5 Components to Teaching Financial Literacy in Elementary
With the swipe of the card, kids today may rarely see adults hand over physical money at a register. Kids learn how to count money in school, but making a real-world application can be difficult, especially when children do not see the money disappear across the counter. With our “buy it now” society, or “return it, if we don’t like it” attitude, it is imperative that our students understand the difference between wants and needs, know the importance of saving and budgeting, and understand consumer responsibility.
Why Teach Financial Literacy?
As educators, we play a role in our student's lives that can have a life-long impact. I taught first grade for 5 years, and each year I made a point of teaching financial literacy. There are five important components that I believe our students need to grasp in order to be financially literate.
1. Wants and Needs:
Have you ever read the Bernstein Bears book, The Bad Case of the Gimme’s? Well, in this book the children continually beg for toys and goodies at the store. They think they need all of those things to be happy. When we teach our students about wants and needs, they have a better understanding of the essentials that we need to live, and the things that we hope or desire to have, but don’t really need. With all the ads and commercials targeted at children, this is one important component to not overlook.
2. Goods and Services:
How do people make money? By helping people. When someone provides a service, like a mechanic, for example, they help the owner of that car travel safely. Due to the invention of the microwave, we are provided with a way to cook our food more quickly. Goods and services help people.
It is essential for our students to understand that when an adult goes to work, they are helping someone else and that in turn is returned with income. Even a child is able to earn money, and I like to provide my students with the opportunity to brainstorm ways they can earn income.
3. Income, Saving & Budgeting:
When I was a kid and had birthday money, I often spent it immediately which led to regret. Kids don't naturally set limits for themselves--that is something that is taught. And many money advisors today say that if you don't tell your money where to go, it will just go. Allowing students an opportunity to set goals, think of ways they can earn income, and create a savings plan is an important piece of building financial literacy.
4. Consumer Responsibility:
What if a child uses a toy irresponsibly and it breaks, can they return it? Consumer responsibility is often a life skill that is overlooked. Let's teach our students how to be responsible consumers.
Do our students know to inspect an item before purchasing it? Do they understand why products have labels? Bringing awareness to this concept is a critical life skill. Check out this FREE download of my Consumer Rights and Responsibilities Reading Passage.
5. Real Life Application:
I like to use scenario cards because students have an opportunity to share out what they would do in a situation. Sometimes there is more than one correct answer, however, a student could come to the wrong conclusion if they are not careful. I also love an open discussion. Sometimes students can speak from personal experience, and that alone can speak volumes. To implement this in your classroom, check out this FREE download of my Consumer Rights & Responsibilities Scenario Cards.
Want to cover financial literacy but don't have a lot of time to prep? All of these concepts are covered in my Primary Economics Unit, which is perfect for building financial literacy in the elementary grades. This unit includes PowerPoint presentations, real-life application scenario cards, a student booklet, center activities, and much more!
