Key Information to Design Financial Literacy Programs for Kids

Financial literacy programs for kids have the benefit of being able to help shape positive money habits in children before they get started down the wrong track. Many factors influence a child’s financial behaviors, and these stimuli can have powerful impact down the road.

First, there’s the child’s family situation. Most kids come into the world as part of a family, and that family has unique financial circumstances. Some families have lower socio-economic positioning, which may mean the children will encounter certain challenges. But even high-level socio-economic status doesn’t necessarily mean the parents are smart with their finances. There’s a chance for programs to intervene before the kids pick up bad habits.

Second, financial behaviors start building at a young age, and a kids financial literacy program should consider how to help them avoid the pressures of marketing. Just think about how much advertising to which children are exposed. For example, food industry ads that specifically target kids and youth have been connected with the increase in childhood obesity, according to the American Psychological Association. https://www.apa.org

Third, financial sentiment comes into play. “Financial sentiment” refers to one’s feelings, attitudes, beliefs, and relationship with money. Personal finance is an emotionally charged subject, so teaching kids about money well requires addressing emotions. Helping kids develop positive financial sentiment involves teaching them key skills that build their self-confidence and increasing their understanding of how money can work for them, instead of against them. For example, you might get kids started toward a lifetime of saving using this guide.

Fourth, consider how few financial literacy programs for kids actually are being presented at school. Most people never receive financial education, and less than 17% of public school students are required to take personal finance training. That figure just indicates how much room for improvement is available.

Base Financial Literacy Programs for Kids on Developmental Level

Children learn in stages based on their cognitive development. That means a kids financial literacy program should focus lessons and activities in ways that optimize learning at each level. One theory that helps clarify this breakdown is Piaget’s Theory of Cognitive Development. Formation of cognitive skills takes place at the pre-operational, concrete operational, and formal operational levels. Different approaches to teaching can be valuable at each phase when you set about teaching kids financial responsibility.

When kids are 2-6, have them move around a lot, play games, look at visual representations, and manipulate objects with their hands. Increase the complexity of the problems to challenge children over time. These all are useful techniques to promote learning at this pre-operational phase.

When kids reach ages 7-11, present them with questions and puzzles that require logical analysis and solutions – cognitive skills of logic and concrete thinking are developing during this concrete operational stage. They are beginning to understand relational comparisons like levels of mass or volume, which can help them grasp the relative value and purchasing power of money.

At age 12 and up, teamwork becomes a useful technique to get lessons across. Have students work together on project-based learning activities, case method problems, or brainstorming solutions.