Key points:
Financial literacy is greatly undervalued in today’s digital age. Half of all U.S. adults are financially illiterate, as millions don’t know how to calculate interest or protect themselves against inflation.
Similarly, many Americans overrate their financial knowledge but don’t understand fundamental monetary concepts like stocks, bonds, and mutual funds. Millions of people may be sleepwalking into financial trouble due to inadequate financial education.
Educators can improve money management skills and improve financial literacy by using digital tools to teach the next generation of savers, investors, and consumers. This can help people ensure their money goes further and will make for a more stable economy in the long run.
Digital financial resources
Research shows that students need to be more prepared to enter the world of commerce. This sentiment is echoed by Fred Fransen, CEO of Certell, who states, “If students don’t improve their understanding of economics and finance at the high school level, they may never be exposed to it.”
However, many students overlook economics and personal finance courses in favor of the traditional array of courses. Educators can buck this trend and get more students into money management classes by offering more curriculums packed with engaging digital tools that help shape students’ money management skills.
Today, educators can tap into resources like Discovery Education’s financial literacy resources to create lesson plans that excite students and improve money management skills. Discovery Education has partnered with recognizable brands like the NBA and WNBA to create detailed resources that help students understand the value of being sensible with their money. Similarly, Discovery Education offers age-appropriate resources like the Fixies Channel. This educational content is perfect for younger students who are new to the idea of saving, spending, and investing.
Video games as teaching tools
Video games have always been popular with teenage boys. However, in recent years, the video game industry’s gender ratio has moved closer toward equilibrium. This is great news for educators, who can use engaging video games to push the value of money management skills to their students.
Money management video games don’t have to be boring, overtly “educational” playing experiences, either. In fact, many of the world’s most popular titles now teach financial literacy. Educators creating a personal finance curriculum can use video games that teach students about money, like:
- Roblox: A hugely popular title, Roblox is a free-to-play online app that has a plethora of games on offer. Educators can choose to assign games like Theme Park Tycoon 2 and Work At A Pizza Place to teach young children the value of budgeting.
- Animal Crossing: Originally released in 2001, Animal Crossing is a social simulator game that incorporates key skills like saving, labor, and loans.
- No Man’s Sky: No Man’s Sky (NMS) is perfect for older learners. They’ll have to budget for resources, increase their investment in revenue-generating activities, and learn many of the skills that small business owners overlook.
- The Sims: The Sims is a multi-generational classic that literally simulates the process of educational attainment, labor, budgeting, and financial planning. It’s a great way to teach children of all ages about taxes, utilities, and saving for material goods.
Crucially, educators cannot assign students video games and believe their job is done. For video games to be educational rather than pure entertainment, educators must prompt students to think about the skills they’ve learned along the way.
For example, a teacher who assigns a semester of Stardew Valley should pair this “homework” with regular formal and informal reflections. This may mean that they ask students to free-write about the financial lessons they’ve learned while gaming–or, when larger projects are due, ask students to produce presentations that reflect their financial progress within the game.
Educators will still need to talk about real-world financial concepts, too. This ensures people can successfully apply their knowledge of NMS’s “Units” and The SIm’s Simoleons to real monetary concepts like debt, cash flow, and investing.
Getting started with real money
Teachers who lead personal finance classes can’t tell students what to do with their own money. However, they can give students the best chance of making their cash go further by giving them access to reliable resources. Educators can guide students through potential pitfalls that many young people face, too.
For example, teachers who are leading a class of older students may want to deliver a few lessons on best practices when they open a bank account. This includes:
- Collecting documents: Students will need a valid form of ID in addition to basic identifying information like an SSN.
- Proof of address: Most financial institutions require evidence of proof of address.
- Choosing an account: Opting between a checking and savings account will ensure that students are storing their money in the right place for their needs.
- Understanding fees: Students should be aware of fees placed on accounts that don’t meet their standards. For example, some banks require a minimum amount in savings accounts or will charge for the service.
Teaching young people how to open their own accounts can help people escape financial abuse, too. This is crucial, as 65 percent of teens have reported that others have exerted financial control over them, and may be at a heightened risk of facing financial abuse. For many, opening their own bank account marks the first step towards regaining control of their finances.
Digital tools can aid efforts to teach key financial concepts related to saving, spending, investing, and budgeting. Even simple video games, like those offered on Roblox, can improve financial literacy and empower students to take control of their finances. However, educators who do decide to invest in edtech need to ensure that engaging digital lessons are followed up with reflections and robust testing.
