Financial Literacy Lesson Plans for Kids Teach Critical Evaluation Skills
The National Financial Educators Council (NFEC) has developed a complete line of curriculum packages to teach personal finance skills to all ages. Their financial literacy lesson plans for kids are designed to instill practical knowledge that will translate into positive money habits as the young people mature. Budget evaluation is one of the key skills children are encouraged to learn and practice in this age-appropriate curriculum.
Research has shown that teaching kids about money in a developmentally appropriate manner involves relating concepts to easily recognizable things in the children’s day-to-day lives. The NFEC curriculum does this in the budget evaluation section by explaining income as the amount of money you earn for doing your work. For example, you might earn money for cleaning your room.
Next, the lesson guides kids to an understanding of income taxes, including federal, state, and FICA. Children learn some of the things tax money pays for—such as helping retired people or paying for wars—and the curriculum notes that they may like some of these things, while others they may not like. All these ideas encourage critical thinking, stemming from the philosophy that financial literacy for kids needs to make sense to them on a practical level.
To further set up the building blocks kids need to evaluate expenses and write budgets, the NFEC curriculum covers gross pay, net pay, loans, fixed expenses, and variable expenses. Again, the program relates each concept to examples from kids’ day-to-day lives, such as telephones and food. Then the program teaches the basics of the evaluation process, including mention of how a financial coach can help a person evaluate his or her budget, in exchange for a fee.
This example of methods for teaching kids personal finance illustrates the NFEC’s commitment to a world where everyone becomes prepared to confidently make money decisions that improve their lives.
Financial Literacy Lesson Plans for Kids
When you think about financial literacy lesson plans for kids, you probably think about budgeting, savings, loan applications, credit and debt, and maybe even retirement planning. But have you ever considered that kids also need to learn about risk management?
In its recent publication, Family Money Talks, the National Financial Educators Council (NFEC) addresses financial literacy for kids from a practical perspective. Risk management is one of the ten most important money topics they suggest that parents discuss with their children.
Parents are encouraged to share with their kids the definition of risk: something that exposes us to danger or harm. For example, if we walk into the street when there’s traffic, we run the risk of being hit by a car. What can we do to reduce risk in our lives? One thing we can do is buy insurance from an insurance company. Then if we have a car accident, the other party can’t sue us. But if we don’t have insurance and get in an accident, we run the risk of being sued and having to pay damages until they’re paid off.
This risk management lesson is a good example of the financial literacy curriculum for kids developed by the NFEC. The Family Money Talks book is just one piece of a full-scale program that’s available to communities, schools, and parents.
When we bring kids and money management together, we help make children’s lives easier for the future. Just one simple tip, like building good credit, will save an average person tens of thousands of dollars—at least—over the course of a lifetime. When we get behind financial education for kids we help ensure their happiness and success for the future. Studies have demonstrated that children who develop good money habits early are happier, more confident, and healthier than kids who don’t learn about money.