We Are All Financial Literacy Teachers
By Sarah H. Ostergaard, J.D.
Our state recognizes the importance of teaching financial literacy in our public schools. For example, the revised 2019 S.C. Social Studies College- and Career-Ready Standards for the teaching of social studies expanded the traditional economics framework to include many more financial literacy concepts.
Recently, our S.C. Council on Economic Education joined forces with the S.C. Treasurer’s Office to promote the S.C. Financial Literacy Master Teacher initiative to empower teacher leaders to train more teachers to incorporate financial literacy concepts in various subjects. Further, the educational branch of the regional Federal Reserve Bank of Richmond works with S.C. teachers to understand the needs in our state and expand the reach of its informative programs.
What is financial literacy? The National Financial Educators Council states that “financial literacy means possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual’s personal, family and global community goals.” The Financial Industry Regulatory Authority adds that financial literacy “encompasses a combination of knowledge, resources, access, experience, and habits.” In other words: Adulting 101.
Improving and expanding financial literacy education in our K-12 schools is sound public policy, whereas the costs of financial illiteracy are high. Across the nation, on average, in schools with 50% or more students receiving free or reduced lunches, only 1 in 7 students are required to take a personal finance course in high school. In the Palmetto State, 0.21% of high schoolers are required to take a stand-alone course on financial literacy (also known as personal finance), although there is noticeable improvement that under the most recent standards, a portion of the required semester course in economics includes more financial literacy principles and themes than the 2011 standards for the same course.
If a fundamental goal of K-12 education is to equip students with world-class knowledge and analytical skills to grow into civic-minded, participatory members of society, then financial literacy is a key component of education. As such, it should be incorporated holistically in a child’s K-12 education throughout various courses, even if on the surface there appears to be only scant relevance. The relevance and importance are there!
Why should our schools teach financial education? A thorough understanding of financial literacy can have a positive, lasting effect on families for generations. In any circumstance, an understanding of financial literacy is useful, but especially for at-risk students - the benefits of an invitation into the world of banking, choices, solvency and more for these students can be life changing.
We can empower them to change their futures by understanding insurance, paychecks, saving, investing, budgeting and more of those subject areas that so often separate the haves and the have-nots. These are concepts that are both confusing and seemingly out-of-reach, but a holistic approach to financial literacy education in schools changes that. An education that includes financial literacy is potentially life-changing not only for at-risk students but for their children and even their children’s children. This is the public policy proposal that cannot be ignored.
How should our schools teach financial education? Financial literacy should be taught throughout the K-12 years and throughout content disciplines to build financial inclusion for all students. Within their varied content areas, all teachers can and should incorporate financial literacy concepts such as budgeting, choice, logic and careers into their courses.
Teaching U.S. history and westward expansion? What choices did the settlers make about which valued items accompanied them on the Oregon Trail, how did they buy items they needed, and how much would these items cost in today’s dollars? What would you choose to take with you vs. buying if you had to move across the country? Needs vs. wants and change over time are financial literacy concepts.
In chemistry, how does the helium shortage affect prices and financial futures? In English language arts, students can analyze any number of the high-quality informational texts published by our regional Federal Reserve Banks about scarcity, the role of women in economic history, the gig economy, and banking basics.
Physical education coaches can include lessons on health insurance so students and athletes know terminology, choices and costs of various types of plans before they enter the workforce. Through education that is broad-reaching, these concepts lay the foundation for secure financial literacy capabilities for our state’s future.
Of course, banks and credit unions also have an essential role to play in improving our society’s financial literacy capabilities; however, programs and offers by financial institutions have more impact when the financial services consumer already understands at least the basics of saving, checking, budgeting, borrowing or investing.
Consider a consumer who, for example, has had lessons in school learning the fundamentals of credit, unpacking the fine print of a credit card agreement, understanding that various uses of the credit card carry different fees and interest rates, and exploring the powers of compound interest – and compare that consumer with one who does not know basic financial vocabulary, let alone the relationships of credit scores to interest rates. Consider the divergent approaches and varying levels of confidence as each navigates myriad offers, accounts and possibilities.
Incorporating financial literacy into various content disciplines over a child’s K-12 education can have a real generational impact on South Carolinians of all socioeconomic backgrounds.
Sarah H. Ostergaard is a teacher at FIVE (Flexible Innovative Virtual Education) and teacher, webmaster and social media coordinator at Irmo High School International School for the Arts.