Practical, Hands-On Financial Literacy Lessons
Managing money is not an innate skill, as the high rate of debt in the U.S. shows. Lessons on managing money should be part of a formal education, many believe. Programs like Hands on Banking give students practical lessons in handling their finances. Included: Descriptions of how to use a financial literacy program in the classroom.
With personal debt climbing and the rate of savings dwindling, managing money should be viewed as a critical, teachable life skill for young people, according to Pamela Erwin, president of Wells Fargo Foundation California and creator of the companys Hands on Banking program. For many teens, these lessons can be as basic and as practical as learning to budget their allotted cell phone minutes.
Hands on Banking is a free, bilingual financial education program that provides practical lessons in areas such as managing your cell phone bill, saving and paying for an education beyond high school, living on your own, including the money basics of housing and transportation; creating a budget and living within your means, buying a car, opening bank accounts, establishing, building and managing credit; and avoiding debt problems, according to Wells Fargo.
Erwin, a former high school teacher and principal, talked with Education World about how teachers can use Hands on Banking in their classrooms.
Education World: Why do you think so many young people (and adults) today have difficulty managing money?
Pamela Erwin: The biggest issue is lack of knowledge. You cant put a fourth grader behind the wheel of a car and expect him or her to automatically know how to drive. Managing money is a learned skill that comes with education and experience.
Most kids graduate from high school without any financial education. Then they go off to college or life on their own without knowing the first thing about paying rent and bills, managing their first credit card, or repaying student loans. Forty-five percent of college students today are in credit card debt, with the average debt above $3,000.
In our society we focus a lot of attention on earning money and even more on spending it. But more attention is needed on managing money and making the most of what you earn. With programs like ours, parents and teachers can help kids get on the right track with good savings and budgeting habits -- and take away valuable lessons themselves. We also have a great program specifically for adults -- its never too late to start learning good financial habits.
EW: How is the Wells Fargo program different from other financial literacy programs?
Erwin: The first factor is that teachers helped us create and pilot the Hands on Banking program. Its the only program we know of that meets or exceeds national education standards for economics, financial education, mathematics, and language arts, so teachers can easily integrate the lessons into their classrooms. Teachers also appreciate that Hands on Banking is available in Spanish and completely commercial free.
EW: What kinds of practical lessons does it provide?
Erwin: We give teachers hundreds of ideas for interactive activities on the computer or worksheets that easily fit into their daily curriculum. The lessons cover everything from creating a budget, saving and investing, and smart shopping, to responsible use of credit, how to buy a car, and how to afford education beyond high school -- even how to buy a home and how to establish a small business. Whats very important are teachers can customize their lesson plans to fit the learning style and level of the students. This gives teachers the flexibility they need, whether they have an Advanced Placement class or are working with students who need some learning modifications.
EW: How can teachers use it in the classroom?
Erwin: Hands on Banking is available free online and in printed teachers guides. Both formats can be used as stand-alone lessons, or they can be integrated into math, economics, reading or other curriculum being taught. For example, if the class is working on multiplication, the teacher can use a multiplication lesson that teaches budgeting skills. One fun activity for high school students is a portfolio project that teaches entrepreneurial skills. The students learn how to write a business plan, choose a company name, create a logo, and how to build a small business budget. Overall, the activities really challenge students to use their critical thinking skills.
EW: What is one of the key concepts young people need to understand for financial literacy?
Erwin: Responsibility. Whether you have 10 cents, $10, or $1,000, its your personal responsibly to manage your spending behavior against what assets you have. You are responsible for your own financial future and it starts with living within your means as you work toward your goals in life.
EW: What do you think is the biggest misconception young people these days have about managing money?
Erwin: Most young people dont realize that money management is a learned skill. Its a learned skill just like anything else you want to do well in life, whether its a job, playing a musical instrument, or playing a sport. We teach cooking, typing, woodworking, and even driving in schools, but for some reason we havent actively embraced financial education as a skill that needs to be taught.
Also, young people need to know that time is on their side when it comes to saving and investing. Starting out in low-paying jobs, the idea of money management may not even be on their radar. They need to understand that saving early, even small amounts, can earn them gigantic dividends down the road. And earning a college degree can mean the difference of $1million or more in future lifetime earnings.
This e-interview with Pamela Erwin is part of the Education World Wire Side Chat series. Click here to see other articles in the series.
Article by Ellen R. Delisio
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