- 8 March, 2022 //
- Teaching Resources //
- Tags : life skills, teaching resources
- 2 Comments
Most students are required to take advanced math courses at the secondary level, but those courses often fail to teach the basics of personal finance. With credit card use and student loan debt at an all-time high, it’s important that students are aware of how to manage their money.
Budgeting
Help teens create their own budget and hold them accountable for the purchases they make.
Being able to budget is an essential skill. Whether you are managing time, responsibilities, or money, exceeding your available resources will lead to difficulties rather quickly. Help Teaching’s Budgeting Activity leads students on a brief tour of Peter’s life as he tries to reign in his spending in the face of increasing expenses. This worksheet can be used to teach simple finance, the more advanced concept of scarcity, or as a metaphor for key life skills.
Along with the budgeting worksheet, help teens create their own budgets and hold them accountable for the purchases they make. They may not have to provide for their basic needs, but they can budget for music, apps, clothes, fast food, and other entertainment expenses.
Apps such as SmartyPig or iAllowance may also be useful tools when it comes to helping kids learn to budget and handle their money more effectively.
Credit Cards
Teens are being targeted by credit card companies much more frequently than in the past. Being able to understand the impact credit debt can have and the proper way to take advantage of credit are essential skills for any young adult.
It’s important that students understand how to build a good credit history. Use the Narrative Procedure organizer to list and explain the 3 C’s of credit. Use the Cause and Effect chart to display how bad credit decisions can have effect on your life years afterwards.
One engaging way to teach the different uses of credit cards is to compare and contrast different credit cards with a Venn Diagram. Have your students choose one cash back credit card and a card that accumulates miles for travel to see that cards can be beneficial if used properly.
Thirteen.org’s It Costs What?! game and iGrad’s Credit Card Simulator are great ways to run students through credit card simulators where they must choose the best credit card and learn about using credit cards responsibly at the same time. While Frontline’s series of episodes, The Card Game, introduces students to the credit card industry and make the dangers of credit cards clear.
Long Term, High Principal Borrowing
Everyone will need to borrow money at some point in their life, some as early as 17 when they are responsible for student loans to secure tuition for college. Understanding interest rates, payment schedules, terms, and balloon payments are very important to making prompt and reliable payments and not owing more than you can afford. Many websites offer loan calculators to see how much that loan will really cost you.
SaveAndInvest.org offers its own selection of videos and worksheets designed to help teens understand borrowing and the cost of debt.
Investment Options
There are so many ways to grow your money, but many students are unaware of their options. Kids receive saving bonds or use a passbook saving account when they are young, but as they become adults those are not the only viable investment options. Help Teaching has an activity that will start them on the road to identifying investment options that will lead into a deeper research project.
Students can head to TheMint.org, too, to help them learn more about how to start building financial security today. This includes making investments and learning how to manage their money so it can work for them in the future.
Retirement
Students are rarely aware of the tenuous nature of Social Security. They know even less about pensions, IRAs, and 401(k)s. Beginning to save for retirement immediately upon finding a job is extremely important, but that urgency is unknown to teens. A simple but effective KWL chart can be a good introduction to retirement savings. Filling in the gaps of their knowledge can save them a lot of trouble forty years in the future.
Of course, it’s never too early for students to start saving for retirement either. Dave Ramsey’s article on How Teens Can Become Millionaires may help motivate students to seriously start thinking about how money connects to their future.
For more great suggestions on personal finance and other essential skills students need, check out 9 Life Skills Every Teens Needs. So many of us come out of high school barely able to write a check. Going through these concepts in personal finance can put a young adult on a much less tenuous road to financial stability.
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FAQs
Financial literacy lays the foundation for the future. Understanding skills in personal finance helps individuals to recognize their dreams, to establish businesses and organizations and to help themselves, their families and others succeed.
What is the importance of teaching finance? ›
A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending.
Why should you teach your employees the importance of personal financial management? ›
As an employee, having a strong financial literacy education means more productivity because they are better equipped to manage their finances and make sound financial decisions. The most common distraction in the workplace is financial stress, whether long-term or short-term.
Why is it important for you to learn about basic personal financial planning? ›
Importance of Personal Finance Education
As you gain more knowledge and awareness of how the financial system works, you can make informed decisions about budgeting, saving, and investing, which paves the way for financial success. Personal finance goes beyond having sufficient or surplus money to cover your needs.
How does personal finance impact your life? ›
Personal Financial Knowledge is Critically Important
These documents show that personal finance training leads to an increased knowledge of financial products, more effective budgeting, and more dollars being sent into retirement accounts to build a financially secure future.
Why is it important to manage personal finances? ›
When you start managing your finances, you'll have a better perspective of where and how you're spending your money. This can help you keep within your budget, and even increase your savings. With good personal finance management, you'll also learn to control your money so you can achieve your financial goals.
Why should we teach personal finance in high schools? ›
The teaching of personal finance provides the necessary skills for students to alleviate future worries regarding money and can enable them to start saving for that first house or dream retirement, we just need to teach them the correct skills.
What can finance teach you? ›
The term "finance" refers to the management of money. When you major in finance, you'll generally explore topics like financial planning, banking, and investing, all while developing valuable job skills like problem-solving and communication.
What do you need to teach finance? ›
There are certification courses to become a certified financial education instructor. You are not required to obtain a previous degree before taking these courses. However, you need a bachelor's degree to obtain a teaching license, which is required if you want to teach in public schools.
Why personal financial planning is so important? ›
A financial plan improves your standard of living by saving on taxes, making wise investments, tracking expenses , and growing wealth. It encourages disciplined spending, leading to a better future for yourself and your loved ones.
'Understanding the finances of your business helps to ensure you can withstand downturns. It will allow you to take advantage of opportunities that arise, and it increases the business's chances of long-term success. '
Why is financial education important for employees? ›
Education and literacy programs provide a library of personal finance information employees can use to learn more about personal finance topics. Financial apps and tools build off the knowledge employees learn elsewhere and give them a place to turn their knowledge into practice and improve their finances.
Why do you think personal finance is important? ›
Informed Decision-Making: With a solid grasp of personal finance, you can make more informed decisions about investments, loans, and other financial products, avoiding pitfalls and maximizing opportunities.
Why is personal finance an essential life skill? ›
Financial literacy isn't something they teach in school, but they should. Understanding how to manage your day-to-day finances is an essential life skill everyone should master. Grasping the fundamentals of personal finance not only enhances financial literacy, but also cultivates engaged civic participation.
What are the 5 main areas of personal finance? ›
What Are the Five Areas of Personal Finance? Though there are several aspects to personal finance, they easily fit into one of five categories: income, spending, savings, investing and protection. These five areas are critical to shaping your personal financial planning.
How do you benefit from understanding personal finance? ›
Understanding personal finance is key to managing money wisely and building a secure future. At its core, personal finance is about knowing how to handle your income, expenses, savings, and investments.
How can personal finance benefit me as a student? ›
Students can better manage their money, avoid common financial pitfalls, and plan for long-term goals, ultimately setting a foundation for a more prosperous and independent future. It also fosters responsible financial behaviors and helps students contribute positively to their communities and the broader economy.
How can learning about personal finance help you achieve your goals? ›
Develop a Spending Plan
Maintaining and managing your financial goals in writing can help you to achieve them. However, your everyday spending and purchases can make your way to saving for the future. So, create a spending plan and don't overwhelm your financial goals.
What are the personal benefits of finance? ›
The key benefits of effective and efficient personal financial planning include reduced stress and anxiety, financial security, the ability to reach financial goals, improved decision-making, and increased confidence and control.
