What are Personal Finance Standards?

Most of us in my generation weren’t exposed to personal finance classes in school. Parents were expected to handle that part of our education, just as they had to handle the sex education. It’s different now!

There are actual standards for teaching personal finance. Not only are there the national standards developed by the JumpStart Coalition, but many states have their own standards. Jump Start is a coalition of about 150 organizations, corporate and non-profit which includes banks, financial planners, the IRS, credit card companies, Junior Achievement and more.

What are the National Standards?

The national standards put forth by Jump Start consist of 6 categories of personal finance including:

  • Financial Responsibility and Decision Making;
  • Income and Careers;
  • Planning and Money Management;
  • Credit and Debt;
  • Risk Management and Insurance; and
  • Saving and Investing.

Each category has an overall objective that the developers thought necessary to meet minimum financial literacy knowledge levels.

For example, in Financial Responsibility and Decision Making the overall objective is stated as

“Apply reliable information and systematic decision making to personal financial decisions.”

At each grade level, from Kindergarten through senior year in high school, activities and learning concepts map the way towards financial literacy.

Examples from the national standards.

One of the standards in the saving and investing category is to be able to explain how investing builds wealth and helps meet financial goals.

4th graders should be able to give an example of an investment and explain how it can grow in value. While at the senior level students should know how to identify and compare strategies for investing, including participating in a company retirement plan.

Each standard also comes with a knowledge statement that is supposed to show how the standards work together. For saving and investing, the knowledge statement is:

“Implement a diversified investment strategy that is compatible with personal goals.”

But how does one teach the standards?

Knowing what the standards are is one thing, but being able to come up with interesting and effective ways to teach them to children is quite something else.

Luckily for us, one of the coalition members, the Council for Economic Education, has developed some for us.

For each standard, this organizations web site has a list of activities that you can drill down into for more and more detail. Each activity has an overall objective, a list of key concepts with definitions, statements about what the student should be able to do after the activity, an introduction with multiple linkable resources, the process used to do the activity, things to discuss during and after the activity and questions to test the lessons learned.

What about Pre-schoolers and adults?

Resources to help teach pre-schoolers about money and finances.

I started my Grandma Rie’s Money Camp when my grandchildren were pre-schoolers. In order to find out what concepts they should generally be able to learn as well as to find activities and resources to help teach those concepts, I did a bunch of research.

There are books, and websites, movies and games and toys that will help you start your pre-schooler on the path to financial success.

I have developed a spreadsheet for myself, which I can share with you if you email a request to me, which lists by age, the concepts to teach, activities and resources to use and where I found the information.

Examples from it include the concept that Birth to 4 year olds can start learning  to begin to understand the use of trade to obtain goods and services. Some of the activities suggested to teach the concept include books, toys, games and other activities that help kids understand how money is used, how people get money and learning to identify different denominations of money and coins.

Resources to help adults learn financial literacy abound.

Sources to help adults include books and blogs, financial advisors, online and in person coursework, community education classes, credit counseling and more.

Books such as Dave Ramseys Total Money Makeover, Your Money or Your Life, the Millionaire Next Door, the Automatic Millionaire, the Millionaire Fastlane and any one of a number of all encompassing basic personal finance books that explain the mysteries of insurance, buying a house, your credit rating and many other need to know topics.

Personal finance blogs abound, including this one! Visit some of the financial networks that list the blogs for an idea of how many and what they are. The Yakezie list currently has 104 blogs listed. Wise Breads Top PF Blogs currently lists over 800!

Financial adviser and broker firms often provide education to their clients and often have online components such as this Merrill Lynch Investor education site.

Classes are also abundant.

The FDIC offers one online called Money Smart, but this class can also be taken in person. AARP and Schwab have teamed up to offer free basic training, both online and in several cities for the 50+ crowd. Of course there is also a for pay course offered as ‘Financial Peace’ by the Dave Ramsey company.

Check your local high schools and community colleges for free or very inexpensive classes as well.

You may find classes such as those offered in the Kansas City area at a local high school for the community that have names like: Savvy Social Security Strategies; Foreclosures and First Time Homebuyers; Funeral Planning; Focused on Fixed Income; or Family Matters with Long-Term Care.

 What should an adult know about personal finance?

I don’t know that there are any basic standards per se, past the ones issued for 12th grade. I guess that for now, those would be considered the basics of what adults should know.

Common sense tells us that we need to understand, know and be able to find out about much more that what Jump Start lists in its standards. Common sense also tells us that many, many adults are terribly under educated about personal finance topics.

 If your state or area has educational standards for personal finance, are you familiar with them? What role should parents play in teaching their children financial literacy?

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