Teaching money management: Integrating financial literacy in K–12 classrooms

Teaching financial literacy is essential for K-12 students, providing them with the skills to confidently navigate their personal and professional futures. 

Teachers play an important role in preparing students for their future. This goes beyond academic knowledge and includes skills such as communication, critical thinking, time management, emotional intelligence, and both digital and financial literacy. 

The importance of financial literacy is well recognized. Eight in ten U.S. adults believe they would have managed their finances better if they had been taught in high school, and its inclusion in school curriculums is gaining momentum. As of 2023, seven states require a stand-alone financial literacy course, and 40.5% of high schoolers were guaranteed to take a personal finance course, up from 22.7% in 2022.

The American Public Education Foundation’s Nation’s Report Card on Financial Literacy provides an assessment of K-12 financial education across the U.S.  The report assigns grades to each state based on the quality and extent of their financial literacy requirements, standards, and curriculum. 

The growing emphasis on financial literacy in education reflects a broader recognition of its importance in preparing students for real-world challenges. 

What is financial literacy and why is it important?

In its simplest definition, financial literacy means understanding money, but it extends beyond knowledge to making informed financial decisions.  According to the National Financial Educators Council, financial literacy involves:

“Possessing the financial knowledge, behaviors, systems, team, and plan to confidently take effective action that best fulfills an individual’s personal, family, and global community goals.” 

By learning about money, individuals can make financial decisions with confidence and clarity. It’s essential to empower future generations with financial education, as poor money management can have significant consequences: 

• 42% of Americans don’t have an emergency savings fund.
• Credit card debt for Americans is $1.211 trillion.  
• In 2024, the U.S. student loan debt grew to $1.773 trillion. 
• 54% of student loan holders didn’t attempt to figure out their future monthly payments before taking out their loans.
• 48% of married couples argue over money.

Introducing financial literacy at an early age can help mitigate these challenges and set kids up for success. When students are taught about money, they understand how to save, budget, make informed decisions, and develop responsible habits. 

Financial literacy for students

Financial literacy looks different for students because they do not have the same responsibilities as adults. According to Financial Literacy 101, financially healthy students share three traits:

They are informed. Depending on the student’s age, financial literacy may focus on grasping broad concepts or understanding specific details related to their personal accounts. 

• Students should understand that banks have fees or know the fees associated with their bank accounts.
• Students should understand the purpose of a credit report or check their credit report to ensure its accuracy.
• Students should understand how interest rates work or know the rates on their accounts.

They are organized. There are two ways in which being organized is beneficial in regard to finances. 

• Students should have a system for where to put their money. This could be as simple as a piggy bank for young children or a bank account for older students. 
• Students should create a budget to ensure they are not overspending. For younger children, this could be as simple as dividing money into savings and spending. For older children, they want to also keep track of any payments they are expected to make. 

They think about the future. Financially healthy students consider their future, evaluating the earning potential of their future careers in relation to their financial decisions in college, especially when taking on student loans. 

How to incorporate financial literacy in your classroom

There are many things you can do as an educator to promote financial literacy.  Here’s the top three: 

Use a personal finance curriculum

Personal finance curriculums save schools and teachers a lot of time and energy by delivering pre-made, evidence-based lessons, and assignments for students.

• Money Smart for Young People –  A financial educational program by the Federal Deposit Insurance Corporation (FDIC) offers an age-appropriate curriculum and continues to add new games and lessons to its portfolio.
• Banzai –  A free financial and life literacy platform that provides lessons, tests, articles, coaches, and other resources.
• Financial Football –  An interactive game created in partnership with Visa and the NFL to teach financial concepts. 
• Khan Academy – A series of videos and exercises on banking budgeting, investing, and retirement that can be used in a classroom or for individual learning. 

Remember when you’re searching for a new curriculum, to ensure that students of all competencies and abilities can access the materials.

Provide real-world experiences

Teaching personal finance out of a textbook will help students learn the basics, but like any skill, they need to apply what they’ve learned in real-life situations. The good news is incorporating hands-on practice is easy because money — along with the habits of spending, budgeting, and saving–is something they encounter everyday. 

Some examples include:

• Open a classroom store and involve students in every step. Start by sharing the budget–whether it’s $10 or $50–and have them research potential items to buy. Hold a class discussion and vote: Is it better to buy two water bottles or invest in bulk items like bookmarks and erasers? Once stocked, set varied prices and establish a system for students to earn “money” to make purchases on designated days. Some students may need guidance on saving up for a bigger prize. Throughout all the steps, students practice financial literacy, decision-making, and communication skills.
• Extend your financial literacy curriculum with Junior Achievement USA. Not only does this organization have a curriculum about the stock market and investing, schools can also participate in the JA Stock Market Challenge competition event.
• Have students plan for their future by choosing their dream job and researching its annual salary. With this figure in mind, guide students through the process of budgeting for various life decisions, such as housing, buying a car, and paying bills. The final step is for students to present their future plans to the class, sparking conversations about  unexpected challenges along the way. This activity can be adapted for different age groups and needs by incorporating complex topics investing and credit cards or keeping it simple.
• Partner with local banks to give students the experience of opening a checking or savings account. This will help them learn how to manage their finances and understand how fees and interest affect their money. 
• Introduce students to the stock market in a simulation where they can “invest” in stocks and learn the principles of trading stocks without using real money. 

Get parents on board

Incorporating financial literacy into lessons may feel like one more thing on your plate, especially since 69% of parents admit they are reluctant about broaching the topic of finances with their children, but you should know that it’s not entirely teachers’ responsibility to help kids navigate their finances.

By partnering with parents, educators can provide interactive lessons and wrap-around support so that money talk extends beyond the classroom. 

Begin with a letter to parents explaining the importance of financial literacy at any age. Include suggestions and resources to help them start meaningful conversations about money with their children.

It’s critical to include:

• Conversations about money. Talking about money is essential, especially when it comes to the cost of college. Encourage parents to use net cost calculators and assess what the family can afford. Involve students in the FAFSA process and research merit- and need-based aid and scholarships. It’s crucial that students understand the true cost of college and what is financially realistic for their families. 
• Earning an allowance. While weekly allowances can teach budgeting skills, it’s more impactful when students earn their own money. Help them understand the cost of living, whether through part-time work during high school or as a college student. Parents should guide their children in managing both family and personal budgets, emphasizing self-sufficiency. This may also involve investing in skills that will pay off in the future. 
• Saving as early as possible. Encourage parents to include their children in the savings process and introduce them to resources like 529 and Roth IRAs. It’s never too early for them to understand these tools and how they can contribute to long-term financial security. Help students set monthly and annual savings goals and celebrate their success when they achieve them. 
• Creating awareness around college and careers. Financial literacy and future readiness go hand in hand. While most educators integrate college and career readiness (CCR) into their curriculums, parents may not have the same access or awareness. Involve parents in your CCR programs and help them connect financial literacy with college, careers, and life planning.

Coming soon to Xello: The Real Game

The Real Game, which will offer students the opportunity to see how their life choices shape how they live, will be available to Xello students in grades 6 to 12 as of the 2025-2026 school year.

The original version of The Real Game came out in 1994, earning international acclaim for helping students build real-world skills through immersive role play.  Xello kept the best concepts of the original game and completely modernized the user experience to engage today’s students and prepare them for life after school. The game teaches students financial literacy in a dynamic, interactive way that shows them how factors like their choice in career, housing, taxes, savings–even deciding to have a pet–can impact their lifestyle and financial health. The Real Game gives students a glimpse into navigating actual adult decisions and choices about money. 

A beta version of The Real Game was piloted in Florida in 2024, and both educators and students responded to the game with resoundingly positive feedback. Educator Kira Rossin shares, “My students now have a wonderful platform to access SO many helpful resources. I think the true game changer though was students now having a feed of helpful tips like money matters, life skills, world of work, and so much more! Xello has truly become a game changing platform in education.”

If you are interested in being one of the first to see The Real Game in action, click here to join our early access list.

Investing in financial literacy = investing in our future

If you haven’t already, it’s time to embed money talk into your classroom. By doing so, you’ll be introducing real-world concepts, boosting their financial confidence, and practicing skills that benefit them now and in the future.