Kids of all ages interact with money. They play cash-based games like Monopoly and are often given allowances with which they can learn to budget.
However, few children are ever formally taught how money works and how it can be used as a tool to get what you want. While some high school students are given an overview of financial literacy, it helps to have a strong understanding of money before those lessons start.
You can bring money lessons to your classroom whether you are leading a class of kindergarteners or preparing high school students for the real world. Here are age-appropriate activities for your students.
The Hows and Whys of Financial Literacy
There is a noticeable divide between who gets to learn financial literacy and who isn’t exposed to this information. Some students might learn financial basics from their parents, while others are left in the dark – or worse, pick up bad habits and misinformation.
“In the United States, for the most part, states do not require personal finance courses for high school graduation,” says Rachelle Dené Poth, an educational advisor. “Currently, 23 states require high school students to take a course. As of 2021, there were 25 states that introduced legislation to have finance courses included as required in the high school curriculum.”
While states are making progress in requiring financial literacy courses, these lessons shouldn’t start in high school. Students as early as kindergarten can learn related vocabulary and understand the basic concepts of money and savings. This is particularly important considering how students engage with money at a young age and have the potential to spend a lot of their parents’ money without realizing it.
Vince Shorb, CEO of the nonprofit National Educators Council, says parents are constantly facing “psychological warfare” targeted at kids to make them spend money. For example, toy ads have been around for centuries, but social media hasn’t. Freemium games and digital communities where participants can buy virtual items (like Animal Crossing) treat money like a fake asset while having players connect real credit cards to their accounts.
It’s also important to note that financial literacy has changed in the past century — and even in the past few decades. Jaime Peters, assistant dean and assistant professor of finance at Maryville University, uses the examples of 401(k) plans and pensions, which most people have right now. 401(k) plans are active and managed by the employee, unlike employer-managed pensions.
Similarly, students today need to understand how credit cards work (including interest rates), and how digital banking and money management change human behavior. While the basic principle of earning more than you spend stays the same, money looks different in the modern era.
Students engage with money as soon as they are old enough to exchange a dollar for an ice cream cone at the beach. And yet, many kids don’t receive formal financial literacy lessons until they reach high school — if that.
Elementary School: Money Basics
There are several ways to help younger learners engage in financial concepts through activities and games. Even creating a store in your classroom with fake currency earned through chores (like cleaning the whiteboard or handing out worksheets) can teach the basics of money management.
The team at InCharge Debt Solutions shares several lesson plans for younger learners (Pre-K through second grade). These start with learning how to make spending decisions and expand into discussions about investing. Lessons are based on the idea that if children are allowed to make spending decisions when they are young and the choices are easy (ice cream or cookies?) then they will develop the tools to make smart spending decisions when they are older.
Jessica Pelletier, executive director of FitMoney, a nonprofit organization that advocates for financial literacy education, describes a game called “Needs vs. Wants” that young children can play. You create a scavenger hunt where students need to identify the needs over the wants or simply complete this exercise orally with the class.
Use the grocery store as an example: Is a box of cookies a need or a want? Is sandwich bread for school lunches (along with ham and cheese) a need or a want? Teaching even the youngest students these basic terms can give them the vocabulary to build decision-making skills.
Louise Hill, cofounder and chief operating officer of the education app GoHenry, takes this a step further. In her needs and wants game, she introduces the concept of brand names and generic items and highlights how they are similar products with different prices. What are the benefits and drawbacks of choosing generic granola bars compared to buying brand name items? This lesson can also tie into small savings adding up as students can see how choosing more affordable options lowers their grocery bills.
Another resource for younger kids is Financial Literacy Rocks by Receivables Management Association International. According to RMAI, “having the proper skills and knowledge about what to do with money and how to use it wisely at a young age is key to a good financial grasp for the future.” You can use this page as a jumping-off point for developing lesson plans with various online games and activities.
Middle School: Building Good Financial Habits
As students get older, they can learn more advanced money management concepts beyond spending their allowance money. They can start to learn what it is like to handle money on a larger scale and potentially invest it in the future.
Matthew Lynch at the Edvocate highlights one activity where students take on someone else’s reality and develop a budget for their costs. You can create different profiles and have students randomly draw from a pile to see which sample person they need to create a budget for.
As an example, a student might pull a single-income household that brings in $60,000 annually with three kids of different ages. Your student will research costs like average mortgage payments in the area, childcare costs, and food expenses to see what a monthly budget looks like. As a teacher, you can highlight forgotten costs like taxes, home insurance, and car payments. Not only does this promote literacy, but it also builds empathy.
In an article for Number Dyslexia, Manpreet Singh shares an activity that teaches interest rates using a deck of cards. Each student draws a card with the card number representing the interest rate over a period of time. Each day is equivalent to five years and students calculate compound interest over time. Students can see how their assets (or debts) grow, and learn how interest works in the long term.
Jacqui Murray, a teacher and NEA member, sets out multiple options to digitize your financial literacy lesson plans. Students can play a stock market game that simulates the rise and fall of different stocks (a game that more than 600,000 students play each year). They can also play “Financial Football,” which was developed by the National Football League to promote financial literacy. Digital simulations allow students to make mistakes without actually losing money.
It’s even possible to teach financial literacy through Minecraft. Alex Bosfield, a Minecraft certified educator, explains how you can use this game to engage middle school age students in financial literacy-based topics.
“When I had the chance to write these lessons for middle school students, I was so excited,” says Bosfield. “For me, it was a chance to help kids learn, in a gaming environment, what I never did and wish I had.”
High School: Preparing for Adulthood
As students approach adulthood, financial literacy becomes less theoretical and more practical. Some of your students already have part-time jobs and most of your students will need to create their own budgets after graduating. Some might have to choose between loans for college while others set up 401(k)s at the companies they work at.
Amanda Clark, a fifth-grade teacher, says a lesson plan can be created for older students researching college expenses and funding opportunities. She developed lesson plans where students estimate college costs based on different options (local, state, private, and out-of-state) and the funding options available for each choice. Some students might have parents to help them with these expenses, but other students might have to secure financing on their own and can benefit from knowing their options.
Another great resource is from Amanda Grossman at Money Prodigy. Grossman developed a teen budget binder to help older students start managing their money and preparing for early adulthood. She also keeps a running blog of resources and activities for teachers and parents.
For example, Grossman has a PDF lesson plan on the cost of renting a place. Students can learn how to research rentals in their area, identify which features are essential to them (like private vs. communal laundry), and build a budget around added costs like rental insurance, pet fees and utilities.
You can also make this activity more complex by asking students to work in pairs or triplets to divide the costs as roommates. Should one roommate pay more if they have a bigger room? What if the other two roommates don’t earn as much as the first? This shows how even one financial line item like housing costs can lead to difficult talks and financial decisions.
There are many discussions around financial literacy that you can have with your students throughout the year. One question posed by iGrad Financial Wellness is whether income reflects wealth. This can be viewed through a celebrity lens, as many athletes and movie stars spend their money faster than they can make it. However, it can also be viewed through a practical lens in regard to cost of living.
An employee working for the Amazon corporate headquarters in Seattle might seem wealthy if they earn $100,000 per year, but does that allow them to keep up with the cost of living in the area? This might be a more appropriate discussion for older students who are making plans for after graduation.
If you haven’t already, bookmark TeachFinLit.org. It’s a site that was developed by educators to help students learn financial literacy. The content is designed for high school education and covers everything from risk management and insurance to credit and debt.
Learning money lessons as an adult can be expensive if you don’t have at least a grounding in financial literacy. Many people feel that if they knew what APR (annual percentage rate) meant before they took out a credit card or understood mortgage interest rates before buying a house, they might have made better decisions. You can’t prevent every financial mistake your students make, but you can give them the right tools for smarter decision-making.
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