Teaching Financial Literacy In Elementary School
According to a recent article on Yahoo Finance, an experimental elementary school on the south side of Chicago named Ariel Community Academy has a unique focus on teaching financial literacy. The concept is simple. Each first grade class is bequethed a $20,000 portfolio managed by the experts at Ariel until the students reach the 6th grade. Along the way, young students are taught the basics of economics, personal finance, and investing. Then, in the 6th grade, Ariel begins passing the torch off to the students, who do research, make investment decisions, and even write their own business plan in the 8th grade. Along the way, students have access to free tutoring from Ariel professionals on saturdays and even the chance to sit in on meetings at McDonalds Corp, where Ariel founder John Rogers Jr sits on the board. Upon graduation after the 8th grade, each class returns the original $20,000 investment to the incoming first-grade class and donates, invests, or pockets the the rest.
I think this is a brilliant idea. With the easy availability of credit and constant barrage of marketing to youngsters, it’s more important than ever to innoculate children against foolish financial decisions. I see financial irresponsibility as one of the primary social problems of our day. It’s certainly how we’ve managed to get ourselves into our current situation of mounting national debt and unfundable entitlement programs. By teaching personal finance early, there is a real chance the next generation will be more financially wise and responsible than we are, which is a good thing because they will have to deal with all the debt we’ve left for them.
Unfortunately, most elementary schools are not so wise as the Ariel Community Academy. If you have children, it is of the utmost importance that you teach them the value of a dollar and the rewards of saving, investing, and delayed gratification. For ideas along those lines, you should check out Get Rich Slowly’s excellent post How To Innoculate Your Children Against Advertising. By raising a savvy consumer and shrewd financial manager, you prepare them for a sometimes scary and confusing real world as well as dramatically increasing their chances of success.