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Raising smart decision-makers

5 min read

Career-Technical Education

This post is sponsored by the Council for Economic Education.

Financial literacy isn’t just teaching kids about money, according to Nan Morrison, president and chief executive officer at the Council for Economic Education. Children need to learn how to make smart decisions in addition to understanding money. SmartBrief talked with Morrison about her organization’s plans and resources for shaping the way kids learn.

Question: You’ve said that the “language and tools of economics give our kids the ability to recognize and understand the nature of choice in their lives.” What do you mean by this?

Answer: Economics teaches decision making. When you take away the charts and graphs and complicated math and numerical analysis that you see in The Wall Street Journal or The New York Times, learning economics is basically understanding that you have choices, understanding that choices involve trade-offs, opportunity costs and risks.

A good example is a second grade teacher that we work with who lets her students earn money called “Dragon Dollars” by setting goals and achieving them such as doing their homework, helping with tasks in the classroom and so forth. They can save up their “Dragon Dollars” to earn prizes. If they don’t have enough money to purchase the prize, they can borrow from the teacher but have to pay back twice as many “Dragon Dollars.” This exercise helps these kids understand trade-offs and risks, and the consequences of their choices.

Financial literacy isn’t necessarily about teaching a vocabulary. The goal is to teach concepts. We’re trying to give people the tool kit – the mental tool kit – to figure out how they can create better opportunities and lives for themselves.

Q: How do you see these tools helping students to understand the nature of choice and value of money?

A: We try to not focus on money as money but as an enabler to where they need to go. We try to teach that you start by setting goals then work back to what you need to do to achieve those goals.

One fourth-grade teacher uses our tools to teach goal setting, such as “Set the goal to finish your homework each night.” She knows that if she can get her students organized when they’re in the fourth grade, they will likely continue this habit through high school, and beyond, because they will understand the benefits they get from setting that goal.

When you start to teach children that they have choices, they can set goals, look at the trade-offs — the plusses and minuses – and chart a smart course.

Q: How do we teach these concepts and lessons at the different grade levels, from elementary through high school?

A: Hands-on activities and exercises are great for teaching these lessons, at every level. These types of exercises allow students to explore the concepts through real-world contexts.

A good example of this is “The Bag Game,” which we use to teach middle school students about trading. Understanding international trade and international markets is a very important skill, whether you’re a senior business executive or someone looking for a job. With this game, each student gets a bag of items – small trinkets – and evaluates their perceived value of that bag based on a scale of one to 10. Next, they begin trading with each other and then in teams. With each round of trading, the students measures the value of their bags. By the time they reach the final round, the value of the bag has usually gone up. The collective value has increased. It’s a fun way to teach kids about the value of why people trade.

Q: Many teachers feel they lack sufficient knowledge to teach economics and finance, especially at the younger grade levels. How do we make teachers more comfortable with teaching this information? 

A: Start by arming your teachers with good content. Many teachers don’t feel confident to teach these subjects because they, like most Americans, don’t fully grasp some of these concepts and practices. Plus, there’s a lot of information out there that can be confusing and conflicting.

But when teachers get smart content, they begin to gain confidence. They realize the subject is not as complicated as they originally thought and they feel more comfortable taking it into their classrooms.

Next, connect with an organization – such as CEE – that can help integrate these concepts into classrooms. These organizations offer short training programs to guide teachers. Once teachers see how to splice these lessons into the curriculum, it all begins to click and come together.

Q: Clearly this is important. How can we raise this conversation to a new level in our communities, and get parents and businesses to support this initiative?

A: We have to get economic and financial education into the schools. This is the biggest challenge. That’s a state-level decision to make it a requirement for districts and not all states have this mandate in place. According to our recent Survey of the States report, only 17 states make personal finance a required course for graduation; only six states call for students to be tested on these concepts.

The best way to tackle this is for parents and concerned citizens to approach their teachers, principals, superintendents and state boards of education, and rally to get this curriculum and training into the schools. Let’s get resources and materials into our kids’ hands so we can have a smarter population that’s better equipped to face a changing world.

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