Schools Should Teach Financial Literacy

Schools Should Teach Financial Literacy

In third grade, I traded my desk mate a highlighter for his used ChapStick, cut off the top with a paperclip, and then flipped the “new” ChapStick to another kid in the class for $1. While somewhat unorthodox, this was my first real introduction to personal finance. That $1 meant I got a cinnamon sugar churro at snack time and my parents got a slightly alarmed, albeit funny, phone call from my teacher. That experience ended up teaching me more about business than the next decade of school, and coincidentally, my first “big girl” job was as a trader on Wall Street, this time buying and selling stocks instead of highlighters and ChapStick products.

As an adult, I often find myself in conversations with friends about what we haven’t learned within the four walls of classrooms. Things like taxes, opening credit cards, budgeting, salary negotiations, student loans, and buying a home. What do all things have in common? Money. It surprises me that personal finance is not required as part of the US federally mandated curriculum, especially given the number of people who want it.

Despite how scary the world of finance can be, it doesn’t have to be that complicated. TikTok creator Allera Padgett went viral last year for her video showing how she taught her kindergarten class about money. In his classroom, students have jobs that pay them, and they can also get bonuses for doing homework and tests well. However, they can’t keep their entire paychecks—they have bills to pay! They pay rent for the classroom and seating, but can spend their extra money on meals at the class store.

If you implement an approachable learning system early, it increases students’ financial curiosity by introducing them to scenarios they will face in the future. How do you prioritize bills after you get paid? What happens if you want to buy, and you don’t have enough money? Is it possible to earn money in a passive way? These scenarios encourage students to ask questions, which can prompt discussions about more complex topics like budgeting, saving, and investing.

Woman holding children in my first piggy bank
A woman holding a piggy bank.

Francis Dean/Corbis via Getty Images

And money affects children! Studies show that “adolescent financial literacy is positively related to asset accumulation and net worth at age 25.” Conversely, low levels of financial literacy are associated with negative credit, higher borrowing rates, mortgage delinquency, and home foreclosure. The data is clear that when children learn about wealth management, they are more likely to have it.

But whose responsibility is it to teach children about money? Without a federal mandate, schools are not required to offer financial literacy classes. If students aren’t lucky enough to have teachers like Allera Padgett, or guardians who teach them money skills, they don’t have many places to go. So where do curious children go to learn this information? The same place they go for literally everything. The internet. In particular, a young person’s favorite platform—TikTok. While I’m definitely not suggesting teachers let their students scroll through TikTok during class, I would encourage teachers to think of TikTok as a resource, and adapt the content to class exercises. in real life.

Recognizing the role technology plays in students’ lives is important. Teachers who embrace technology are able to engage their students, and create a more memorable learning experience. However, social media for learning is not fool proof. While social media can be home to thoughtful, helpful content, there is a lot of misinformation circulating. If teachers know that their students will look to short-form videos for help, they can create a repository of resources that they themselves check are accurate and safe for their students.

But it’s not entirely fair to put the burden of teaching financial literacy on teachers, especially when they’re not hired to do it. Without sounding cliché, financial literacy really does take a village. As parents and families, we need to encourage healthy behaviors such as talking about money, budgeting, paying bills on time, and saving for financial goals. Even if we ourselves feel less confident in our financial journeys, the internet today provides unlimited resources to help us and our children become more knowledgeable about money.

While financial literacy itself is important, it is also important to teach critical thinking skills, ethical decision making, and responsible consumption, as these factors affect day-to-day decision making as these students become an adult. Whether it’s through fake money in the classroom, TikTok, or just chatting at the dinner table—any attempt at financial education is better than nothing.

If we meet students at their level and take care of their interests, the journey to financial stability can start as early and as exciting as trading a highlighter for a ChapStick.

Vivian Tu AKA “Your Rich BFF” is a debut from the New York Times bestselling author, former Wall Street trader-turned-expert, personal finance educator, public speaker, and entrepreneur.

The views expressed in this article are those of the writer.