Want to help teach kids about money? Here are some resources

As more states pass laws requiring children to receive financial literacy education, experts say kids should start learning about money and investing well before they reach high school.

More than half of states, 26, have made financial literacy courses mandatory by the time students graduate from high school, according to the nonprofit National Endowment for Financial Education. But studies suggest children begin understanding concepts tied to money as young as 3 years old and commence establishing their financial habits at 7. 

With more research available chronicling Americans' poor money and investment literacy and the many factors that tie into the problem and a burgeoning number of financial advisors and wealth management firms joining the effort to confront it, collaboration and technology are proving to be pivotal.

"Advocates should learn what is happening in their state to teach youth financial education in schools," Billy Hensley, the National Endowment's CEO, said in an email. "Financial advisors can promote this learning in local school districts and help train teachers where necessary.

"However, we must be transparent in that financial education cannot solve every economic challenge — it is not a panacea," Hensley continued. "There are many factors in the personal finance ecosystem that interplay in our individual financial well-being, and these are ever evolving. With nearly nine in 10 Americans believing youth should have financial education to graduate from high school, advocates should do all they can to bring this important learning to their students. Financial education must happen throughout our economic lifetime, starting in K-12, consistently in the home, ongoing in higher education, and into the workplace, social services and other adult learning opportunities."

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The available tools include curriculum developed three years ago as part of an effort led by the Council for Economic Education and the Jump$tart Coalition for Personal Financial Literacy, as well as the "Thinking Money for Kids" program from the American Library Association and the FINRA Investor Education Foundation. 

Currently, 300 public and tribal libraries across the country are deploying the "kits" developed as part of the latter program through their facilities, as part of traveling exhibits and in some local classrooms, according to Cindy Hohl, director of policy analysis and operational support at Kansas City (Missouri) Public Library and current president of the association. It and FINRA's nonprofit arm have been working together on the issue for nearly 20 years, she said in an email.

They have a "shared goal" in seeking "to teach children and their parents, caregivers and educators about financial topics (e.g., saving, spending, sharing, budgeting and investing) in a way that is both meaningful and fun," Hohl said. Since most data about financial education relates to high-school level instruction, it can be "difficult to look at the big picture on what is happening on the elementary and middle school levels," she continued. Regardless, she and other experts agree that policymakers should study whether to mandate early-childhood money education in their local schools, too.

"This is an important question for states and local school districts to consider carefully, ideally in collaboration with parents and educators (and librarians are, first and foremost, educators)," Hohl said. "Certainly, it is important to establish the building blocks of financial literacy beginning at an early age. And just because it is not required in elementary schools doesn't mean it isn't critically important. Everybody has an important role to play in helping young people gain fundamental skills related to personal finance. Public libraries across the country are offering engaging financial education experiences that prioritize the needs and best interests of library patrons — both children and the adults in their lives."

Waiting until high school to begin financial literacy training can create as much as "a 10-year gap" between the time that children start grasping money-related concepts and those courses, according to Mac Gardner, founder of Fidelity Investments' eMoney Advisor-backed technology firm FinLit Tech. 

Gardner's firm will launch a new app-based game called Berryville based on Gardner's early financial education book, The Four Money Bears, in April as part of Financial Literacy Month, he said in a phone interview. He was speaking from an event in Tampa, Florida, for another organization he suggested as a resource for advisors seeking to get involved with financial literacy efforts — Junior Achievement.

Mac Gardner

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As much as the "gamification" of finance prompts concerns about the reliability of so-called finfluencers as sources of advice and the impact of scenarios such as the 2021 GameStop saga on retail investors' decisions and the larger economy, it holds great potential for kids learning about topics such as entrepreneurship, investing, budgeting and other topics. Gamification of financial education is "really, really big, especially when you're dealing with young people and you're dealing with kids," much like seasoning for broccoli, where "all of a sudden, it's delicious," rather than an obligatory vegetable to eat, Gardner said. And wealth management firms and their clients have a vested interest in the whole process.

"Advisors are always looking for ways to help people who have young kids promote financial education," Gardner said. "They want their kids to be as financially savvy as possible, because they know that they're the ones who are going to inherit it at some point, and they don't want them to squander it."

Technology is expanding available aids to financial education — even as the digital tools have risks, according to the panelists in a forum this past summer about financial literacy held by the U.S. Government Accountability Office, a watchdog agency that reports to Congress.

"It allows for more cost-effective and scalable financial education initiatives using digital channels," an online summary of the forum said. "Digital technology also creates opportunities for just-in-time education personalized for the consumer. Digital platforms offer diverse formats, such as podcasts and infographics, and can include game-like features like achievement badges, all of which can enhance engagement with educational materials. However, the quality of digital financial education sources can vary, participants noted, ranging from social media influencers to trusted government resources. Traditional schools, a trusted source for education, can also help build financial literacy and related skills."

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As one of the participating organizations in the forum, the National Endowment for Financial Education is trying to raise notice among the industry and the public at large of the necessity of financial education.

"Americans want financial education required in schools. It has proven benefits backed by research," Hensley, the organization's CEO, said. "Financial education must start early in the classroom with equitable access and quality programming. Training teachers to deliver the learning and continually evaluate and improve methods is essential. Parents can also support financial education at home by having open conversations, setting positive examples and seeking learning opportunities for themselves."