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Financial Literacy: Talk to Me Like I'm a Fifth Grader
Kids adapt to technology by repeated exposure, usually starting with interactive games, and can learn about money and payment choices in the same way.
While there are initiatives for teaching financial education in high schools, the age to learn about money may be around the time kids tap on their first iPad. A study by the University of Cambridge reveals that kids form money habits by the age of seven.
April is Financial Literacy month. As my colleague Doug King noted in a recent post, financial literacy rates are low among adults, declining from 42 percent in 2009 to 34 percent in 2018. Open conversations create greater understandings and can lead to a more financially literate population. Early learning about money and our payment systems fosters those conversations and increases financial knowledge.
As kids learn more about money and finances, they also learn about risks and how to better protect themselves from fraud. Starting with cash and coin literacy, there are several options to explore from the agencies that produce them. These simple introductions to our currency could help kids become more comfortable and familiar with our units of payment.
The U.S. Mint introduces kids to currency and all the details that go into making coins, including the design, weight, materials, and locations of the actual mints. It's fun and informative for kids and adults.
The U.S. Treasury provides details for kids on paper money. More details are found at the Bureau of Engraving and Printing in Washington, D.C., and Fort Worth, Texas. The site explains how they print billions of dollars yearly that are delivered to the Federal Reserve System, which helps kids to understand the interaction of the U.S. Treasury with the Federal Reserve.
The U.S. Currency Education Program sponsors a Currency Academy, which is managed by the Federal Reserve Board, for K-5 classrooms. The program includes videos, games, and activities for kids along with lesson plans for educators. The site notes the materials are best suited for kids in grades two through five.
The Richmond Fed's My Money workbook introduces young children to the characteristics and functions of money. They learn how to identify the different values of coins. Activities included in the workbook teach children that people earn money at jobs to use the money they earned to buy goods and services.
As kids learn about currency, they can extend their knowledge to other forms of payments they may see their family members use, including debit, credit, or prepaid cards, checks, and alternative payment methods such as Venmo, Square, CashApp, Paypal, or Zelle, among others.
You can order print copies of the workbook and other resources from the Federal Reserve Education's site. The St. Louis Fed has developed many parent reading guides to accompany popular children's books. These books and their associated parent guides include age-appropriate themes that encourage positive financial behaviors.