Teaching financial literacy to young children may seem like a daunting task, especially when you think about how many aspects there are to financial literacy. Students need a clear understanding of money, wants and needs, and many other things for finances to make sense to them. There are also several key vocabulary terms they need to be taught, as they probably do not hear financial terms used often. However, it doesn’t have to be difficult as long as you have a clear idea of how to teach financial literacy to young children.
Step 1: Make Sure Students Have a Clear Concept of Money
One of the most important aspects to teaching financial literacy is the concept of money. Students need to understand the value of the different coins and bills. They also need answers to important questions about money, such as, “How do people get money?” and “What are some ways people can choose to spend their money?” Students need to understand that people can choose whether they want to spend or save their money. Gaining a concept of money is a huge step towards students gaining financial literacy.
Step 2: Learn Key Terms
Another huge factor in students learning financial literacy is learning the key terms associated with financial literacy. Young children probably can't define words like income, entrepreneurs, or goods and services because they aren’t words they hear and use in day-to-day life.
My Financial Literacy product includes clear, child-friendly definitions for each of these words and more. It also includes activities where students can apply these new vocabulary terms to real situations that they might encounter. For example, in one activity, students look at various pictures and decide if that scenario shows earned income or a gift.
In order to become financially literate, young children need opportunities to learn and apply key terms associated with financial literacy.
Step 3: Learn Why it is Important to Them
Like any skill we teach young children, students need to know why financial literacy is important to them and their lives. At this point, students probably understand that adults get jobs and then get paid. But what happens after that? Students need to know that in the future, they will get to choose their job. Some jobs provide goods or things to people, while others provide different services. As adults, they will also have to prioritize how their money is spent.
It is helpful to discuss how these things are applicable while they are still kids. Even children can have jobs, such as working at a lemonade stand or having a classroom job. Moreover, when children receive gifts of money, they have to decide whether to spend or save. Knowing that financial literacy has an application to their own lives is such an important step in helping students become financially literate.
All of these topics and more are in my Financial Literacy product! Your students will learn financial literacy in a way that is beneficial to them. They can gain important life skills through the application activities in ways that are tailored to their level of understanding. You can feel good knowing that you helped them prepare for their futures while also addressing important math and social studies standards.