Tips, Resources, and Ideas for Personal Financial Literacy Skills
Let's start with the WHY:
Why We Need to Teach Teens Personal Finance
Here’s a scary fact for you: In the U.S., 40% of people have not set themselves up financially to afford even a $400 unexpected expense in case of an emergency.
Even more startling, nearly HALF of American families have a total retirement savings of $0.
Wow.
Our young adults (and some older families as well) are DEEP in debt. We're a financial mess!
Some experts argue that when teens are not taught beneficial money management, they are more impressionable and might develop their parents’ habits and relationships with money, good or bad. If we teach them financial literacy, they’re more likely to adopt a better relationship with money and develop better habits that will stick for life.
Financial literacy means that you can understand basic financial concepts and are able to manage your personal finances. According to a recent report from Next Gen Personal Finance, only 1 in 6 high school students is required to take a personal finance course to graduate in the United States. It’s also scary to learn that women have even lower financial literacy rates than men nationwide.
And sadly, what happens in a young adult's financial life reaches into their personal life and health as well. Those who start to struggle with debt or have managed their money poorly end up more likely to battle stress and depression, have higher risk of suicide, and even begin to see a negative impact on physical health.
Even our smartest teens and young adults are not equipped to start out their adult financial life on the right foot.
Then dive into the HOW:
How to Teach Personal Finance to Teens
After learning more and more about what a massive problem this is becoming for our young Americans, I gathered a lot of input from students, parents, and teachers all across the U.S.
I’ve been getting really passionate about teaching this topic properly. Most of our middle schools and high schools are not integrating a complete personal finance class.
And those that are teaching a financial literacy course are having some challenges with getting it started. Either they have to develop their own curriculum, or they’re given a standard financial “coursework” collection that is incredibly dry and hard to plow through. Not much is out there that is engaging for kids, collected in one complete sequential course, and actually designed with the learner in mind. So I got down to business. I connected with teens, parents, and educators to collect all the info I needed on what would be a good fit. Then I started dreaming up the right blend of content and creativity, while incorporating all the brain research on how teen minds learn and remember!
Here are the tips and resources that I came up with to address these challenges and teach our teens the financial topics they need to know as they transition into adulthood.
TIPS:
1. Make it relevant. Teens are not going to feel connected to content that comes from a bank website, or is fed to them by an investment company's "curriculum for personal finance." Instead, print out some pictures of real cars that are for sale.Allow them to choose the vehicle they'd want to purchase or lease in real life, according to their own preferences. Let them pick which home they’d like to rent or buy, and then use those real prices to set up the example. Compare the lease prices and purchase prices over the long term and let them see how it actually works out. This will feel like a much more relevant practice example because it offers a "sneak peek" that feels closer to their present situation. Teen brains are still developing, and lack the long-term perspective that allows them to really "see" their future selves. Buying a car feels more realistic than trying to imagine a future self as an investor or participant in a retirement account.
Along the same lines, when you show the time-value of money, focus in on the younger self and the feelings or imaginary statements that each investor would make. It's hard for a young brain to relate to the "retired" person's situation. They'll internalize the lesson better by seeing what that person wishes they did as a 20 year old.
2. Show the possibilities and potential that can be within their reach. Draw in the teens who may feel like this is not for them. Instead of plowing through dry online content from financial experts, address your teens specifically. Show them the stats to let them see how attainable “wealth” really is. For example, the page below has students representing certain stats from a survey of people with "high net worth" ($3 million +). Students discover that these millionaires for the most part grew up poor or middle class!
Then they see that the majority of them don't have what you would imagine a millionaire's yearly income would be. In fact, a quarter of them made LESS than $200k a year and still acheived a net worth of 3 million dollars or more! Suddenly, the students start to see that true wealth is not outside their reach, even if they are currently in a poor family.
They realize that wealth is about what you KEEP, not what you spend (and not even what you earn each year!) These stats make this content feel much more relevant to teens, and worth learning.
This gets them really excited! Maybe your students never thought of themselves as the type of people who could become financially stable! It may have felt so far out of reach that they just tuned this type of content out before. But now they may see that their choices over the next few years will be what sets them up for their financial future. This can make a world of difference for some students. They move on to set goals and see how to make this happen for themselves. Making these lessons relevant and actually ATTAINABLE goes a long way toward engaging students in learning personal finance.
3. Get hands-on. You can do this in so many ways with teens! Engage those brains by incorporating real practice. Get them invested! In the course book I developed, for example, it gets really interactive. Kids have to select one of two common budget proportions and make a chart of their own personal needs, wants, and savings goals. Then, they break it down even further and have to get creative with representing their own budget! They end up with a color-coded pie chart with their own patterns to represent each sub-category and what percent it takes up.
They also have to make an entire flowchart of the payroll process to understand withholdings, W2s and W4s, and even take a look at filing taxes with a sample tax table as they learn about the 1040. Each step of learning finance needs to be interactive and allow for creative student OUTPUT, so they’re not just absorbing information, they’re actually synthesizing!
4. Include guided goal setting. I like to have kids pick a passion other than their own personal wishes to work toward. They pick a role model who supports a charity or cause, and they select their own “wealth building” goals that go beyond their own personal bubble. Although teens can have a tendency to be self-absorbed in some ways, they also often have a real desire to make the world a better place. Focus their dreams on making an impact.
Our teens are amazing change-makers, and they will get just as excited about being a good steward for their money as they will about having personal wealth to spend! Take advantage of this and use a more selfless approach toward building wealth. Turn it around to show what they can do with it for the greater good. Each student selects personal causes that they are passionate about, and dreams up goals of what they can do with their time and money. It’s a great way to show that good financial habits can impact the world, not just become a selfish pursuit.
RESOURCES:
Personal Finance Doodle Note Book
This new doodle note book focuses completely on personal finance skills. The visual, interactive guided notes make it approachable for students and allow for creative output. This graphic note-taking method of learning is based on neuroscience and activates brain pathways that lead to stronger retention of the material.
It’s organized into 6 chapters that cover the key aspects of financial literacy that our teens and young adults need to know. This is designed to work for a full class in school, OR for individual kids at home (middle school or high school level). The digital PDF of the entire book is now available, and I also published hard copy paperback books as an alternative option for those purchasing for their own child instead of using it for a full class.
Here are the details:
ThePersonal Finance Doodle Note Bookoffers your middle or high school students the brain benefits of visual note-taking all throughout their financial literacy coursework! The doodle notes includetaxes, budgeting, credit, interest, stocks, banking, insurance, mortgage, investing, loans, net worth, and more!
This contains everything that teens need to know in order to transition into adulthood and become financially independent. (In fact, it will put themaheadof most young adults who are frustrated that they've never learned these concepts!) Each chapter progresses through the lesson topics with guided notes with visual memory triggers, interactive tasks, and graphic layouts that follow the brain-based doodle note method.
In addition to learning the concepts in a creative way that transfers well to long-term memory,students will develop their own budget, draft career paths, create a personal timeline for the financial phases of life, make plans, and set financial goals.
The 6 chapters are:
- Banking, Budgeting, & Interest
- Investing, Stocks, & Retirement
- Taxes
- Insurance
- Mortgages, Loans, & Leases
- Wealth, Worth, & Financial Planning
Why doodle notes? Doodle notes activate both hemispheres of the brain and lead to increased focus and retention! Because of dual coding theory, the student brain can process the new content more easily through the interactive tasks, visual memory triggers, and opportunities to sketch, color, and embellish! Click here to learn more about doodle notes.
Go to this link if you’re interested in learning more about the Personal Finance Doodle Note Book. I’ve got a paperback version for single students at home, as well as a digital teacher license to print the PDF for entire classes.
FREE AUDIO ADD-ON:
I’m also offering a FREE audio supplement that will provide the “lecture” portion of the doodle note lessons! This free add-on is available at that same link, and lets students work through the book at home (or in school) by listening to my voice like a podcast while they interact creatively and build their note sheets!
Financial Fun Day
Another option (or supplement to the book) if you are a classroom teacher is to do one huge "Financial Fun Day." If your school does not have a full course on personal finance, but your kids are begging you to take a break from the Algebra and teach them what they will actually need to know for real life, this method is a wonderful alternative.
This is an awesome way to pack all the material into one day, and the great thing is that when it is all covered together in one day, the flow allows for it to actually be more relevant.
The students make decisions and put together a whole "life" of choices. They can choose a home to buy or rent, get a car, and look at insurance plans.
The financial day can include lessons on mortgages, interest, budgeting, credit, taxes, and so much more.
The actual math skills required for most of the personal-finance /consumer math concepts are limited to decimals, percents, and exponents. A 7th grader can do most of the math work, but the material is incredibly applicable to a high school senior as well.
This means that you can cancel classes for one full morning, pull all your students together, and run through it all at once. The day is really enjoyable for them, but the huge bonus for you is that then, you only have to do the unit every two years!
Click here to read my previous blog post that walks through that approach.
Additional Resources:
In this age of technology, everything you might need to know is right at your fingertips. You just need to know how to find it. In a teenager’s case, they also need to be made aware of the importance of this knowledge.
There are plenty of books, blogs, games, apps, podcasts, and even TikTok creators educating about personal finance. Especially if teens aren’t getting the push from home, they need their school to provide these resources and bring them front and center. Try setting up a little Financial Literacy bulletin board filled with information and even books they can borrow from the library. Here are some lists to get you started:
Other Books
- Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner
- What All Kids (and adults too) Should Know About Savings and Investing by Rob Pivnick
- How Money Works: The Facts Visually Explained (How Things Work) by DK
Games and Apps
- Mint has an app that allows teens (and adults) to budget
- Financial Football
- Savings Spree App
- Plan’It Prom
- Tip Yourself
- Chair the Fed Game
Financial Blogs
Podcasts on Finance
Do you make it a point to teach teens personal finance in your classroom? Any questions about how the book works? Let us know in the comments!Shop Resources Shown Above:
