Educator Toolkit: Financial Literacy

by Diana Drake

Why This Matters Now

April is Financial Literacy Month in the U.S. The Wharton Global Youth Program talks a lot about this concept that means learning to manage money well. Financial literacy is a deep understanding of how money works in the world, including basic concepts like earning and saving, as well as more complex ideas like inflation and compound interest. People who are financially literate are better able to use knowledge and skills to make informed decisions about their finances and manage money effectively throughout their lifetime. We don’t always address why it’s important to understand all aspects of personal finance, from the money in your wallet to the vast network of people and companies who guide, enable and support the financial decisions you make in life. The main reason is that knowledge is power — power that will help students avoid the financial pitfalls that dot the landscape of life after high school, and give them the tools to navigate a system that is not always kind to consumers. While fewer than 20 U.S. states require students to learn about money prior to graduation, we believe that personal finance training should be a priority in all high schools, regardless of socio-economic climate. We recently featured Prakash Koirala, our latest Global Youth financial literacy champion, in the Wharton Global Youth online business journal. As he was considering the lives of his neighbors in Nepal, he said, “I realized it’s all about money. Money drives people into misery and into happiness.” Even the most basic economic knowledge can help students influence the direction of their financial fate.


Conquering the Negative Bank Balance
One of the best ways to get at the essence of financial literacy is to witness blatant financial illiteracy. Wharton’s Olivia Mitchell and AnnaMaria Lusardi of the Global Financial Literacy Excellence Center (GFLEC) at George Washington University are well-known researchers on this topic. Their findings point to a disturbing reality: Financial illiteracy is most pronounced among the young. Visit GFLEC to research all kinds of statistics and reports, but this will likely have less impact on teens than reading about other students like the one in this Global Youth story, whose negative bank balance is a common occurrence because he’s a spender, not a saver. At 22, Daniel Drake is still making poor decisions about money – a course that could have been altered if he had focused on basic money management in high school.

Lesson Plan
Simple Savings Strategies
Financial education is full of small, but mighty messages, and perhaps the most powerful is the sheer practicality of saving money, rather than spending it all. Savings success is often about developing good habits. This Wharton Global Youth lesson written by high school financial educator Brian Page, who can be found @FinEdChat on Twitter, combines GFLEC research with discussion and strategies to help high school students embrace the piggy-bank mentality. In the meantime, keep in mind that our online learning library has more than 100 lesson plans dedicated to all areas of personal finance!

Hands-on Learning
Students will create/design a billboard about the “Impact of Financial Literacy” that could be viewed by drivers in their city or town. Students should focus on one – two main ideas about learning to manage money well. It can be anything, from very specific financial concepts they’ve learned like credit cards, bank loans or budgets, to something more all-encompassing that speaks to the value of developing money skills. They can visit DesignShack for ideas to create an effective billboard. They can choose from one of the following ways to complete their assessment:

  • Draw their Billboard by hand using up the entire space of an 8 1/2 X 11 sheet of paper (it is up to the teacher if you would like it to be larger)
  • Create a digital billboard design
  • Grading: Score on Content/Theme, Neatness, On Time, Creativity, Spelling & Grammar

A week or so after the assignment is due, hang students’ billboard designs up around the classroom and encourage feedback, either on paper or through discussion. Whose billboard is the most compelling and why? Have students select the top 3 designs. Replicate them to hang up around the school as champions of the financial literacy movement in your community!

Video Glossary
Provide an extra layer of learning for your students with our video glossary. Here, Wharton professors define terms: Budget, Compound Interest, Consumer, Debt, Interest Rate and Financial Services.

WGYP Quote of the Month
“Each of us needs to understand the workings of money, as well as how to earn, save, invest and spend it wisely.” – Ajeya Shiva, Bronx High School of Science, New York City

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