One way to strengthen the Pillar of Responsibility is to exercise financial responsibility. But just like any other kind of literacy, kids don’t just automatically become familiar with financial concepts and good decision making about money. They need help along the way from parents and teachers who can explain the important concepts, and provide examples.
Enter moneyasyougrow.org, a cool web site for teachers, parents, and kids, and a project of the President’s Advisory Council on Financial Capability. The site has suggestions for milestone concepts for kids at each age level, for a total of 20 important concepts. There are also suggested activities to teach and reinforce each concept. Does your grade schooler know what a savings account is, and how earning interest works? Does you middle schooler know that he should save about 10%, or “one dime for every dollar,” that he earns or receives? Does your recent high school graduate know that she should save and have on hand three months’ worth of living expenses, in case of emergency?
The good news is that financial literacy lessons can fit beautifully with academic and character lessons. This may be most obvious for math lessons on interest and other financial concepts. (Consider savings accounts, credit cards, mortgages, and retirement accounts.) But how about social studies lessons on tax policies, Social Security and Medicare deductions, and wage and salary policies? How about English lessons on how to read and make sense of rental car agreements, of leases?
For more ideas, check out this recent radio call-in show episode on how to teach financial literacy, from Patt Morrison in Los Angeles. The comments on the web page are interesting and insightful as well.
Finally, here’s the greatest TV dad of the 1980s, explaining financial planning in the most basic terms: