The Best Way to Teach Kids About Money? Slip It Into Math and English Classes

With 46 states signed on for the new Common Core academic standards in 2014, the Federal government is bidding to make personal finance instruction an embedded part of Math and English. Treasury will unveil an online teachers tool this spring.

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A global consensus is forming around how to teach kids about money in school. The answer: Embed personal finance lessons in the courses they already take.

That’s the approach in the U.K., which this month elected to make financial literacy lessons mandatory throughout its school system in 2014. Concepts like budgeting and compound interest will be explored in math classes as well a new “citizenship” course. Perhaps a dozen other countries in Europe and Asia embrace this approach as well.

Now the U.S. is hopping on board. In the next couple months, the Treasury Department will go live with a website likely to be found at moneyasyoulearn.org. This site will offer teachers ready-made personal finance lessons that fit neatly into existing math and English courses. In time, the website will expand to include personal finance lessons suitable for social studies, history, and science classes too.

The effort aligns with the Common Core Standards initiative that 46 states and the District of Columbia have agreed to follow, starting in 2014. These new standards establish minimum knowledge guidelines, by grade, so that a child moving from one state to another gets a consistent education. The idea behind the money-as-you-learn project is that teachers who must now refashion their lessons to be in concert with the Common Core will have resources to seamlessly infuse personal finance instruction.

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This is a big step. Education in the U.S. is controlled at the state level. The Federal government cannot dictate standards. The Common Core Standards, which for now apply only to math and English, address the need for uniformity. The federal government is seizing this moment to promote financial education.

“This was the moment to act,” says Amy Rosen, CEO of the nonprofit Network for Teaching Entrepreneurship and a vice chair of the President’s Advisory Council on Financial Capability. “We have an historic opportunity to fast-track personal finance knowledge in this country.”

The new website and the push to embed money lessons into existing courses was a central part of the Council’s final report on financial literacy, which was presented to President Obama Feb. 19. “This was not a perfunctory discussion,” Rosen says. “I am excited about the President’s personal commitment to financial education.”

The coming money-as-you-learn website complements another online tool that the Council unveiled last year: moneyasyougrow.org, which describes what kids should know about money at various ages. I first reported on that website a year ago. With little publicity it has had 600,000 visitors. Rosen envisions both websites eventually being housed at an organization still to be identified, but which is better set up to promote the sites.

Brian Page, an Ohio school teacher serving on the working committee that is gathering content for the new website, says he believes teachers will embrace the tool. “This project brings practical financial knowledge aligned with common core into our classrooms with turnkey resources,” he says. “The resources are relevant and matter to many students now.”

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Much of the content on moneyasyoulearn.org will be plucked from existing websites, texts, news reports, and research. It will be straightforward and practical information plainly presented in an age-appropriate manner. But some of the content is being specially written around the “11 big ideas” that drive the personal finance effort, says Julie Heath, director of the Economics Center at University of Cincinnati and a Council working committee chair.

The guiding concepts:

  • Compound interest, which leads to discussion of saving,
  • Opportunity cost, which leads to smart decision making,
  • Value of education, which leads to wise choices about finding a college and paying for it,
  • Risk, which leads to discussion of diversification and insurance,
  • What money is, which leads to understanding what it can and cannot buy,
  • Time value of money, which leads to more informed purchasing, investing and planning,
  • Cost/benefit analysis, which leads to better decision making,
  • Setting Goals, which leads to desired outcomes,
  • Delayed gratification, which leads to the ability to consume more in the future,
  • Scarcity, which leads to acknowledging limitations and making choices,
  • Inflation, which leads to discussion of how to mitigate its effects on saving and investment.

“People’s concept of financial literacy is very narrow,” Heath says. “They think it is all about balancing a checkbook and making a budget.” But widely applicable concepts underpin smart money management. “It’s an approach to life, and it shows up everywhere,” Heath says. “These big ideas are designed to lead to deeper understanding and changed behavior.”

Embedded personal finance is not meant to discourage stand-alone and elective money courses, Rosen says. But the reality is that few school districts offer a stand-alone course in personal finance and only four states require one. Plugging such lessons into the Common Core may be the closest we come to a broad requirement that kids learn something about money before they get their own credit card or cell phone, or sign up for student loans.

68 comments
amateurconsumer
amateurconsumer

It's a good start...but not enough!  Despite  a glut of financial literacy education, the needle hasn't moved very much two decades into the financial literacy movement, which begs the question; why?  Where is teaching the Psychology of Consumerism in those guiding concepts?  Where is living a life free from the chains of debt as a guiding concept or are those concepts too radical?  If we keep teaching financial functionality without teaching financial life building skills, then the needle will continue to remain where it has for the last two decades; without moving much!   http://theamateurconsumer.com/teach-more-financial-literacy-i-dont-think-so/

EdelRamilo-Peria
EdelRamilo-Peria

Wow! I admire countries that initiate the integration of financial education into the school curriculum. More power to the UK and the US!

Someday, I wish we'd have the same programs in the Philippines. We've got a long way to go. 

ThickettFinance
ThickettFinance

@Wheaton_Wealth they'll make mistakes but they'll learn at a point where the consequences are minimal. What's your opinion?

ThickettFinance
ThickettFinance

@Wheaton_Wealth Parents should allow children to make financial decisions and give them responsibility.

chiragdsagar
chiragdsagar

@dankadlec @TIMEBusiness - just a friendly plug-in, but @Moneythink uses college volunteers to mentor HS students using pop-culture examples

bret.shroyer
bret.shroyer

The truth is, these are the things that our kids just **will not learn** in school, because it's not taught.  If they don't start "slipping this in" to math and English classes, they're just not going to learn it.  It has to come from the home.  The bad news is, it all seems contrary to the messages fed to them by our consumption-driven economy.  The good news is, they are all really simple lessons, based in (as you say) common sense.  I hope more parents follow your lead.


AnnaMoste
AnnaMoste

RT @CEO_INGDIRECTAU Makes sense 4 #financialliteracy education 2b integrated into everyday lessons in schools http://t.co/AwtVp8BknF #finlit

johnhopebryant
johnhopebryant

@FinEdChat I didn't. Thanks. That's great. The Council I serve on.

ChristinaHank
ChristinaHank

@FinEdChat @oheducation That is really awesome! Congratulations!

FCScourses
FCScourses

@TIME Teaching kids about money and budgeting is very important and financial management is taught in Family and Consumer Sciences courses.

EDactivistNH
EDactivistNH

@OHEducation @FinEdChat Common Core erodes state and local control in Ed. How does Centralizing Ed improve ed?

NgKristina
NgKristina

@annie_l_lin @TIME Fantastic tie in with the Common Core standards! Now to rally teachers on the ground.

sofimaciasl
sofimaciasl

@rangel_brenda sí eso lleva la OCDE diciendo un rato

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance My youngest sibs R not as prepared as myself & my older bros. This is my personal opinion, not necessarily representing WWP

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance As a young professional, I see so many 20-somethings making crazy mistakes. I'm no $Guru, but I learnt from my errors.

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance I agree that parents shld guide kids, but allow them age-appropriate autonomy w/their $ decisions too. My parents did.

FinEdChat
FinEdChat

@johnhopebryant You served on both Councils didn't you? (President Bush's and President Obama's)

FinEdChat
FinEdChat

@johnhopebryant It was an honor to work on the project. You will be pleased with what we did.

FinEdChat
FinEdChat

@ChristinaHank thanks so much, and thanks for all you do to bring us together on #ohedchat

ThickettFinance
ThickettFinance

@Wheaton_Wealth Finances have become more complex and we need some form of education to keep our heads afloat.

ThickettFinance
ThickettFinance

@Wheaton_Wealth School of hard knocks is an effective teacher. What has been one of the most valuable lessons for you?

johnhopebryant
johnhopebryant

@FinEdChat ...yes sir. Served on both. And partner with President Clinton around same even now.

johnhopebryant
johnhopebryant

@FinEdChat Nice. Shared it. Follow up. :) Keep up the good work. Also sharing with my team. U should know mary.hagerty@operationhope.org

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance Yep! Money is a tool and it's a tool that (often) just makes you more of what you already are (i.e. generous vs. greedy)

ThickettFinance
ThickettFinance

@Wheaton_Wealth Money is only a medium. It has never been the end result. That's why I always ask people what they REALLY want!

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance It's more than any increased complexity, in my opinion, though. Many parents hv given in to the material culture.

ThickettFinance
ThickettFinance

@Wheaton_Wealth Going to be updating it right away to incorporate a little different feel. I've evolved my services offered

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance I have a fuzzy idea, not a clear one, though. Spill it!

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance Love your website...just checked it out. Very #GenY.

ThickettFinance
ThickettFinance

@Wheaton_Wealth Haha do you know why grandparents and grandchildren get along so well?

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance Yes, but I'm afraid I kept them busy *wink* I'm sure that I'll get "payback" when I hv kids.

ThickettFinance
ThickettFinance

@Wheaton_Wealth Sounds like you have good parents that care about you.

ThickettFinance
ThickettFinance

@Wheaton_Wealth Reality is only a perception. Funny how things change when the perception shifts.

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance Yes, I think we should all use our voices to encourage & promote mentorship. It provides a priceless experience.

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance At the time, I resented it. No one else in my entire class (small private school) had to do that. But now I'm glad.

ThickettFinance
ThickettFinance

@Wheaton_Wealth that would have been a rewarding experience that you're still reaping the rewards today

ThickettFinance
ThickettFinance

@Wheaton_Wealth that's why I have so much respect for mentors in my community

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance They even made me go around and raise money (donations) via local biz so I cld go on high school trip to D.C.

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance We had comfortable life growing up (still little sibs at home), but parents made us save 4 "wants" (as opposed 2 needs)

Wheaton_Wealth
Wheaton_Wealth

@thickettfinance School of hard knocks has its uses, but why go thru it if you don't have to?

FinEdChat
FinEdChat

@johnhopebryant Thanks so much, your kinds words and your follow mean a lot. I can assure you I poured my heart into the work.