Financial literacy is an area of education that is often overshadowed by more traditional subjects like English, science, biology and mathematics. In an effort to better prepare kids concerning their knowledge of personal finance principles, a third-grade teacher in North Carolina — Shelby Lattimore — began a “simulated economy” for her students, per Business Insider.
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The system includes pretend money which they earn by completing “jobs” like cleaning up. They use this currency to purchase rewards like homework passes or free time — but they also need some of it to pay “rent,” or access to their desks. Students that fail to save enough money have to sit on the floor, in theory. There are also “fines” for being late on payments or assignments.
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Lesson Inspired By a Lack of Financial Awareness Among Americans of All Ages
Part of the inspiration for this viral activity was the teacher’s awareness of certain economic realities.
“A lot of my kids come from families that live check to check and are not in the best financial situation, so I don’t think they’re too young to ever learn how to handle money, how to use money, and how they want to use their money,” Lattimore said in a TikTok video. This position aligns with the broader state of financial literacy in the United States, as Gitnux data indicated:
78% of adults are considered financially illiterate.
16% of students have a personal finance class as a requirement in their school.
53% of adults feel nervous when dealing with their finances.
41% of adults use a budget.
63% of adults could not pass a basic quiz on financial literacy.
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Lattimore’s Money Lessons Pay Off
The above statistics speak to the astute classroom decision, by Lattimore, to provide her students with an opportunity to learn about personal finance. As elementary school students, they will be thinking about finances from an earlier age and be more used to the fundamental concepts. Of course, part of the reason her program went viral is that it is not the norm.
Parents can teach their kids by having them help with household bills, in however modest a fashion. Lattimore’s success suggests that kids are able to grasp concepts like saving and budgeting from a younger age than might have been previously assumed. Here are 6 reasons why you should have your kids help with monthly household bills.
There’s a good chance they won’t learn about it from classes in school.
They’ll build smarter habits for the future, per Kids’ Money, like how to handle the process and understand the importance of being on time with bills.
They’ll be more familiar with money pressures, and less likely to feel nervous dealing with their own finances.
You’ll be less likely to have to help them with their bills as adults.
You’ll be preparing them for the value of a good credit score and having ample savings.
Teaching them about savings and budgeting will reduce the chance that they make unnecessary purchases — or find themselves unable to pay for an emergency or other surprise expense.
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This article originally appeared on GOBankingRates.com: This Teacher Charged Third-Graders ‘Rent’: 6 Reasons Why Your Kids Should Help Pay Monthly Bills
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