When today’s students leave high school, many will face significant financial challenges. Rising tuition, a strong likelihood of student debt and a tough job market will make starting out no easy task. To successfully meet these challenges, students need to be prepared with personal finance knowledge and the ability to apply this knowledge in real life. In other words, they need strong financial literacy. And the classroom is the ideal setting for this type of learning.
Why Teach Personal Finance in School?
Financial literacy is included in the curriculum of only a handful of Canadian provinces, but it’s an essential life skill that most Canadians lack, regardless of their age.
According to a new study by the Investor Education Fund (IEF), Ontario’s high school students lack the basic financial skills they need to navigate everyday life. Only four in ten (39 per cent) feel somewhat or very prepared to manage their money after leaving high school. While students say post-secondary education is their biggest financial concern, they also list clothing, entertainment, technology and gifts as their top saving priorities.
The study also shows that students aren’t learning financial skills from the adults in their lives. An overwhelming majority (90 per cent) say they look to their parents to learn about finances, but parents seem ill-equipped to model good financial behaviour themselves. Previous IEF research has found that only three in ten (29 per cent) Ontarian adults achieve a passing grade on their level of financial literacy.
Students aren’t learning the money skills they need at school, either. IEF’s high school study found that seven in ten (69 per cent) students believe their school should provide them with information on managing money, but only one quarter (26 per cent) think their school is doing a good job in this area.
Helping Teachers Inspire Financial Learning
Since 2000, IEF has developed tools and programs to help students better prepare for the financial realities of adult life. We’ve delivered free financial literacy workshops to more than 10,000 teachers in Ontario and helped countless students as a result.
At IEF, we believe that to make a complex subject like personal finance meaningful, we have to design education tools that meet different learning needs, speak to students in their language and make personal finance relevant to decisions that students will likely need to make in the near future.
Last year, IEF was instrumental in working with Ontario’s Ministry of Education to include financial literacy in the curriculum for Grades 4 to 12. To help roll out those changes, IEF has partnered with the Ontario Institute for Studies in Education of the University of Toronto (OISE) to create approximately fifty new financial education lesson plans that can be integrated with a wide variety of subjects.
Although they’re designed to fit the Ontario curriculum, anyone can access the lesson plans and other IEF education programs throughwww.InspireFinancialLearning.ca.
Here are some ways to make money meaningful in the classroom:
1. Give financial concepts real-life relevance.
One of the most important aspects of financial literacy is the ability to translate abstract concepts into tangible outcomes. For example, everyone with a credit card should understand the dollar consequences of carrying a balance over time.
One elementary lesson plan developed by IEF is called “My furry friend” and examines the costs, responsibilities and benefits of owning a pet. The activity is designed to be delivered as a math lesson, but appeals to the common childhood desire to have a pet and is easy for students to engage with.
A secondary lesson plan that fits into the business, guidance or family studies streams is an activity centred around budgeting at different life stages. In the activity, students identify how personal needs and wants may change over a lifetime, and calculate expenses one might incur as a young child, teenager, young adult, older adult and senior.
2. Teach through mistakes.
Everyone learns from mistakes, and IEF’s new curriculum resources feature scenarios that include a character named Bill Fold, who constantly gets himself into financial scrapes. In one scenario Bill loses his wallet, which opens up a discussion about the history of currency, online security and how the evolution of e-commerce affects policy and law. This lesson plan is designed to fit a history or business class.
3. Take finance beyond the domain of business and math.
Financial education has historically been associated with business and math, but this approach leaves out a broad segment of students with different interests and skills. IEF’s lesson plans can be integrated into subjects across the curriculum, including history, geography, English and creative arts.
One relevant example is an elementary visual arts lesson that has students make a wallet out of duct tape. The activity focuses on creating a tangible object but opens up a discussion about organizing your finances. As students create the various pockets for credit, debit and gift cards and cash, teachers can discuss the different forms of payment and how they work.
4. Laugh and learn
Laughter may be the best medicine, but it’s also an effective way to break down learning barriers. IEF co-sponsors the Funny Money program, which teaches senior high school students about saving, budgeting, debt management and investing through school assemblies. Presentations are delivered by nationally- recognized stand-up comedians, who use real-life scenarios that students can relate to. They even give away loonies and toonies to help reinforce learning. Funny Money is delivered nationally in English and French, for free. Lesson plan toolkits to complement the presentation are also available through www.GetSmarterWithFunnyMoney.ca.
Teaching financial literacy in schools is one of the most effective ways to ensure that the next generation has the skills they need to navigate an increasingly complex economy. That some provinces include it in the curriculum is a positive step, but to make a significant difference, much more must be done. You have a vital role to play, and IEF can help.
ABOUT THE AUTHOR
Chris Allum is the Investor Education Specialist at the Investor Education Fund (IEF), a leading not-for-profit authority in financial literacy, education and research. She has spent more than a decade working with educators to integrate personal finance into the curriculum.
This article is from Canadian Teacher Magazine’s Sept/Oct 2012 issue.