In coming weeks and months, a new set of standards for financial literacy will cross the desks of educators across the country. The hope is that schools will embrace these guideposts and begin to wedge money lessons into students’ daily activities.
The Council for Economic Education, a nonprofit promoting financial education, developed the new standards at the request of and with input from educators at all levels. “We have a specific plan to go state by state and get these implemented,” says Nan Morrison, CEO of the council.
The new standards, to be formally unveiled next month, establish clear benchmarks for what kids should know by the end of grades 4, 8, and 12. They are broken into six personal finance categories:
- Earning income. This includes collecting rent, stock dividends and bonds. It also includes a discussion of the labor market and how education may lead to higher wages.
- Buying goods and services. This includes planning, comparing, budgeting and making choices.
- Saving. Includes near and long-term goals and how time, rates and inflation affect savings.
- Using credit. This includes borrowing options and how credit history helps determine availability of credit and the rate you pay.
- Investing. This includes risk, rates of return and diversification.
- Protecting and insuring. Includes potential loss of health, assets, income and identity, and how behavior affects the cost of insurance.
The council’s new standards are clear and concise. In the section on saving, for example, the standards state that by the end of 4th grade a student should know that “income is saved, spent on goods and services, or used to pay taxes,” and that students can use this knowledge to “explain the differences between saving and spending and give examples of each.” By the end of high school they should be able to “identify instances in their lives where they decided to buy something immediately and then wish they had instead saved the money for future purposes.”
The standards emphasize developing critical thinking skills as opposed to memorizing rules of thumb. The idea is to teach kids how and why to save—not just that they should save 10% of everything they make. “Financial literacy should be treated as a discipline, not a set of rules to follow,” Morrison says. As the Council explains in its marketing materials: “A systematic approach to decision making acquired in economics permeates virtually all aspects of life.”
The Council’s new standards build on a growing database of age-appropriate guideposts, which includes the Treasury Department’s Money As You Grow website. The Council’s standards augment those established by the JumpStart Coalition for Personal Financial Literacy and the federal government’s effort to infuse personal financial education into the national common core standards for Math and English.
Increasingly, it appears that common sense money lessons will become a part of every student’s education, most likely embedded in courses they already take. After all, how tough can it be to spend a day or even a week talking about debt when discussing the Charles Dickens novel David Copperfield, where a central character (Wilkins Micawber) gets sent to debtors’ prison?
Here at First Financial, we have a few products and services just for kids so they can start saving for their future while having fun doing it!
- First Step Kids Savings Account : First Financial’s unique First Step Kids Savings Account is specifically designed for young people, with a focus on education and fun.*
- Dollars for A’s Program: For every “A” your child earns on their report card, First Financial will deposit $1 into your child’s First Step Kids Account!* It’s a great way to reward your child for doing his or her best in school. It also teaches the life long practice of saving for the future. To earn your dollars, visit a branch location.**
- Summer Reading Contest: Every summer we have a reading contest where First Financial kids up to age 18 can earn rewards for the books they read, along with a great grand prize!
To get your children started, call us at 866.750.0100 or stop into any one of our branches!
*Credit Union membership and Savings Account is required to participate. Members up to age 18 are eligible to participate and must complete an entry form. Reader rewards must be deposited to a child’s First Financial Savings Account. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location. Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties. Winning reader will be contacted by the First Financial Marketing Department.
**Offer applies only to report cards for most recent school terms. Letter grade “A” or 90%+. No back rewards available for prior semesters or marking periods. Available for First Financial members between 1st and 12th grades. Qualifying report cards must be submitted within 45 days from the date of issue. Child must be present and a $5.00 deposit to a First Step Kids Account is required to receive the Dollars for A’s incentive. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location. Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties. As of 12/12/2012, the First Step Kids Account has an annual percentage yield of 0.05% on balances of $100.00 and more. The dividend rate may change after the account is opened.