It is important to start teaching financial literacy at a young age, integrating it throughout student's educational journies. Learn how combining essential financial knowledge with project-based learning and real-world applications allows students to develop strong financial management skills and feel prepared to navigate life's financial challenges and opportunities.
The National Assessment of Adult Literacy defines literacy as “the ability to use printed and written information to function in society, to achieve one’s goals, and to develop one’s knowledge and potential.” As we approach the end of April, Financial Literacy Month, it is important to consider the role financial literacy plays in all K12 classrooms. We all have a role to play.
Students need to acquire essential personal finance skills early on, as they begin making decisions about their finances both now and in the future. This begins as early as elementary school when students learn about saving and spending, the opportunity cost of economic choices, or simple budgeting. Establishing a solid groundwork of effective financial practices from an early age equips students with the readiness to navigate their financial journey with confidence. Practicing planning for a trip, creating a monthly savings plan, keeping a ledger for a simple small business, or understanding how compounding interest is calculated can help students become financially literate and make better choices later in life. Gaining knowledge about and actively engaging in sound financial management can effectively avert potential financial difficulties before they even arise. Addressing financial challenges once they have taken root becomes considerably more challenging.
One way to help students enhance their financial literacy is to combine essential knowledge with a project-based learning approach, empower students to apply their financial skills to real-world scenarios and cultivate lifelong financial literacy. Defined Learning offers a financial literacy course structured around the National Standards for Personal Financial Education.
The course is designed to not only meet state requirements but also to foster a deep understanding of personal finance concepts that will serve students well throughout students lives. Throughout the course, students work to answer the driving question, “How can I use my knowledge of finances and budgeting skills to plan for a successful future?” They autonomously apply their learning in order to:
- Make decisions related to managing personal financial resources, building earning capability, protecting assets, and adapting to unexpected events.
- Apply sound financial decision-making principles through the many stages of life.
- Exhibit mindful money management behaviors that benefit themselves and their families.
Standards addressed include topics such as earning income, knowing expenses, saving and investing, borrowing money, and risk management. Tasks include choosing the best benefits package for a new job, throwing a graduation party, learning to buy on credit, determining whether to lease or buy a vehicle, paying off debt on a credit card, choosing the right car insurance, creating a personal budget, automated investing, understanding where taxes go on a paycheck and more. Each task is designed to be highly relevant and authentic to the lives of students.
In addition to learning to use financial literacy skills in class, students also need to be able to apply their learning outside of the classroom, demonstrating their literacy beyond school. The Financial Literacy and Education Committee (FLEC) released a resource guide for institutions, students, and families which includes a number of useful tools. Included in the guide is an occupational outlook handbook which shares wage and job duty information. Money management advice, pathways toward military service, and information about financial aid for higher education are also included in the guide.
When all students graduate not only able to read and comprehend text but to use their knowledge to function and thrive in the world, they will be truly literate. To be financially literate, students must be able to navigate the increasingly complex world of budgeting, borrowing, saving, insurance, and more. Financial literacy is not limited to one class in the final years of high school anymore. We must teach financial literacy early and often throughout students’ school years through authentic experiences if they are going to be able to develop true financial literacy beyond their school years.
