Teaching Finance Every Day
Posted by AdminLinkEd
January 27, 2009, 4:15 pm
In this turbulent economic time, financial literacy is a topic that seems to be on a lot of teacher’s minds. So, this month we want to share some great tips from Elissa Kline, Co-Executive Director, Cents Ability. Cents Ability is a nonprofit organization whose mission is to empower New York City high school students to achieve their goals through prudent and informed management of their financial resources. The nonprofit started in 2004 and has worked hard with a number of schools to develop a strong financial literacy curriculum which they are going to share here. So teachers/parents, read on for some great tips on how to engage your children in financial literacy every day.
Given the current economy, what is the most important financial lesson for a student to know?
This is kind of simplistic, but you need to be aware of what the banks are offering you, what a credit card is really offering you, what the terms are, and what the terms of a mortgage are. You should know what the fine print means and definitely never sign anything if you don’t really understand it. You can see the effects signing-without-reading has in the current mortgage crisis: people didn’t really understand what the fine print said. You need to understand what you are getting into.
What are 5 quick things parents/teachers can do to engage their students in financial literacy everyday?
#1: What is most important (and is missing from a lot of families) is that parents need to talk to their kids about their own finances. Kids should know what the family’s mortgage payment or rent is to give them an idea of what is realistic. They should know what a cell phone costs. Many college students even come to school not knowing what things cost. I realize money is often an awkward subject for families, but kids need to understand what you (the parents) are doing to save for retirement, what you are using for credit cards and why you use credit cards. Talk about these issues.
#2: Have your child make a budget. A lot of kids get $20 a month or a week and they should track this in a budget. What we find in our program is that many of them just don’t know how much they are spending and where it is all going.
#3: As parents, you can take your kids to the bank and open up a savings account for them. Get them familiar with what happens at a bank and show them it’s not a hard process to go through so that they are prepared to leave the house one day.
#4: Teach children the connection between working and spending. It is great to give them chores around the house that they get paid for and shows them that they need to work to get an allowance. Many of the principles we talk to are concerned that there is a population of students in NYC who don’t have parents with jobs, so they don’t have a role model that can show them the connection between working and earning money. To set them on the right path, it’s important to instill in your children/students the concept that working leads to money.
#5: Have a dialogue in the household about current events. They are definitely hearing things in the news, so do whatever you can to keep your kids engaged about what is going on. Open up the dialogue and you can have really fun conversations.
Where can teachers find lesson plans or curriculum for financial education?
We adapted our curriculum from NEFE (National Endowment for Financial Education) and you can sign up to get their materials at their website www.nefe.org.. JumpStart Coalition for Personal Financial Literacy also has general resources about financial education. Cents Ability is also interested in training teachers on our curriculum. If interested in setting up a class, email development@cents-ability.org or if you want to go to a training session, you can see the training sessions on the www.Cents-Ability.org home page.
What are the most useful financial literacy teaching methods?
Always try to keep the students engaged with exercises. One of the exercises we use is the lemonade stand: There is a lemonade stand that makes $1000 per year. How much would you be willing to spend to buy this business? The goal of the exercise is to see how businesses actually get bought and how to value a business. At the very end of the course we have students come into the classroom with the stocks they want to buy and why. Nothing we do is a lecture; strictly hands on workshops. The students make a goal and make a budget for the course and throughout the sessions we keep them engaged in conversation applicable to their lives. Additionally, we found it very important to have volunteers who work in the financial industry bringing real world knowledge to our classes.
Are there any ways you are changing the Cents Ability curriculum to adapt to the current economic crisis?
We have people teaching the classes that are experiencing the crisis firsthand, which allows students to really ask detailed questions; they’re curious! We always cover topics important to these times (loans, etc), so we haven’t had to really change our curriculum, but we are seeing a change of questions asked by the students. They are asking more questions about the stock market. No class is the same. Students are asking questions about a particular topic and we may get off track to dig into the question, but it’s important to focus on the issues that the students really want to hear.
What does a parent/NYC teacher need to do to bring Cents Ability to their classroom?
It is free, so there is no cost associated with the program. All people need to do is introduce us to their principal. Just email us at development@cents-ability.org and we will send materials and work with you and your principal to move forward with bringing our course to your school.
