Money is an integral part of our everyday lives. From paying for goods and services to managing a personal budget, knowing how to think about money is something many of us take for granted. But the concept of financial literacy is much more complex, especially when it comes to making smart decisions. In many ways, the role of K-12 education is to prepare students for life beyond high school. This means being able to think about paying for college, how to manage wages from a career, and smart spending and saving practices. 

A 2017 survey from T. Rowe Price found “that 69% of parents admit they are reluctant about broaching the topic of finances with their children.” (Forbes). If students aren’t learning about money at home, it’s critical that they have the opportunities during the school day. Fortunately, more states are adding financial literacy courses to their high school graduation requirements (CNBC). But is it enough to introduce students to these topics as teenagers? 

Anxiety about math is directly correlated with anxiety about money.

In 2018, Dennis Duquette (from the MassMutual Foundation) wrote in EdSurge, “[today’s] young people face an overwhelming number of complex financial decisions. However, many are unprepared to make informed financial choices as they move into adulthood. In fact, three out of four young adults cannot answer basic financial questions.” 

A 2016 report by Bank of America found that “only 16 percent of millennials ages 18-26 were optimistic about their financial futures” (Education Dive). Introducing students to financial literacy topics at a young age can directly help kids rescue their future. Annamaria Lusardi (the Denit Trust Chair of Economics & Accountancy and the academic director of the Global Financial Literacy Excellence Center at the George Washington University School of Business) and Nan J. Morrison (president and CEO of the Council for Economic Education) expressed this in more pressing terms in a 2019 Education Week article, stating “[perhaps] the most important reason to incorporate financial education in schools is that it levels the playing field. The data on financial literacy from the international assessment and other surveys show that college-educated males from wealthy families do just fine without personal finance in the classroom, furthering the gap for young people born without these advantages”.

We recently spoke with Dr. Donna Knoell, an educational consultant who works with schools and districts nationwide to improve academic performance to get her perspective on why financial literacy matters, and how math is an important part of the solution. 

To Dr. Knoell, “financial literacy is one of the best examples in which mathematics is applied to the real world of daily living. So many major and minor decisions are dependent on a basic understanding of math and essential financial literacy concepts. Knowing the cost of borrowing money is certainly an important aspect of financial literacy. Simply knowing if the amount of change you are given back after a purchase is correct is certainly basic mathematics and basic financial literacy, too.”

Math can be difficult to understand because it seems so abstract. Incorporating money is something students are familiar with and helps them make important connections between what they are learning, the math skills involved, and better-prepare them for life.

It’s critical to start this learning with young students.

In a January 2020 article in Education Dive, Danielle Orange-Scott​ (former 2nd-grade teacher and current high school counselor and educator in California) explained, “[numerous] studies on child cognitive development have highlighted the benefits of early exposure to language, role-playing, and even mathematics. Over the first few years of life, the brain grows rapidly, allowing children to learn quickly — even more so than adults. Unfortunately, as we age, underutilized synaptic connections are deleted in a process called synaptic pruning, and we’ve missed our chance to lay a firm foundation to complex concepts.” 

Dr. Knoell is excited that financial literacy courses are being added to the curriculum in many states but notes that “it should have been added long ago. Requiring students to learn basics of financial literacy will certainly help to assure that individuals can make better life decisions when finances are involved, and help students have a much better understanding of the real cost of living.”

Fortunately, there are plenty of resources available to elementary school educators who want to introduce these topics to their students. The TouchMath Money Kit uses the research-backed Concrete-Representational-Abstract approach to helping students understand both money and math. Our Upper Grades Money Workbook reinforces core financial literacy topics for older students. This 2014 Edutopia article includes several additional ideas and lesson plans to teach elementary school students financial literacy. 

How do you teach your students about money? Is it part of your regular math instruction? Let us know!