How many times have you heard your kids complain that what they’re learning in school has nothing to do with the “real world”? It’s true that a lot of what students are being taught in their elementary, middle school and high school classrooms does not appear to them to have any meaningful applications in their lives. Teachers, however, know better. They know that today’s lessons pay off in an infinite number of practical ways later in life. There’s no subject where that’s truer than financial literacy. It’s crucial – for individuals and the larger community – that students and young adults develop a solid foundation of personal finance knowledge, skills and habits in order to thrive. Practicing good money habits means the difference between long-term financial security and serious financial straits.
Financial literacy education is the responsibility of everyone, but most particularly parents and teachers. This guide focuses primarily on teaching financial literacy in elementary, middle and high schools. However, the concepts discussed below – and many of the resources listed – are also helpful for parents and others interested in promoting sound personal finance practices by kids and teens alike. Below you’ll find our suggestions for what concepts should be taught to kids from pre-k through grade 12, and the best times to introduce those concepts. You’ll also find an extensive list of some of the best resources – books, lesson plans, activities, videos, games and more – to supplement financial literacy education in the classroom. Finally, we’ve included an interview with expert Linda Phillips, author of The Zela Wela Way Kids books and other financial responsibility products for kids, and founder of The Wela Way financial life skills website.
Financial Responsibility for Elementary, Middle School and High School Students
When it comes to teaching students about financial responsibility – or practically anything else, come to think of it – timing is everything. Here are a few ideas and suggestions on what to teach children about personal finance, and when to do it.
Pre-K and Elementary School
At this age, of course, kids feel practically no real consequences from poor saving and spending habits. They are little kids, after all. Nevertheless, children begin to form an understanding of basic money concepts by the age of three and have their money habits mostly set by age seven. Which means that it’s a good idea to start youngsters out on the path to financial literacy sooner rather than later.
A great place to start is by using coins in teaching toddlers how to count. They don’t necessarily have to understand the values of the specific coins. That can wait until ages three to six, which is also a good time to introduce the concept of immediate versus delayed gratification. When they reach the ages of six to 11, it’s time to introduce kids to some of the basic practical effects of money (earning and saving) through allowances and by earning money for chores or small jobs around the neighborhood. In the classroom, teachers can set up their own simulated classroom economies where students earn, save, invest and spend “class cash,” among other fun and educational activities.
Middle School
If it hasn’t happened already, students in middle school should be well on their way to having a solid foundation in the basics of financial responsibility through earning money by taking on more chores around the house (mowing the yard, babysitting, etc.), helping out in a family business, and maybe even starting a small business of their own. Middle school is also the time for teachers to introduce more advanced financial literacy topics into the classroom, such as budgeting, investing, taxes, career planning, entrepreneurship, and the psychological and emotional relationships people have with their money.
High School
The advanced topics introduced in middle school are the same ones to reinforce and delve into deeper in high school. Practical, action-based lessons focused on real-life personal finance situations are the way to go. Examples include purchasing a home or vehicle, filing income tax forms, money issues with roommates, paying for college, finding and using credit cards responsibly, purchasing insurance, investing in stocks, and retirement and estate planning.
Classroom Resources for Teaching Financial Literacy: Lesson Plans, Publications, Worksheets, Videos, Interactive Tools, Games and More
The selection of quality classroom resource materials available for teaching financial literacy is almost endless, with most offered completely free-of-charge. Below is a list of some of the best and most popular of those resources currently offered.
Jump$tart Coalition for Personal Financial Literacy
The Jump$tart Coalition for Personal Financial Literacy is a 501(c)(3) tax-exempt nonprofit organization consisting of a coalition of over 100 federal governmental agencies and national partners, along with independent affiliated organizations in all 50 states plus the District of Columbia. Jump$tart’s purpose is to support the efforts of its partners in fostering cooperation and collaboration with others in the financial literacy community with the goal of preparing the nation’s youth for “lifelong financial success.” Jump$tart offers a number of useful resources in furtherance of that purpose, including:
Jump$tart Clearinghouse
The Jump$tart Clearinghouse offers an extremely useful comprehensive search engine for locating financial literacy resources of every kind, both free and fee-based. Users have the option of filtering their search results according to grade level, resource type, price and Jump$tart standards. Those companies and organizations with educational resources they wish to share may register as Clearinghouse providers and submit their resources for inclusion on the site.
Jump$tart Financial Foundation for Educators (J$FFE)
The J$FFE is a model program designed to standardize teacher training in personal finance. Qualifying organizations can apply for a free, limited license to use the model to conduct professional development training programs in their local areas. The model is customizable and suitable for teachers of any grade level for incorporating financial education into their curriculum, regardless of class subject.
National Standards in K-12 Personal Finance Education
Developed by Jump$tart and endorsed by the NEA, the National Standards in K-12 Personal Finance Education lays out the various financial literacy competencies students should acquire from their kindergarten through high school years. The standards are intended to guide classroom education on financial literacy. They may also be employed in the home as well as post-secondary and adult education, and for professional development for teachers, counselors and others. Competency benchmarks are provided for kindergarten, 4th grade, 8th grade and 12th grade in six major categories: Credit and Debt, Employment and Income, Financial Decision Making, Investment, Risk Management and Insurance, and Spending and Saving.
MyMoney.gov: Resources for Teachers and Educators
MyMoney.gov is a federal government website that is part of the Federal Financial Literacy and Education Commission whose goal is to “strengthen financial capability and increase access to financial services for all Americans.” MyMoney.gov’s Resources for Teachers and Educators webpage offers information and links to a variety of guides, curricula and other related federal agencies to help educators teach financial capability concepts to their students. Among the resources that can be accessed are:
Federalreserveeducation.org
A service of the U.S. Federal Reserve, Federalreserveeducation.org allows users to access to an extensive selection of guides, publications, curricula, and other related materials via search engine. Resources can be accessed by specific grade levels.
Investor.gov: Resources for Classrooms
U.S. Securities and Exchange Commission site offering access to its introductory guide, Saving and Investing for Students, as well as additional saving and investing materials, games, tools and more.
FDIC.gov: Teacher Online Resource Center
Operated by the Federal Deposit Insurance Corporation, the Teacher Online Resource Center website is the starting point for accessing several FDIC education-related resources, including videos, links to a wide range of additional educator resources. Featured are the Money Smart for Young People programs, with four free downloadable grade level-based (pre-k to 2, 3-5, 6-8, and 9-12) curricula. Of special note is this Money Smart Student Coloring/Activity Book for pre-k through grade 2 kids which can be downloaded free of charge.
IRS.gov: Understanding Taxes for Teachers
This Internal Revenue Service website offers 38 lesson plans, along with downloadable supplemental materials for teaching the “hows and whys” of taxes. Students can complete lessons either by way of downloaded classroom activities, worksheets and assessments, or online via interactive activities and simulations.
Additional Resources
- Banzai Online Financial Literacy Program - Grades 3-12
- The Basics of Saving and Investing: Investor Education 2020 - Grades 9-12
- Council for Economic Education: K-12 Resources - K-12
- Federal Reserve Bank of Philadelphia: Lesson Plans for Teachers - K-12
- Finance Glossary - K-12
- Financial Literacy for Kids - Pre-K through Grade 2
- Hands on Banking: Courses and Lesson Plans - Kids, teens and young adults
- Money as You Learn - K-12
- MoneySKILL - Grades 7-12
- My Classroom Economy - K-12
- NEFE High School Financial Planning Program - Grades 9-12
- Next Gen Personal Finance - Grades 7-12
- Practical Money Skills - Pre-K throught Grade 12
- ReadWriteThink - K-5
- Scholastic Adventures in Math: Financial Literacy Lessons - K-8
- The Stock Market Game - Grades 4-12
- TD Bank: Wow! Zone for Educators - K-12
- Treasury Direct: Money Math Lessons for Life - Grades 7-9
- Warren Buffett’s Secret Millionaire’s Club Learn & Earn - Grades 1-8
- Wise Pockets World Schoolhouse - Grades 3-6
Linda Phillips is the founder of The Wela Way, a website featuring financial life skills information, advice and other resources for kids, teens, parents and financial professionals. The Wela Way resources have been featured on ABC News, CBC News, Yahoo Finance, the Chicago Tribune, CNN and other media outlets. Linda holds an Honours Bachelor of Science in Kinesiology and a Masters of Business Administration, and previously worked in the sports medicine and international corporate medical fields for over twenty-five years.
How well are we doing at preparing our kids for the real world in terms of financial responsibility and literacy?
If we look at the current national financial well-being of our young adults, it’s nothing short of a disaster. We are not doing well at all at preparing our youth for adult life and managing the number one resource they will deal with every day. When you consider measurements such as student loan debt, consumer debt, spending habits and basic, potentially damaging financial (and health) habits - like consistently eating out – the statistics paint a dire picture. Additionally, the numerical indicators don’t take into account the enormous effects of the stress and anxiety these financial challenges cause. And those factors impact all of us, both as individuals and our society as a whole.
Young people today are growing up in a world that is entirely different than it was when we adults were children and teens. Therefore, their educations need to address these monumental changes in order for them to learn and implement the skills they require now to achieve mental and physical health, success and happiness in the future.
Is there a particular age or grade level that's best to start teaching kids about financial responsibility?
There has been quite a bit of research done showing that a person’s money wiring and belief systems are firmly in place by the age of seven. Thus, in order to help children learn the basics with open-mindedness and create positive, enabling money beliefs, it would be ideal to start in the pre-kindergarten and kindergarten classrooms. Children today need financial life lessons and hands-on opportunities that provide them with inspiration, hope, personal relevance and a framework to manage their money and dreams successfully. When these elements are combined, their imagination, personal competency and optimism flourish.
Do you have any recommendations for how to start the process?
Start with simple and fun concepts such as the learning the difference between needs and wants, the concept of saving, and so forth. This is exactly why I wrote the Zela Wela kids storybooks. I needed a fun way to share key lessons with my children in a simple, entertaining way without lecturing them. The Zela Wela Kids Needs and Wants book is set in a grocery store purposely because it is a real-life situation where kids are enticed by desires such as toys and candy that can often lead to upset. The story gives both the child and the parent or teacher strategies such as the Wish List that helps to effectively deal with the emotional situation.
Any other suggestions?
A very simple and powerful activity that helps kids learn how to manage money and develop their financial numeracy skills is the “GISS” framework. GISS stands for Give, Invest, Save and Spend. GISS teaches the invaluable concept that money has numerous important purposes – that it’s not just for spending. This is fundamental knowledge for building long-term wealth but isn’t commonly taught. Building a “GISS” bank is something that kids are doing at home and in classrooms. This process can then be automated when they open accounts at financial institutions and begin receiving income.
How about as kids grow older?
A key lesson for teens to understand is this: It’s what they do each day from this point forward that creates their financial life. It doesn’t matter what their background is or mistakes they’ve made, it’s what they do from this point forward. Having conscious awareness of the fact that they are responsible for – and actually creating – their financial future based on their financial decisions is fundamental to their path towards financial well-being. Habits such as dividing up their income for different purposes will be the basis of their financial future. These days there are exponentially more financial decisions made in a day than ever before in history. We all have to learn to make those seemingly “small” decisions effectively or our futures will be impacted. There’s no way around it. It can be as simple as saying, “I choose not to buy that, it’s not going to take me closer to my goal.”
Being aware of cash flow is another great example. Many surveys show young adults think they can buy much more with a given salary than is realistic. Often young adults will start living a more expensive lifestyle than they can really afford and begin to go into debt. Eating out is often one of the major expenses causing this problem, but because they don’t know what their cash flow in and out of their bank account is, they can’t figure out why they are constantly getting further behind financially. Creating a spending plan (I prefer this term versus calling it a budget) is a really important success habit for a young person, whether they are saving for a car, school tuition or their first house. It is ideal if they have an inspiring goal first, because that will help motivate them to make a good effort to create the plan with realism and thoughtfulness.
What can schools (and teachers) do to help parents teach their kids about financial responsibility? Are there things that parents and teachers can do in coordination with each other to encourage better financial practices by their children/students?
Can you tell us a little about the Wela Way?
My books and resources were developed to help my children – and ultimately children all over the world – learn essential life skills based on personal values and provide them with activities that would stimulate the development of great financial and life habits. When I had gone looking to find this type of program, I couldn’t find what I wanted. I also needed this information myself, as I had just gone through several life altering events in a very short time. I knew I had to figure out how to get through these challenges so I could be the mom I wanted to be to my children – healthy and inspired.
The Zela Wela Kids financial storybooks have been successfully piloted with over 1,900 elementary school children by Memorial University and are available in print form and downloadable PDFs that are often used by teachers on SMART Boards. The Steps to Success activity guide for teens and young adults, and parents guides have been successfully reviewed by the Financial Industry Regulatory Authority (FINRA) and are used internationally by families, teachers and financial professionals to provide the opportunity for our youth to complete valuable activities that help them begin to develop their financial path.