EdCuration Blog: Learning in Action

Making Financial Literacy a 21st Century Skill

Aug 20, 2021 9:17:23 AM / by Louise El Yaafouri

Mini Money Management August Blog Article (1)


Need to Know

  • Twenty-five states have introduced personal finance education legislation so far this year.
  • Money management skills benefit kids far into their future, and research says it’s best to start teaching financial literacy early.
  • We can make moves to integrate money management lessons into classrooms at every grade level.

A Closer Look

At eighteen years old, months after moving out on my own, I purchased my first cell phone. It was a heavy, trapezoidal contraption with a retractable antenna. I “financed” the phone. And guess how that worked out? 

Spoiler alert: It didn’t. 

I had no idea what financing entailed. To me, it boiled down to taking home a new phone with some vague plan to pay for it...eventually. In the end, I missed most of the payments, and the bill ended up in collections. 

Several years later, I applied for my first credit card and was denied (but was encouraged to apply for a “secured” credit card). My credit report, with all my missed cell phone payments, screamed out, “Hey, not this one! No financial literacy here!”

We grew up talking about a lot of things in our home, but, unfortunately, financial literacy wasn’t one of them. And I certainly didn’t have any courses at school to guide my financial health and well-being. But what if I had?

What Exactly Is Financial Literacy?

Financial literacy is an understanding of knowledge and skills that empower informed decision-making about one’s financial resources. These capacities include all types of asset management, from budgeting and saving to investing and intelligent spending, and they influence both short- and long-term financial well-being. In essence, financial literacy helps people gain the tools they need to make the most of their money. 

Students graduating today have a greater need for more robust financial skills than at any other time in history. One of the reasons for this is that kids have more “fast” exchanges with money than previous generations (think in-app purchases, for example). In addition, youth are entering the workforce and accumulating financial responsibilities at a younger age.  

“Financial literacy is particularly important for the young, as they face financial decisions that can have important consequences throughout their life,” says Annamaria Lusardi, writing for the Journal of Consumer Affairs. “The younger generations’ increased responsibility requires them to have the knowledge to make sound financial decisions early on.”

Should Kids Learn about Money Management at School?

While twenty-five states are legislating personal finance education, most of the focus is at the high school level. And according to financial experts, the most impactful money management lessons start early in life.

“Financial wellness is a continuum; from knowledge, to competency, to confidence in making sound financial decisions,” writes Ethan Rotberg for CPA Canada. “Kids who learn the basics of budgeting, saving, credit, and wants versus needs, are better prepared to make good financial decisions through post-secondary education and beyond.”

Consider this data, shared by MiniMoney Management, an app that combines K-8 financial literacy and classroom management using a classroom economy:

  • Children begin to develop their spending and saving habits by the age of five.
  • Millennials have an average of $28,000 in debt, with the largest percentage being credit cards.
  • Seventy-four percent of people in debt report “debt regret.”
  • Thirty percent of Americans were unable to answer three simple financial questions about inflation, compounding interest, and risk diversification. 

With these points in mind, it becomes clear that financial literacy is a non-negotiable that students must get support for in school.

How Can We Support Students in Developing Their Financial Literacy?

  • Turn to children’s literature to boost financial awareness. Check out Money Prodigy’s list of money books for kids (sorted by age/grade) or this compilation by The Best Children’s Books website. 
  • Consider implementing an integrated financial literacy program. MiniMoney Management, for example, empowers K-8 teachers with the tools to educate their students on lifelong skills like responsibility, critical thinking, and financial awareness. It’s easy to set up and integrate into an existing classroom structure.
  • Get families involved by sharing resources they can work on at home, like this one, from the Council for Economic Education. 
  • Embed gameplay into center work. Games like Monopoly, Pay Day, or Money Bags help teach and reinforce money management skills. Allowance from LakeShore Learning is a favorite in our third grade classroom!

Financial literacy instruction equips youth to make better decisions about their finances, now and in the future. So, how will you commit to growing your students’ money management skills this year?


Topics: Mathematics, 21st Century Skills

Louise El Yaafouri

Written by Louise El Yaafouri

Louise El Yaafouri is a Recent Arriver & Cultural Competency Consultant at DiversifiED Consulting. She provides professional development and curriculum design in the areas of Emergent Multilingual education, trauma-informed practice, culturally responsive pedagogy, and equity/inclusion work. Louise has authored a wide range of ed-related books and articles, including the forthcoming Restoring Students’ Innate Power: Trauma-Responsive Strategies for Teaching Multilingual Newcomers (ASCD press). Louise lives between Denver, Colorado and Saida, Lebanon with her husband and sons Noor and Joud.

Recent Posts