For many children, getting an allowance is their first introduction to money. Maybe it’s $5 a week for keeping their room clean or emptying the dishwasher, or $20 for mowing the lawn. Whatever the amount, it serves as a basic introduction to financial literacy.
Though it’s a good start, there is a lot more to learn before kids become proficient in saving money and balancing a budget.
According to a recent financial literacy survey conducted by the National Financial Educators Council, less than 30 percent of youth were able to score higher than 70 percent on a test of financial knowledge and motivation. The quiz included topics like setting up accounts, long-term planning, risk management, credit and debit cards, and investing basics.
The good news is that our school systems are aware of this gap in our kids’ educations, and are gaining traction in implementing programs to ensure students graduate with some basic knowledge in finances.
“Financial literacy is one of the most important subjects we can teach our students,” says Maryland Comptroller Peter Franchot, who is passionate about imparting financial skills to students. “Before we hand our kids a diploma and send them into the world to start building their future, we need to do everything we can to help them understand credit scores, loans, balancing checkbooks and building personal budgets. While I am pleased with the progress we’ve seen over the years, there are still far too many students who leave school without these vital skills. This is about preparing our kids for the future and in turn, securing the economic growth and success of our state as well.”
In 2009, Franchot pushed for an initiative in the Maryland General Assembly to require high school students to take a course in financial literacy to graduate. Assistant Comptroller Joseph Shapiro notes that “while the initial legislative effort for a statewide bill did not come to fruition, the attempts brought greater awareness to the incredible need and the value of financial literacy education and school systems, parents, teachers and the private sector have heeded the call—a classic example of losing the battle but winning the war.”
For example, some jurisdictions now have a requirement that high school students must take a financial literacy course to graduate, and every jurisdiction in Maryland now has financial literacy education embedded in the curriculum at several grade levels. “In addition,” says Shapiro, “elective courses have been added in school systems and are quite popular with students and parents.”
While a financial literacy course was not instituted as a graduation requirement, in 2010 the Maryland State Department of Education [MSDE] released the Maryland State Curriculum for Personal Financial Literacy Education. This requires all local school systems to offer a program of instruction in financial literacy education for students in grades 3–12 by September 2011. Since the inception of the requirement, MSDE has provided an annual update.
The 2016–2017 update identified some of the ways financial literacy have become part of Maryland school curriculums. For example, elementary school students participate in a variety of activities including Junior Achievement’s Biz Town, which combines in-class learning with a day-long visit to a simulated town where students operate banks, manage restaurants, write checks and vote for mayor.
Middle school students participate in Junior Achievement’s Virtual Finance Park, a month-long program that introduces students to personal financial planning and career exploration. At the culmination of this teacher-led program, students visit JA Finance Park, a realistic on-site or virtual community, to put into practice what they’ve learned by developing and committing to a personal budget.
At the high school level, financial literacy is embedded in courses required for graduation or offered as a stand-alone graduation requirement. In addition, several school systems also offer courses in Family and Consumer Sciences and Business Education that relate financial literacy, such as entrepreneurship.
Dr. Allen Cox is the Assistant Director of Financial Education for the Maryland Council on Economic Education, which offers professional development workshops and education programming for classroom educators to help them meet the curriculum requirements put forth by MSDE. Cox is also the Managing Director of the Maryland Coalition for Financial Literacy and the Maryland coordinator for the Stock Market Game.
The Stock Market Game is popular in many schools and is designed for students in grades 4 through 12. The game teaches students about stock markets, the American economic system and the global economy. Students, working in teams, develop skills in math, language arts, research and critical thinking, while building and maintaining a virtual stock portfolio. Each team is provided an “account” with a hypothetical $100,000 to invest in common stocks listed on the New York and American Stock exchanges, and the Nasdaq. To guide students in managing their portfolio, the program provides online resources to explore different investment opportunities. As the local coordinator, Cox provides manuals, lesson plans and videos tailored to students in different grades.
There are multiple competitive sessions to choose from—one that runs for the entire school year, a ten-week fall session, a ten-week spring session and a non-competitive late spring session which concludes in June. There is no limit to the number of teams from a school or class, and teams can participate in as many sessions as they like, with the approval of their teacher as there is a minimal charge of $15 to $30 per team for the competitive sessions.
Teams can win plaques, certificates and other awards based on the success of their investment management strategy at the
end of the session. If you are worried the Stock Market Game is just another online game that will add more screen time and less engagement in “real life,” fear not. Local firms, businesses and individuals contribute to the program by making classroom presentations, hosting office tours, sponsoring award ceremonies and even providing financial support. Along with the computer program, real people are there to help guide the way and keep the students engaged in learning.
The annual Economic and Personal Financial Challenge is another competition for students (econed.org/economic-and-personal-finance-challenges). Maryland middle and high schools may each register two teams of four students. The competition begins with a multiple choice test about personal finance. The teams with the highest school proceed to a “Quiz Bowl,” with the state winner moving on to the national level. Schools may begin registering teams in the fall, and study guides are provided to prep the students for the competition in the spring. Winners receive cash prizes provided by sponsor M&T Bank.
“If we expect our schools to prepare our kids for life,” says Cox, “nothing is more important than teaching them how to manage their money, learn to save and invest, handle credit and debt, and avoid identity theft and fraud. Young people who learn those skills will be much better off as adults than those who do not.”