Teaching students about the value of money is an important part of their learning, and many educators are starting to offer instruction in financial literacy, from embedding finance standards in math or social studies and economics to adding stand-alone personal finance courses to graduation requirements.
How do we make these very important, yet sometimes very dry, topics stick with kids? After 13 years of surveying students’ financial goals and interests, I’ve found that students’ goals repeatedly fall into three main areas:
- Living on their own
- Credit and credit cards
Here is a beginner’s guide to building hands-on and real-world opportunities into personal finance education.
Living on Their Own
Apartment hunting is a homework assignment that requires students to compare rental options through ads and then actually go to an apartment complex (apartment complexes are key because of the on-site sales staff), tour it, and figure out the actual cost of moving in, including the deposits. Students must be 18 or have someone who is 18 with them to tour an apartment. Often, parents or guardians, or older siblings, accompany my students.
I also have the students call up the local energy company for a suggested per-month cost and also ask their insurance agent for a renter’s insurance estimate. Professionals in these industries are always eager to help students.
Moving out: I assign a moving-out questionnaire for students to fill out with their families. This includes questions about what factors will indicate that everyone is ready for the child to move out. The form asks about support after moving out and if that support (monetary or emotional) is contingent on anything—roommates, grades, children, and so on. Also, would the student ever be able to move back in, and under what circumstances? Parents really like this assignment because it gives them a chance to have these very hard but very important conversations with their kids.
Budgeting: If the students don’t know how to budget, they’ll soon be moving back in with their families. Learning how to budget includes preparing family meals that meet nutritional guidelines and also are within an assigned budget. We play The Bean Game, a hands-on game where the students practice budgeting with beans (I use Smarties) on a set of playing cards that outline spending choices and costs. I initially got this activity from our local extension office, but Next Gen Personal Finance has a version of it too. I used Next Gen’s version while teaching online during quarantine. They have all the playing cards loaded into a spreadsheet for digital play. Another great hands-on activity for budgeting is utilizing Junior Achievement Finance Park, a budgeting simulation for personal financial planning and career exploration.
Junior Achievement just rolled out a new curriculum for middle school and high school. My high school students budgeted for four different life stages—teenager, young adult, working adult, and nearing retirement—all while making life decisions like getting married, having children, or adopting pets. In the culminating activity of the unit, I have students research and complete a full budget for when they move out. They’re normally pretty shocked about the cost of living independently and realize that the dream of moving out is a little further off than they thought.
Savings: After stressing the importance of savings, I incorporate how to save into the budgeting activities. I set up the Bean Game to include layoffs or injuries or broken pipes—if the students have enough beans saved, they will be OK; otherwise, they may have to move into their family’s basement. I like to have students play this in pairs, as it helps show the importance of communicating about money with partners. Students also have to set aside money for savings during the JA Finance Park, as well as for the moving-out budget at the end of the unit.
Credit and Credit Cards
Many kids are wary about credit, and rightfully so. I stress the importance of staying within their means. We learn about credit scores through a Jenga game that shows how credit scores are affected. Each block has an event that may increase or decrease their credit score as they go through the game. Students keep track of the ups and downs of their credit during the events they encounter.
Then we do a four corners activity with real credit card offers. I have students compare them, stating which one they would want and why. We discuss how each might work in different situations and that if they don’t feel like they can handle credit responsibly yet, then they shouldn’t try.
Believe it or not, I actually have students tell me they’ve been waiting their entire school career to learn about taxes. Taxes can be scary. I start this topic with an overview of the taxes we have in the U.S. and where the money collected for them goes. Most students don’t realize there are five main tax avenues (income, payroll, sales, excise, property) throughout federal, state, and local governments, and they have no idea about all the things they rely on in daily life that are possible because of taxes.
After we feel like we understand the what and the why, we focus on the how. The IRS has some great simulations to help teach taxes to students. They will walk students through filling out a W4 and a 1040.
I like to remind my students that they don’t have to be able to do everything. That’s why we have tax professionals, real estate agents, financial consultants, etc. If my students can recognize their strengths and weaknesses, and find resources as needed, I’ve done my job.