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Financial Literacy Guide: A Crash Course for Students
Understanding money is crucial for effective money management. This includes understanding the value of money, how to perform money math, and how to save money. Students should begin learning money skills in the earliest grades for a comprehensive money education. Kids can start by learning the values of the coins and how to add and subtract them before they move on to more complicated material.
Teachers should introduce the basic concepts of money to the youngest students. Generally, students will be introduced to coins and currency first so they can recognize items and know their value. Lesson plans may include activities, games, and projects to give students many different ways to learn these concepts.
Everyone has choices to make, even the youngest children. When children are given the freedom to make simple choices, they learn important skills. Kids can learn valuable lessons about how to make money-related decisions. Games and activities offer both entertainment and opportunities for learning to make spending decisions.
Simple spending plans are not out of reach of even preschool learners. By learning these skills in early childhood, students are more likely to adopt responsible money management behaviors that will continue into adulthood. Introduce the concepts of saving, spending, and sharing as they relate to money. Kids should also learn that money is a limited commodity and needs to be divided to use it for different purposes.
Students need to learn that money is earned to provide for needs and wants. By giving young children small amounts of money to manage, they gain important skills. Children also need to correlate work and money. Introduce children to simple concepts about earning money and how money can help people achieve financial goals.
Money is essentially a medium of exchange for goods and services. Coins and bills have different appearances and values, and children need to learn the names and values of the coins and bills. Students must also learn how coins and bills translate into purchasing power. Games and worksheets can help children learn and experiment with these concepts.
Students in grades three, four, five, and six are generally ready for more advanced financial literacy concepts. Use both lesson plans and activities to help students translate their understanding to real-life applications. If students can have opportunities to manage money, they'll also gain valuable experiences and skills.
Students in this age group will benefit from receiving a regular allowance. Managing this small amount of money can help them learn to divide their funds into save, spend, and give categories. Students should also be encouraged to record how they spend their allowance. Creating a budget is also helpful.
Recording how money is spent is part of money responsibility. Students should calculate how much money is available, how much has been spent, and how much money needs to be saved. Managing money is closely intertwined with record-keeping, which can teach important skills, too. Worksheets can help students practice these skills.
As students plan to save money, they should be given options. Depositing money into a savings account is one way to save money. Introduce the concept of saving and investing money for future use, possibly for college or for retirement. Teach students about investing money to have it grow for future spending. Kids should also learn about financial risk and rates of return as they explore investments.
Comparison shopping is part of being a smart consumer. When they're faced with the need to make a purchase, students need to know that it's wise to compare products and services to find the best option. Scrutinizing advertising is another component of comparison shopping. Students should also explore the differences between needs and wants so they can make wise purchasing decisions.
