Updated: Jul 16, 2020
I can only recall two transformative lessons I learned about money in school. Both occurred during my earlier years. Unfortunately, neither one was facilitated by an educator. They’re described below:
I’m one of three (also the only girl). Every week my mother would travel to our school to pay our lunch fee for the week in advance. I believe the cost was $10 per child. Myself and my younger brother would skip up to the lunch support staff, plead for the money back (with puppy dog eyes), and re-invest the funds we received into cool trinkets from our school store. That was short lived.
My second learning experience was when my mother packed our lunches daily. This same brother would sell his juices and snacks for profit. Of course he got into trouble when my parents found out, but I didn’t see the problem tbh.
My takeaways from these experiences were the following:
All products and services have a monetary value.
I needed money to purchase things that I wanted.
People are always willing to exchange money for goods.
This is something I need to learn more about.
A common trend I see among some young black and brown adults from low-income communities is the questioning of academic content they’ve learned throughout their education. The concern is that some of the knowledge they’ve acquired during K-12 does not support them as they enter into adult-hood. Personally speaking, I wish I could have swapped out some calculus classes for lessons about credit and financial literacy.
Black and brown students deserve a shift in their learning experiences that will better prepare them for adulthood. They deserve equitable opportunities to become financially self-sufficient through having access to the following:
Avenues towards 750-850 credit scores, with education on how to maintain exceptional credit.
Buying power to purchase properties for personal or business purposes.
Knowledge about how to circulate their dollar throughout their community several times before it leaves.
A head start on building credit and wealth like their more privileged peers.
Techniques for budgeting funds and establishing multiple savings accounts, with at least one that accrues interest over time.
Failure to educate black and brown students in low-income communities on financial literacy further widens not only the opportunity gap, but also the wealth gap. The opportunity gap refers to disparities in communities that are determined by arbitrary circumstances such as socioeconomic status, race, zip code, etc. The wealth gap is defined as the unequal distribution of funds across a given population. Both are caused and nurtured by systemic racism (more info on that in the "resources" section).
Here are some areas that a lack of solid education in financial literacy can negatively impact.
Credit: This is our digital track record of our loans, liabilities, lines of credit, and payment history. A credit score can range from 300-850. Students that are financially illiterate in adulthood may have bad credit if they have poor payment history, high credit utilization, or too many open credit accounts. More information about credit is in the "resources" section!
Money Management: Students may have a difficult time balancing their funds in order to simultaneously budget their pay, save money, pay their bills on time, and put money in savings accounts. This will lower their credit scores if they are unable to pay their bills on time or find themselves taking out lines of credit to compensate for their lack of money.
Loans & Interest Rates: There is nothing wrong with supplemental funds to help finance large costs! However, proper education about loans will help to ensure that students only accept funds that they need, and refrain from taking out loans with high interest rates.
Entrepreneurship: Students who are not exposed to education on entrepreneurship and its benefits are less likely to open up their own businesses that will result in multiple streams of income. Entrepreneurship is not for everyone, but it's important that students have exposure to different ways to earn money.
Lastly, a part of doing the work is teaching black and brown students about specific issues that plague some of their communities. Here’s a few ways that educators can begin to teach them about credit and financial literacy:
Teach lessons on the importance of, as well as the buying power of great credit.
Circulating wealth: create small businesses in your classroom. Use the funds earned to re-invest into your learning community by purchasing school supplies, healthy snacks, etc. This will show students the power of buying within their own communities and supporting those who look like them.
Highlighting black/brown entrepreneurs, their journeys, strategies, and products. If you are short on time, consider doing this during morning meetings. Students need to see people who look like them implementing these skills. Ideally, this would be a lesson leading to the next point.
Have students choose a business they’d like to start and support them in developing a business plan.
Get a clear jar or class piggy bank and save to purchase a specific product. Be sure to work with students to establish a budget, pick a product, and map out the duration of saving before hand.
For K-5, create lessons that support students in recognizing the dollar as multiple parts (cents) that make up a whole, as well as differentiating between different types of coins (this can be a little tricky for younger students).
Create a school or classroom store where students earn funds based on expectations that you collaborated with them to create. Students can then purchase items at a set time during the week. An extension would be to let them buy items on credit and pay them off over time, as they continue to earn funds by meeting the expectations they helped to establish.
Read or guide them in reading texts about entrepreneurship, credit, and finance. Check out some below, click the pictures to be redirected to Amazon. Note: if you are viewing on your phone, you will need to scroll to see every text.
Provide word problems that prompt students to calculate payoff time given a loan, minimum payment, and interest rate.
Facilitate math lessons where students are given a salary and must create a budget to pay off a series of bills.
This is an extension of the previous point, introduce the 50-30-20 rule to students. 50% allocated to needs, 30% allocated to wants, 20% allocated towards savings.
I hope that at least one of these ideas peaked your interest. But it doesn’t stop there! Below are some additional resources. As always, thank you kindly for visiting!
Systemic Racism: https://www.benjerry.com/whats-new/2016/systemic-racism-is-real
Closing the Financial Literacy Gap: https://www.teachforamerica.org/stories/closing-the-financial-literacy-gap