Financial Literacy for K–12: How to Incorporate "Money Talk" into the Classroom

Ensure you address the all-too-important “money talk” with your K–12 students. 

“But why do we need to learn this?” That all-too-common question echoes through many schools across the country. And teachers have perfected their responses: You’ll need this in your career. It’ll make you a better person. Because it’s on the test.

How many lessons taught benefit all students? One subject in particular is taking the US by storm– financial literacy. And for good reason.

What is financial literacy and why is it important?

Financial literacy is a common term, but what does it actually mean? The President’s Advisory Council on Financial Literacy defines personal financial literacy as “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.”

It’s important to note that personal finance is a life-long journey, and by consistently learning money lessons throughout life (hopefully proactively ones), people can approach financial decisions with confidence and clarity.

We need to empower future generations to be more prepared and educated on finances than adults today. Why? Because money (and the lack thereof) is significantly affecting people. With only 32% of adults maintaining a household budget, it’s no wonder that half of Americans are “concerned, anxious or fearful about their current financial well-being.”

Here’s some more staggering money metrics:

• 29.2% of Americans don’t save any of their income.
• As of August 2020, 21% of U.S. adults had no emergency savings.
• Credit card loans reached $820B at the end of 2020.
• Of $1.54 trillion in U.S. student loan debt, women hold nearly two-thirds of the debt.
• 54% of student loan holders didn’t attempt to figure out their future monthly payments before taking out their loans.
• ⅓ of Americans have never saved for retirement
• 41% of divorces are caused by financial trouble.
• 48% of married couples argue over money.

It’s therefore crucial to start having money talks with kids at an early age to mitigate financial problems and learn how to use resources effectively.

Are you ready to incorporate (or refresh) money talk in your classroom? Read below to learn what it looks like and best practices to do so.

What it means to be financially literate as a student

Most students aren’t juggling mortgage payments, electric bills, and hospital care like their adult counterparts. Financial literacy therefore looks a little different for kids and young adults.

According to Financial Literacy 101, financially healthy students share three traits. Unsurprisingly, all of these characteristics and executive functioning skills are practiced throughout the school day.

1. They are informed. As expected, students who learn about financial planning are better equipped to budget, save, invest, and use their resources. Being informed about finances and choices actually starts with something simple: knowing how much money you have. For an elementary student, this may look like counting coins in the piggy bank once a month. For high school students, that could be checking bank statements to ensure paychecks are deposited. By keeping track of money, no matter how much they have, students will be better empowered to make financial decisions in the future.
2. They are organized. Money organization comes in two forms. The first is the physical organization of it. Where are kids storing money from allowance, gifts, and work? Having one spot– whether that’s a savings account or an envelope– will help students keep track of their money. Next is organizing and monitoring how money is spent. Is all money invested or put into savings? Is it split up into savings and spending piles? Or is it all spent in one swoop?
3. They think about the future. As stated above, many students don’t take monthly payments into consideration when taking out a loan for college. When students take time to consider future financial situations, their decisions about college, career, and future debt levels are made with transparency and confidence.

How to incorporate financial literacy in your classroom

Looking to incorporate money talk in your classroom but don’t know where to start? Check out our easy-to-adopt suggestions below.

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 to students.

While there are many programs to support student financial literacy, Forbes suggests starting your research with the following four:

1. Financial Literacy course on Methodize from Method Learning (integrated to Xello): A comprehensive financial literacy curriculum with multimedia lessons, quizzes, and modules covering everything from Everyday Finance for Young People to Retirement and Financial Legacy—all seamlessly integrated into Xello. The program is designed with the classroom in mind and offers a full set of reports for teachers to track usage and performance.
2. Money Smart: A financial educational program by the Federal Deposit Insurance Corporation, offers an age-appropriate curriculum and continues to add new games and lessons to its portfolio.
3. Banzai: A free financial and life literacy platform that provides lessons, tests, articles, coaches, and other resources.
4. Financial Football: An interactive game created in partnership with Visa and the NFL.

Remember that when you’re searching for a new curriculum, 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 with any skill, kids need to put what they’ve learned into practice.

Luckily, embedding hands-on practice is easy, as money — and the practice of spending, budgeting, and saving– is everywhere.

Some examples include:

• Open a classroom store and make kids a part of it. Walk students through your store budget (whether it’s $10 or $50) and have them research items to buy. Hold a discussion and vote– Is buying two water bottles a good choice? Or would it be smarter to buy bags of lollipops and some bookmarks? Was anything on sale? Next, set varied prices and determine how students will earn their “money” to purchase items on particular days. Some students may need help understanding saving up for a particular prize. Through all steps, financial literacy and communication is emphasized.
• Extend your financial literacy curriculum. For example, Junior Achievement USA not only has a curriculum about the stock market and investing, but schools can also participate in the JA Stock Market Challenge competition event.
• Have students plan for their future. What’s more real than planning for your future? Have students choose their dream job and research their annual salary. With that in mind, students must practice the art of budgeting when planning for the rest of their future. Walk students through the decisions they’ll have to make – housing, buying a home and car, bills – and have them find these items accordingly. The final step is students presenting their future lives to the class. Conversations will naturally occur about surprises along the way. This extended activity can be differentiated for age and needs (adding investing and credit cards, or keeping it simple).

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 know that it’s not solely 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 past the four classroom walls.

Need help getting started? Begin with a letter home explaining the importance of financial literacy at any age. Kindly provide suggestions and resources to help parents talk money with their kids.

It’s critical to include:

• Having conversations about money. Talking about money can be difficult for adults, but having honest conversations with kids about the cost of college is so important in order to understand what’s beyond their means or would cause financial distress. Recommend parents to examine net cost calculators and assess what the family is capable of paying when it comes to college. This should include having them participate in the FAFSA process and researching options for merit and need-based aid and scholarships. It’s critically important that kids understand the true cost of a college education and what is realistic for their families. 
• Earning an allowance. While some kids receive a weekly allowance to practice budgeting skills, it’s even more powerful to make them earn it. Ensure that kids understand the concept of cost of living. Whether it be in the workforce during or after high school or as a college student. Parents should work with their children not only on a family budget but also to help them manage their own personal budget and understand what they need to provide for themselves. This may include making investments in skills that can pay off for them in the long term. 
• Saving as early as possible. Encourage parents to include their children in the savings process and create awareness of the resources available to them like 529 and Roth IRAs. It’s not too early for them to understand what they are and how they will impact their ability to create financial security in their lives. Work with them to forecast how much they will want to save and help them set monthly and annual goals for them to attain. And when they accomplish those goals, don’t forget to celebrate their success. 
• Creating awareness around college and careers. Financial literacy and future readiness go hand in hand. While most educators have college and career readiness (CCR) programs woven into their curriculums, parents might not have the same access or awareness. Involve parents in your CCR programming where you can and help them make the connections between financial literacy and college, careers, and life.

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.

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Note: This article was originally published in March 2022 and has since been optimized to include insights from our partners at Method Learning. Learn more about our partnership with Method Learning, including their Methodize platform for ACT/SAT Test Prep and Financial Literacy courses, in this webinar.

About Method Learning: At Method Learning, we have one goal – to help your students achieve more academically. Since our founding nearly 25 years ago, we have worked tirelessly with districts and schools across the country to provide comprehensive test prep solutions, academic achievement curriculum, financial literacy, and college advising services. Our state-of-the-art programs are designed to help students reach their potential by creating the foundation for a lifetime of learning. Our partnership with Xello dates to 2016 and has allowed us to bring our Financial Literacy course and test prep programs to hundreds of schools and help students prepare for a successful college journey.