Financial Literacy - Why teaching this is important.
Why is teaching your class financial literacy incredibly important?
The New Zealand Curriculum states: “Financial capability” is the skills, knowledge, and dispositions that enable a person to make “well-informed financial decisions throughout their lives” (Ministry of Education, 2007).
Therefore, teaching financial literacy will equip your class with the basic knowledge and skills that they can use to manage their money effectively in the future.
Starting to teach your pupils about financial literacy allows them to make informed decisions in the future, which affects their university, working and retirement funds. With this in mind, this issue of Extra! delves into what our needs and wants are, what is savings and debt and what it takes to become a financially capable citizen.
Teaching about Financial responsibility
Financial responsibility, in its simplistic meaning, is being able to live within your means.
Being able to assess your financial situation, evaluate your earning and spending habits, and make the necessary adjustments to put yourself on a responsible financial footing.
What is helpful is understanding your wants and needs and where the desire to have more comes from. A quick exercise to do is to ask the classroom collectively to itemise the things that they believe are wants and what they believe are needs.
You may want to purchase a new car, but does having the best and most expensive car have to be the car you buy?
You want the new play station game but do you need to spend full price on it or are there other ways of getting what you want? For example, why not purchase a second hand game or rent it?
The fact of the matter is, if you can’t pay for it in cash, then you should keep on saving for it (if this is your goal) or just decide to get something you can afford.
Financial responsibility means being prepared for the unexpected. Making sure that you have enough money, in savings, that could help you through some hard times.
Creating a budget, where you understand how much you earn and then calculate all of your spending (outgoings, bills etc) is one of the ways you can work towards becoming financially responsible. Getting your class to make their own budget books and keeping it for a week could be a good way of teaching them how to calculate and track their spending.
The Extra! Money Issue (out on April 30) covers a range of topics for your classroom including:
Introduction to Financial Literacy
How to manage money wisely
Examples of ‘needs’ and ‘wants’
Tips for saving