Ontario teachers, there is something that we need to talk about. When reading Facebook posts asking for “financial literacy activities”, I am seeing many suggestions for ”million dollar” or ”dream home” type projects. But here is the thing: financial literacy and money are not the same thing! Of course, buying things is a part of financial literacy, but it is so much more than that.
Financial literacy – WHAT IS IT?
Financial literacy is the ability to understand money situations. It literally means being literate (being able to read and understand) in financial choices.
In my opinion, financial literacy is the most valuable thing that Ontario added to the new curriculum. Students get to learn skills that they can not only benefit from in their future, but also right now! Simply giving students a game where they have to spend a million dollars, is not fully doing the unit justice. Don’t get me wrong. This is a fun activity for students and I give my students a similar math, media and writing entrepreneurial project (also spoken about in this end of the year activities blog). But this can not be the only way to “meet” the financial literacy expectations.
Some important aspects of Financial literacy that are being missed
Earning and saving money
Students can start to earn and save money right now. As fun as having a million dollars to spend would be, how many of them (or us for that matter), need that skill in their lives right now?
Taxes
We all know that there is no escaping taxes. We should teach students early why they can’t buy a five dollar item with a five dollar bill. As well as, how to calculate tax so that they know how much their purchase will actually be. Of course there is also submitting taxes, but we will leave that for another day, when they are a bit older.
bank account choices
Knowing how to choose a bank and learning about interest rates, teaches students why saving in a bank account is better than in an envelope in the back of their closets (where their baby brother could find it).
Interest
Our kiddos need to learn and understand about the bad kid of interest too. They need to know that using a credit card can be fun because you earn points and don’t have to pay for a while. However, the consequences of an unpaid bill and compound interest will eat away at all of your hard earned money.
Financial Decisions
Ultimately, kiddo need to understand what makes a good financial choice and what makes a poor one. Providing students with financial scenarios will help with this, so that they don’t waste all of that envelope cash.
As you can see, Financial literacy is SO much more than a million dollar project.
Real FInancial literacy lessons for the win!
With a million dollar project (or the like), we will have a group of students who will be able to pick out the nicest looking Maserati money can buy.
But with teaching real financial literacy skills now, we will raise kiddos, then young adults, who truly understand the value of money- a skill that is needed for their whole lives.
And who knows. Maybe if we do a great job teaching this valuable skill now, years down the road, a former student that you taught about investments and interest rates, will come and gift you that Maserati for being the best teacher ever. It could happen!
