According to a study by FINRA (Financial Industry Regulatory Authority) Investor Education Foundation(link opens in new tab/window) ↗, four in five young people are not able to successfully complete a financial literacy quiz. Since the Great Recession in 2008, financial literacy has declined across all demographics, but it is especially true for Millennials and Generation Z. One approach to boost your students’ financial literacy is teaching executive function strategies that foster skills in organizing, prioritizing, self-reflection, and flexibility. It’s never too early to teach your students financial literacy and EF strategies that can have a lasting impact(link opens in new tab/window) ↗.
Planning + Loans
Taking out a loan to help pay for college or a car is a substantial decision that can affect a person’s financial status in the long run. Teaching your students strategies for long-term organizing and prioritizing of materials and time (Unit 4 in SMARTS) is an excellent place to start. Encourage students to explore their obligations (have to’s), aspirations (want to’s), and negotiations when it comes to their time, activities, and lifestyle. Loans, interest rates, and inflation also offer real-world scenarios that can be explored in math classes across the grades ↗.
Some ideas for helping students plan for loans include:
- What are the terms and fees associated with the loan?
- Are there prepayment penalties?
- Have they considered options to lower the interest rate, such as enrolling in automatic debit payments?
- Are they eligible to enroll in an income-driven repayment plan?
Shifting Flexibly + Budgeting
Strong budgeting skills are at the heart of setting oneself up for financial success. In order to create and maintain an accurate budget, students can first engage in activities that promote self-reflection and self-understanding. This is another element of personal finance where students can determine their spending “have to’s” and “want to’s”. What interests, hobbies, and activities are priorities that students should budget for? Playing games that encourage real-life budgeting(link opens in new tab/window) ↗ is a fun and low-stakes way to explore what it means to budget. When it comes to budgeting, students will need to remain flexible; unexpected costs can arise, so encouraging students to set aside a monthly stipend for last-minute emergency costs can prepare them for the unexpected.
Stay tuned for part 2 of our EF and Financial Literacy series.
- Caitlin Vanderberg, M.Ed., SMARTS Associate
SMARTS Executive Function Curriculum: smarts-ef.org
Research Institute for Learning and Development: researchild.org
The Institute for Learning and Development: ildlex.org