When it comes to financial literacy, it should be early, often, and for life

“The possession of skills, knowledge, and behaviors that allow an individual to make informed decisions regarding money.”

According to the popular reference website Wikipedia, this is the definition of financial literacy. Seems fairly simple and straightforward, doesn’t it? But the approach to providing young people those skills and knowledge has been anything but simple.

In a recent survey conducted by Schwab, two-thirds of the respondents said financial education is the most important supplementary graduation requirement to math, English, and science. For many subjects, students often ask, “when am I ever going to use this?” For financial literacy, that question becomes “when am I not going to use this?” Young people seem to recognize that credit scores, interest rates, debt, and taxes will have a daily influence on their lives.

Operation Hope CEO John Hope Bryant authored an opinion article for Time magazine and called financial literacy “the civil rights issue of this generation.” He asserts that financial literacy goes beyond educating people about managing money; it is a tool for social justice that can be used to address problems of poverty and limited economic mobility.

Yet financial education as a requirement for high school graduation is currently limited to 25 states. There is also no federal mandate stating schools are required to offer financial literacy classes.

Whether eventually mandated by the Department of Education or adopted by all of the states, a key to the success of financial literacy lessons in shaping spending and saving behaviors is to introduce it to kids early and keep them learning.

With my three children we started with board games. Monopoly and the Game of Life offer great lessons on money management and even give kids the tactile experience of having money in their hands.

As my children moved into the middle school years, they participated in a wonderful program developed as a partnership between their school district and Junior Achievement called JA Finance Park. It begins with four weeks of classroom instruction about money and finance. The students then travel to the Finance Park where they put the concepts they have learned into practice by experiencing personal financial management firsthand as they assume the role of a wage-earning, bill-paying adult for the day.

Students take on a life scenario – an avatar with a career, salary, credit score, debt, and family obligations – and make their way through various phases of the day. Adult volunteers (myself included) help students with their decisions and share their own life experiences in order to make the scenario more authentic and provide context.

For those students who don’t have teachers, family members, or mentors to teach them about financial literacy, the long-term consequences can be dire. Low or no financial literacy education levels are often correlated with low credit scores, higher borrowing rates, mortgage delinquency, and home foreclosure.

So where are curious students who aren’t receiving formal instruction in financial literacy going to find out more? The same place they go to find out about a multitude of topics – the internet. And that may turn out to be the key to bringing a solid foundation of good financial habits to the digital generation.

Last year, a New Orleans teacher created a popular TikTok video showing how she teaches her kindergarten class about money. She assigned each student “a job” that earns them an imaginary salary. Bonuses are provided for doing well on assignments and tests. But the students must also pay “rent” for their classroom. Any treats they buy at the class store are deducted from their accounts.

By introducing these students at such an early age to ideas about earning, saving, and spending, it can increase curiosity about finances and lay the groundwork for scenarios they will face later like paying bills and budgeting. And the online world has extensive resources that combine financial learning lessons with fun.

There are mobile apps designed to educate children about the credit system. Kids earn credit by completing chores and receive a “score” similar to those provided by FICO modeling. There is also an online role-playing game that lets students prioritize real-world spending decisions. Middle and high school students can learn how markets work by buying and selling virtual stocks through the Stock Market Game. Even the National Football League has an interactive program where money management skills are taught using football field strategy.

These online tools should be supplemented with direct interaction with those who can act as long-term financial partners. In working with my family’s local credit union, Apple FCU, my children have been able to open and manage share accounts, learned about credit cards and the effects of debt, and discovered that good money management now allows for future flexibility.

But the overriding principle regarding financial literacy education is that it should not end when someone receives a diploma or reaches a certain age. The digitization of money, the changing nature of the workplace, adoption of AI powered technology platforms, and new types of investment are just some of the topics on which people will need to be educated as adults. By teaching money management early, and making financial literacy available for a lifetime, there is a dual benefit. We become a more financially savvy society as a whole, and America’s credit unions gain a constant flow of new users for products and services.