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Phoenix Forward magazine

How to improve financial literacy in kids

David Lockett

You might not think a second-grade classroom would be the best place to teach money management. But that’s exactly where University of Phoenix doctoral student David Lockett is pioneering financial literacy for children.

Lockett’s home state of Tennessee launched a statewide initiative in 2010 to teach financial literacy in public schools. After Lockett attended a state-sponsored workshop on the topic earlier this year, he offered to help develop curriculum for kids in kindergarten through second grade.

“I was already teaching basic money concepts like coin recognition in my classroom,” Lockett explains. “Our school’s students rank in the top 5 percent in the state on [performance],” he adds, referring to Homer Pittard Campus School, “and I wanted to see if we could bring that achievement level to the rest of the state somehow.”

Lockett, who is pursuing a doctorate in educational leadership, says his work has received accolades from Tennessee First Lady Crissy Haslam and Speaker of the Tennessee House Beth Harwell, as well as U.S. Senators Bob Corker and Lamar Alexander.

“They were very excited that we wanted to do financial literacy in elementary school,” he says, noting that his curriculum is being adopted statewide. Here, Lockett explains four ways to teach financial concepts to young children:


Use play money.

Plastic coins and paper bills that look real help students recognize currency amounts and types. “When you’re working in this age group,” he says, “hands-on learning is essential.”

He notes that these tools help students learn about handling money in typical situations, such as paying for a candy bar or counting back change — simple addition and subtraction, along with finance.

“Parents come to me amazed that their kids are counting back how much change [they] should receive when they buy a bottle of milk at the grocery,” Lockett says.


Talk about real-life examples.

“I like to bring social studies concepts, like the difference between goods and services, into my lessons,” Lockett says. For example, he shows kids that a toy is a good, while a swimming lesson is a service — and both cost money. “Tying all of these concepts together is also important under Common Core” education standards, he notes.


Explain financial vocabulary.

It’s never too early to introduce financial terms like “tax,” “interest rate” and “transaction,” Lockett asserts. For example, he explains to kids that you pay taxes to the government to build roads and schools, that interest is extra money you pay when you borrow some and that a transaction is when you buy something, like an ice cream bar.

“It’s important for kids to learn this vocabulary early,” he says. “And they do apply it. I had a parent take me aside to tell me his son pointed out posted interest rates at the bank.”


Describe savings and debt simply.

Money isn’t just for spending, Lockett emphasizes to his students. “We talk about making choices,” he notes. “For example, what happens if you spend more money than you have? Would you have to get another job to pay the money back? Would you have to stop buying toys and ice cream for a while?”

He says he’s teaching skills children can apply throughout their lives, noting, “Financial literacy is a long-term investment.”

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