Financial literacy education – free resources

Helping your students get a handle on finance doesn’t have to take up a big chunk of your school year, especially if you have the right lessons at your fingertips. Whether you teach fourth-grade social studies, seventh-grade math, or high school economics, chances are you can begin online to plan a money-management class. From downloadable lesson plans that take up one class period to online games that teach key concepts, Edutopia has found the Web resources that can get you started. Here they are, broken down by grade level.

Elementary School

On the Federal Reserve Bank of New York’s Education page, you’ll find the Econ Explorers Journal, a workbook designed to help elementary school math students understand money. One activity has students visit their local bank to collect savings account and checking account deposit slips and a car-loan application. Then they create characters who deposit and withdraw money, pay bills, and take out a car loan, all the while drawing pictures to illustrate what happens at each step. The lesson teaches the basics of bank accounts, interest rates, and budgets.

The National Council on Economic Education (NCEE) offers the EconEdLink Web site, which includes dozens of free, downloadable lesson plans for K-12 students. For elementary school students, check out A Perfect Pet, which teaches kids about how people have to make choices when they have limited resources. It uses a downloadable story about a trip to the pet store, as well as a puzzle and other activities, to reinforce the point.

The Jump$tart Coalition for Personal Financial Literacy has links to hundreds of other Web sites that offer lesson plans geared toward every grade level, especially elementary school grades. Check out, for example, this lesson on borrowing and lending from Take Charge America. It’s a natural for social studies teachers covering a unit on the Revolutionary War. It teaches lending using a book about Benjamin Franklin and facts about how the American colonies borrowed money from France for the war effort.

Of course The Financial Fairy Tales books and learning materials are also a great fun way for younger kids to understand key money and financial issues.

Middle School

Middle school math teachers can teach basic financial literacy using a downloadable, four-lesson math-curriculum supplement called Money Math. Students use math concepts to learn about budgets, expenses, interest, and tax calculators. For instance, a lesson called WallpaperWoes asks students to figure out the area of a room that needs to be wallpapered and calculate how much it will cost.

For lesson plans that prepare students to be entrepreneurs, check out those from NCEE, such as All in Business. You’ll find activities that teach business-plan essentials, including how to figure out a business’s costs and benefits. It also offers links to other Web sites that can supplement the lesson, such as the Real Planet, which uses funky characters to teach young teenagers about entrepreneurship. Other lessons on the topic for elementary school, middle school, and high school students can be found at These Kids Mean Busines$.

The Web site Rich Kid, Smart Kid has a number of financial lesson plans for all grade levels, including some interactive games. To help teach your middle school students about debt, this game uses a story about a boy who wants to buy a video player but lacks the cash. The activities include writing a creative story about a similar dilemma, and making a collage. The complete plan also comes with a rubric.

High School

Teach your students how to budget with a lesson from the Federal Reserve Bank of San Francisco that also prepares them for the financial realities of different jobs. Students learn about budgeting, saving, and investing, and they can play a game to help illustrate how one’s education, job, and spending habits make a difference to their financial security.

To prepare your students for the barrage of credit card offers they’ll encounter, go to Consumer Jungle. The site requires registration, but the materials on it are free. Choose the section on credit, and you’ll get a complete unit, including an outline, the standards it meets, vocabulary, and lessons that range from how to choose a card to the meaning of credit scores. You can also download Microsoft PowerPoint presentations.

For detailed lesson plans on entrepreneurship and personal finance, go to Merrill Lynch’s Investing Pays Off, which offers teaching guides for elementary school, middle school, and high school students. The high school guide includes questions to test your students’ financial knowledge and worksheets to accompany short lessons on budget planning, time management, choosing a career, and recognizing financial opportunities. Each of the fifteen lessons includes group discussion points and a question designed to tap critical-thinking skills.

High School Diploma

Get ahead in life with a customized, flexible program from Franklin Virtual Schools that will help you quickly obtain your high school diploma.
http://www.franklinvirtualschools.com/

Create Your Own

Are you game to write your own financial-literacy lesson plans? A number of sites offer materials and programs to help. The American Institute of Certified Public Accountants offers advice for young children and teens about money, a video on budgeting for older kids, and activities for elementary school students.

To teach high school students about personal bankruptcy, the U.S. Courts (the official Web site of the federal judiciary) has a program that gives teachers the option of bringing their classes into the courtroom. Or you can show your students how to create their own businesses with help from Bplans.com. Geared toward professionals, this site has detailed instructions for writing a business plan and tips on how to find funding.

Montgomery Blair High School business teacher Kevin Murley tries to give his students lessons on investing, credit, and budgeting, along with lessons on entrepreneurship. The Silver Spring, Maryland, educator is a believer that beyond reading and writing, “the things that make for a successful life are your health and your financial health.” And he wants to instill in his students “a concept of how important money is.”

Alexandra R. Moses is a freelance writer in the Washington, DC, area who specializes in education

How to learn the savings habit – video

Please enjoy this short video which highlights 5 easy and fun ways to encourage your child to start the savings habit.

We like the Moorjar  – spend, share, save system. Its an unique money box with three separate areas. Have a look here

How to Create a Child’s Savings Habit

Most of our habits, both good and bad we learn in childhood. By encouraging your child to save money early in life you are preparing them for a lifetime of financial responsibility and prosperity.

Einstein once referred to compound interest as one of the wonders of the world. A great example of the power of compound interest comes from the selling of Manhattan for a handful of beads:

In the early 1600s, the American Indians sold an island, now called Manhattan in New York, for various beads and trinkets worth about $16. Since Manhattan real estate is now some of the most expensive in the world, it would seem at first glance that the American Indians made a terrible deal. Had the American Indians, however, sold their beads and trinkets, invested their $16 and received 8% compounded annual interest, not only would they have enough money to buy back all of Manhattan, they would still have several hundred million dollars left over. That is the power of compound interest over time.

Warren Buffett, one of the richest men in the world uses a snowball analogy to explain compound interest:

“Life is like a snowball. The important thing is finding wet snow and a really long hill”

The really long hill referring to the effect of time on the growth of money.

Here is a simple example. If your child saved £10 or $10 per week over their working lives of 40 years and received an interest rate of 5% they would accumulate £61,040. However if they started 10 years earlier, that would be £106,740. That’s a difference of over £45,000 from an extra investment of £5,200.

Given that time can play such an important part in the growth of money, the earlier a child starts his or her savings habit, the greater will be their return. Here are 5 top tips to encourage your child to start saving.

  1. Lead by Example – have a jar or money box where you deposit your spare change. Children learn more by what you do than what you say. By wanting to follow your example your job is half done.
  2. Add interest – when your child is old enough to understand the concept of interest you can act like a bank and top up their savings. Keep the numbers simple by adding 1 coin for every 5 or 10 they save. It’s a good opportunity to introduce some simple yet important money lessons.
  3. Open an account – go with your child to the bank and open a savings account. Then make an event of going and making a deposit. Your child will make positive associations with the act of paying in money.
  4. Save for a purpose – it’s much easier to create an interest in saving (excuse the pun), when there is a strongly desired outcome on the end of it. Encourage your child to save for a holiday, a particular toy or something they value.
  5. Consistency – For saving to become a habit it must be done regularly and often. Then gradually, like brushing your teeth it becomes automatic and habitual. If you give an allowance encourage your child to immediately put some money away. If they get extra for chores or birthdays encourage them to allocate a percentage to saving.

In all the above examples it should be emphasised that for the money saving habit to stick it must be enjoyable and rewarding. The word encourage is used rather than coerce or force. Just as compound interest will reap rewards over time, so too will the investment in time spent to encourage the savings habit in your child.

We recommend the Moonjar system for encouraging children to save. Please visit The Financial Fairy Tales for details

US Educators Not Prepared to Teach Financial Literacy

Importance of Financial Literacy

Eighty-nine percent of teachers agree or strongly agree that students should take a financial literacy course or pass a test for high school graduation.
 
Current Teaching
Only 29 percent of teachers are teaching financial education in any way—in existing classes or special classes on finance topics. And fewer than 20 percent of teachers reported feeling “very competent” to teach any of the six personal finance topics surveyed.
 
Using State Standards
Nearly 64 percent of teachers feel not well qualified to use their state’s financial literacy standards. In fact, the study found no influence of state mandates on whether a teacher had taken a course in personal finance, taught a course, or felt competent to teach a course.
 
Teacher Education Faculty
Teacher education faculty felt no more competent to teach specific financial concepts than did K-12 teachers, and they were not more familiar with state financial education standards.
Read the full release here

Lack of Financial Education Puts Children at Risk

Young people are plunging themselves into unmanageable debt because they not being adequately educated on how to handle their finances, moneysupermarket.com has claimed.

The price comparison site said the failure of Britain’s schools to offer education on money matters is putting a generation of young people at financial risk.

“Financial education has been on the agenda so many times but we haven’t really got a proper financial education in place here in the UK,” a spokesperson for the site said.

“That could be targeted more.”

He added that the lack of financial education is “worrying” as it leaves young people at risk of being exploited by unscrupulous finance providers offering credit cards and loans to young people who don’t know how to use credit responsibly.