good money habits at FamZoo.com

Excellent topic and some really great comments. Really agree with Susan's comments about starting early being a real key to effectiveness. Parents can play a huge role here if given some guidance and some simple tools. There are a number of online sites now that focus on filling this need. Ours - FamZoo.com - is just one of many. The more the merrier!

Elva Mellor's picture
Elva Mellor
First grade dual language teacher, consultant.

As a first grade teacher I find that just teaching first graders about money is difficult. Most first graders do not handle "real" money, they tend to have gift cards or parents who "pay".
However, shouldn't we be more concerned about having our members of congress get the lessons on finances?? How do you explain to students that it is OK for congress to be so irresponsible with money but not for society as a whole?

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