Afterschool Focus: Financial Literacy
You don’t have to be a Beatles fan to know the popular refrain, “I don't care too much for money, for money can't buy me love.” Although money may not buy love or happiness, anyone who has worried about a healthcare expense, an unexpected emergency, or simply paying rent or buying food, appreciates financial security.
Financial literacy is vital to achieving financial security. As afterschool practitioners, we can help youth learn and develop financial habits that will serve them through adulthood. The opportunity to cultivate financial literacy is not limited to our students, however. Our afterschool programs can also help adults continue developing financial literacy so that they can work toward financial security and also teach their children.
Because of the importance of the topic, this issue of Illinois Quality Afterschool Quarterly focuses on financial literacy. We explore what financial literacy is and why it is important, discuss ways to leverage afterschool best practices to implement financial literacy programming for students and adults, and share some available resources.
What is financial literacy?
Financial literacy is the ability to manage your financial resources such as cash, bank accounts, retirement accounts, and investments, and understand financial events and conditions to ensure a lifetime of financial security. Financial literacy can be divided into five broad categories:
- Earning. Understand the fine print and details about a paycheck, including deductions and withholdings.
- Borrowing. Know how to get a loan for purchases like an education, a car, a house, or unexpected expenses. This includes understanding interest rates, the terms of a loan, and how your spending and borrowing habits affect your ability to qualify for a loan.
- Saving and investing. Understand how to set money aside for emergencies or short-term goals. Longer term savings can include money for education, retirement, or other major purchases. Investing enables us to use money to make money through stocks, bonds, mutual funds, real estate, and other assets.
- Spending. Understand living within your means, comparing prices and quality to get the best value for a purchase, tracking habits and developing a budget, and planning for short-term and long-term financial goals.
- Protecting. Keep financial records in order, be alert for fraud and other scams, protect your identity, and select insurance to meet your needs.1
Why is financial literacy important?
Financial literacy promotes the financial well-being of individuals and families. It enables youth and adults to make informed financial decisions; prepare for things like education, buying a house, travel, and retirement; and also plan for unexpected hardships. Unfortunately, many Americans lack sufficient financial knowledge to make sound financial decisions. A recent survey found that only about half of Americans had a firm understanding of concepts behind managing debt, saving for retirement, or insuring against major risks.2
How can 21st CCLC programs promote financial literacy?
Teaching financial literacy in your 21st CCLC program can take a variety of forms, many of which are already embedded in afterschool best practices.
Begin by integrating financial literacy concepts into existing activities and make real-world connections. For example, you might try some of the following activities:
- Ask students to find the best value for a product that interests them and determine how long they would have to save at a certain rate to buy the product.
- You can also teach students how to develop and monitor a budget for an upcoming event or program. Let them know what funds are available from different sources (your 21st CCLC grant, local sponsors, etc.) and talk about how they can raise funds or resources to support it.
- Create a banking system within your afterschool program.
Work with community partners. There are a range of organizations that offer financial literacy activities for youth and adults. Many of them have curricula and activities and train-the-trainer activities.
- Local banks and credit unions can teach youth and adults the basics about personal finance, checking and savings accounts, and loans.
- Organizations like Junior Achievement and 4-H have financial literacy curricula and often have staff or volunteers who can support implementation.
Align work with the school day. Financial literacy is part of the Illinois Social Studies Standards and therefore easily align with school-day content.
- Be sure to communicate with teachers so that you are supporting and not duplicating school activities.
- You can also integrate personal finance into academic enrichment. For example, Money as You Learn provides tools to help educators integrate personal finance into teaching the Common Core State Standards, with which the Illinois Learning Standards are aligned.
Bring in the fun and games. Although financial literacy may be no laughing matter, there are several free online games to help students learn key concepts and practice decision making.
- Practical Money Skills, a financial education website developed by Visa, has several games that teach and reinforce different financial concepts according to grade level.
- The Gen i Revolution was developed for middle school and high school students and gives players a chance to learn important personal finance skills as they play and compete against fellow classmates.
- The Stock Market Game helps students build a fundamental understanding of investing while providing them with real-world skills practice in math, English Language Arts, economics, social studies, and other subjects.
Provide support for families. Families are students’ first teachers in the area of financial literacy and the habits they development. Consider offering personalized coaching or classes in some of the core financial literacy areas described above and partnering with local organizations. If you have not offered financial literacy classes for family members before, you will want to assess participants’ comfort level and understanding of key concepts, and align content to participant experiences and needs so that you can create a supportive environment with relevant curricula to ensure that adult learners feel comfortable asking questions and building their financial knowledge. See You for Youth’s Financial Literacy Implementation Checklist for guidance on creating a safe and supportive learning environment.
- Organizations like Operation Hope provide financial education and coaching to low- and moderate-income individuals and families.
- The Federal Deposit Insurance Corporation (FDIC) has a series of Money Smart for Adults and Money Smart for Small Businesses training modules.
- The Consumer Financial Protection Bureau has a suite of tools and resources on topics such as auto loans, debt collection, and savings and banking accounts.
- Econ Illinois — provides economic and financial literacy programs and services starting at the elementary level and extending throughout adulthood.
- You for Youth Financial Literacy Resources and Training
- FDIC Money Smart for Young People — K–12 lessons organized by grade band.
- Money Math: Lessons for Life — A four-lesson curriculum supplement for middle school math classes, teaching grades 7–9 math concepts using real-life examples from personal finance.
- Practical Money Skills — In addition to the games described above, this site has information on financial topics, lesson plans, and financial calculators.
MyMoney.gov (n.d.) My Money Five. Retrieved from https://www.mymoney.gov/mymoneyfive/Pages/mymoneyfive.aspx
Yakoboski, P. J., Lusardi, A., & Hasler, A. (2019). The 2019 TIAA Institute-GFLEC personal finance index. New York, NY: Teachers Insurance and Annuity Association of America-College Retirement Equities Fund. Retrieved from https://gflec.org/wp-content/uploads/2019/03/TIAA-Institute-GFLEC_P-Fin-Index-Report_April-2019_FINAL.pdf
2 Yakoboski, Lusardi, & Hasler, 2019.