3 Steps to Teach School Kids About Money

Last Updated Jan 25, 2011 2:30 PM EST

We like to think we're global leaders in the U.S. and, of course, we are in many important ways. But while we dither over how to best teach kids about money, half a world away they are actually doing something about it.

Financial education is a free-world issue. The U.S. and U.K. have generally been out front looking for a silver bullet that will make citizens smarter about credit, saving and spending. But while we talk, and talk some more, in New Zealand and Australia they are taking concrete steps.

Check out the government-run financial website in New Zealand at sorted.org.nz. It's clean, organized and up to date. There's plenty on this website for English-speaking consumers in any country, including games that help kids understand money. The U.S. has a useful financial website at mymoney.gov. But it's not as good as it could be. Indeed, high on the list of the newly appointed President's Advisory Council for Financial Capability is creating a world-class online site for financial information for U.S. consumers. Studying the New Zealand website would be a good place to start.

What really catches my eye, though, is a recent news item out of Australia. Beginning this year, under federal law financial education will be integrated into the nation's school system in grades K-10. The rollout will take three years and will work like this:

· Year one Kids will begin to see financial concepts presented in English, math, science, and history classes. What does this mean? Spelling bees might include words like "mortgage" or "amortization." Math assignments might include equations that compare loan payments at different rates of interest. History classes might look at the economics of war or origins of investment bubbles and stock market busts.

· Year two Kids will begin to see financial concepts presented through the arts, and in geography and language class. So, they might script and perform scenes at a bank, on a car lot, or in a home as a family sorts through its cell-phone options, or examine the varying costs of living in different regions.

· Year three Kids will begin to see financial concepts presented in physical education and across the humanities. So, they might study the personal and social costs of poor health habits, philosophies of wealth and philanthropy, and works of literature with money themes.

The whole idea is to teach the Three Rs -- but use money concepts in addition to traditional examples, illustrations and exercises.

Integrating social lessons into basic schoolwork has been effective in some states in areas like sustainability and economic justice. It can work with financial literacy too. Sadly, though, we don't just lack a federal mandate to integrate money lessons in our schools; we have a pledge from Education Secretary Arne Duncan's office to avoid taking that exact step.

Our national strategy is to let individual states deal with financial education however they see fit. In Australia, they have both a federal mandate and federal money to train teachers.

It's always been like this at home. The states run their schools. No one seems willing to challenge the status quo. So I suppose we'll go on raising kids who believe that winning the lottery is their best shot at a comfortable lifestyle.

Photo courtesy Flickr user sophistichate
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  • Dan Kadlec

    Daniel J. Kadlec is an author and journalist whose work appears regularly in Time and Money magazines. He is the former editor of Time’s Generations section, which was written and edited for boomers. Kadlec came to Time from USA Today, where he was the creator and author of the daily column Street Talk, which anchored the newspaper's business coverage. He has co-written three books, including, most recently, With Purpose: Going from Success to Significance in Work and Life. He has won a New York Press Club award and a National Headliner Award for columns on the economy and investing.

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