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WHAT WORKS IN EDUCATION The George Lucas Educational Foundation

Schools That Work | Practice

Ariel Community Academy

Grades K-8 | Chicago, IL

Getting an Early Start on Financial Literacy

A financial-literacy curriculum provides real-world context for learning and helps students directly connect school with their future goals.

Transcript

Getting an Early Start on Financial Literacy Pays Off (Transcript)

David: One of the biggest challenges that schools everywhere face is engaging their students in the education process. Making school relevant. Making school matter to the kids and their families. We're always looking for a school that's nailed that challenge. In this month's, "Schools that Work," installment, we go to the Ariel Community Academy on the Southside of Chicago. Where with a student population of modest means, they've seized on the vehicle of financial literacy to engage the students and engage their families, teaching kids about money. Teaching them about family economy. Teaching them about the critical decision-making that's required to secure your future, secure the future of your family. And to break the cycle of poverty. The results at Ariel have been impressive, 97 percent of the students are graduating from high school; 65 percent are matriculating into college. We hope this installment of "Schools that Work" will be an inspiration to you, and help you think about the kinds of changes you can make to better engage your students.

Lennette: Critical thinking is what every school teaches, or hopes to teach, or attempts to teach. But the thinking is not just enough. You've got to have action. And I think financial literacy is the best venue for that, because what's more global than money?

Regina: This is a Title 1 school, so we have lots of kids who are living at or below the poverty line. These are average kids who have the absolute ability to learn and to understand finance and economics, because it's couched in a way that relates to their everyday life and relates to decisions that they are actually making, or will have to make in the future.

Lennette: Financial literacy is a body of knowledge. Investing or entrepreneurship are the subjects.

Regina: So we have four main components of the curriculum. First grade is personal finance. Second grade is a combination of economics and personal finance, and third grade is about monetary policy and what money is and how does money work. Well, starting in fourth grade, it's a lot more fluid. We want teachers to be able to pick and choose. And so instead of teaching specifically to the test, we strive to make everything relevant. Ariel students typically score much better in math and better in reading.

Judith: The curriculum needs to be deep. It needs to be encompassing. The point of student success is for students to understand that with every single classroom that they participate in, it is directly connected to their own life goals.

Regina: So our investments class today, we're going to talk about spending our money. What did we do last investments class? Who can think back and remember? what were we spending our money on? What were we doing?

Student: Carnival things.

Regina: Yeah, things at the carnival!

Regina: The kids really respond well to seeing other children making decisions in literature that we read. So either watching a video or reading a book is a great way to get them invested.

Regina: Listen to this story carefully. Let's think, is this about planned spending? Someone thought about it carefully? Or is this about unplanned spending? They just saw it and they bought it. "Penny ran to her room to get some money from her savings bank." When she put money in that bank, what is that called? When she was saving up all her money, she put the money into the bank? Shanard?

Shanard: Deposit.

Regina: Yeah, she was depositing her money. "Mom was going to get paper towels, plant food and a book about flowers for Miss Kim's birthday present. Penny added a notebook to mom's shopping list." A.J., Penny's mom made a shopping list just like your parents did.

Regina: This is super important for all children. It's very important for the kids that we teach. Low-income children have fewer chances. they already have the deck stacked against them. And oftentimes, they are not the ones who are getting the opportunity to network, to meet people, and to take charge of their lives, so that they can graduate high school and either find a job or go on to higher education.

Regina: These kids are on a track to go to excellent high schools, and to be accepted into college. And we give them the tools, and hopefully they take that, feel inspired, and plan their life the way that they want to live.

Lennette: What we really want kids to get, to believe in themselves, to know, "I can do this." And that, "Yes, I'm going to think critically. I'm going to come up with a good game plan." You know, it's not just thinking, you have to do it. You have to be active.

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Credits
  • Director: Zachary Fink
  • Producer: Mariko Nobori
  • Editor: Daniel Jarvis
  • Associate Producer / Assistant Editor: Douglas Keely
  • Camera: Zachary Fink
  • Production Assistant: Christopher McAlister
  • Graphic Design: Maili Holiman
  • Video Programming Producer: Amy Erin Borovoy
  • Executive Producer: David Markus

© 2012 | The George Lucas Educational Foundation | All rights reserved.

Overview: 

Financial Literacy Pays Off

Because 87% of Ariel students qualify for free or reduced-price lunch, they are exposed to financial-literacy concepts that are woven into the curriculum beginning in kindergarten to attempt to break the cycle of poverty. The main elements of the program are a relevant financial-literacy curriculum, community partnerships and parent involvement, and a culturally responsive pedagogy.

The K-8 financial-literacy curriculum consists of four main components: basic economics, personal finance, the business model, and investing. In grades K-4, the curriculum is more scripted, but in the upper grades, teachers receive significant autonomy to develop how the financial-literacy curriculum is woven into the regular content.

To increase the relevance of what they are learning, each first-grade class receives $20,000 in a mutual fund that they can begin to manage when they get to the fourth grade. By the time students are in eighth grade, each class has a full stock portfolio and students are able to create a small-business plan. 

How it's done: 

Analysis and Critical Thinking are Essential  

When the Ariel Community Academy first started a financial-literacy program in 2001, teachers had minimal knowledge of investment principles. They had familiarity with savings, credit cards, and banks, but they lacked sufficient expertise to guide a multifaceted learning process through which students could observe financial principles in daily life. Since 2002, Ariel has had at least one member on staff at all times who has previously worked in the financial-services industry. This on-site expertise has played a crucial role in developing the school’s curriculum.

The success of the financial-literacy program at the Ariel Community Academy depends on three major elements: a financial-literacy curriculum that begins early on and is developmentally appropriate, community partnerships that provide connections to reality and parent involvement in financial-literacy learning, and a cultural sensitivity in the methods of instruction that encourage student choice and the development of decision-making skills.

A Financial-Literacy Curriculum

The curriculum at Ariel is effective because it trains students to compare the long-term and short-term rewards that can result from their financial decisions. By teaching students to consider the less visible, longer-term rewards when making decisions, the program helps kids develop a stronger and more positive future orientation.

The Ariel Community Academy teaches financial decision making to students in grades K-8 in the context of activities that are relevant to their everyday lives, such as weighing the costs and benefits of purchasing a meal from different vendors. Delivering financial education in earlier grades helps to ensure that students who are at risk for dropping out and who may need financial education the most can receive it. Below is the financial-literacy curriculum plan for grades K-4:

  • Kindergarten lessons help put words to the economic concepts with which students may already be familiar.
  • First grade focuses on personal finance, which includes consumer spending and the importance of saving money.
  • Second grade is a combination of economics and personal finance.
  • Third grade is about currency, monetary policy, and the way money works.
  • Fourth grade focuses on business models and the idea of investing.

In the higher grades (5-8), one of the most impactful ways that Ariel teaches real-world financial literacy is by having students invest real money in the stock market; the Ariel Education Initiative provides each incoming first-grade class with a $20,000 endowment. Beginning in fifth or sixth grade, students begin to actively manage this portfolio by making financial decisions about which stocks to buy and which to sell. They have to research different companies and do the comparative math regarding the data they discover to make their decisions. During their final year, eighth-grade students donate half the profits they have made to charity and divide the other half equally among themselves. Students typically receive $100 or more as their personal portion.

Additionally, eighth-grade students must prepare a business plan that includes sound financial analysis, projected business earnings, marketing plans, and growth strategies.

Community Partnerships and Engaged Parents

For schools seeking to replicate Ariel’s curriculum, Ariel’s curriculum director recommends cultivating relationships with local community partners. Such community partnerships can range from inviting experts in the financial-services industry to mentor teachers or collaborate on designing investment curriculum to partnering with a local grocery store to help students understand how businesses operate and how consumers and producers are connected.

Ariel’s outreach efforts have proven very effective in engaging parents in the financial-literacy program. Parents have consistently reported learning new financial concepts through students’ presentations. Ariel’s personal-finance workshops for parents have become increasingly popular over the years.

A Culturally Responsive Pedagogy

At Ariel, one focus of the financial-literacy curriculum is on aiding students to develop a point of view. Educators encourage each student to recognize and cultivate his or her unique perspective. In the creation and management of each class’s investment portfolio, students apply the analytical skills they have developed and their personal perspectives as individual investors to decide collectively what type of portfolio they want to produce. Ultimately, the portfolio is an opportunity for students to use their point of view to make real-world financial decisions.

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