I have been researching some of the topics being taught in many public schools with respect to handling money. Unfortunately the information isn’t taught in every school and it isn’t taught consistently. However the research information is an accurate picture of information as provided by the “Jump$tart Coalition” to get students young and old the information. I’d like to finish up the topic of “Saving and Investing.” I’ve covered this topic for fourth-graders and would like to finish up for eight-graders and seniors. This article will talk about the eighth-grade target information.
What is the information being taught to eight-graders; what is the information your eight-grader should know?
The areas of saving money and understanding investing money are at the root of being able to make sound financial plans. There are six points or “Standards” that build the structure that houses the knowledge needed.
Standard One requires that “the student must understand how savings helps a person feel secure.”
This information is so important because it teaches the basic premise that you don’t blow your money you may need it later. Sub-topics that can be discussed are the feeling of accomplishment, the necessity of an emergency fund and what a person can do with accumulated funds.
I always gave my kids the example of a young man I knew who had a paper route from about age ten. He saved diligently and when he was eighteen he had enough money to buy a rental property. Of course he is an exception but the idea is that saving money gives a person freedom and opportunity.
Standard Two requires the student understand investing.
It is important that we understand that investing isn’t just the stock market but may be a certificate of deposit or a rental property and in some cases it may not be a monetary investment.
The eighth-grade student among other things should be able to explain the growth of money via interest. The Rule of 72 says that if you want to know how long it will take your money to double at a particular interest rate you must divide that interest rate into 72. For example if you are getting eight percent on your money it will take nine years to double it. I’ve linked to the online tool.
I like this task: The students are expected to calculate the cost of a wedding or four-year college education and then they are required to figure how much they should save to have the necessary money when the time comes.
Standard Three asks the student to evaluate investment alternatives.
Investment alternatives for an eighth-grader would include comparing individual stocks and bonds with the concept of mutual funds. Further the student would look at the differences of stocks and bonds and precious metals.
The hardest thing to do is to use specific tools to specific financial goals.
Standard Four asks the student to “describe how to buy and sell investments” according to our reference material.
Actually what this is asking the student to do is find ways to compare and examine resources for investments.
Standard Five asks the student how taxes affect investments with specificity regarding tax-free earnings under age 18.
Standard Six asks the student to investigate regulating agencies.
This is a fairly simple request for this age group. They need to understand how deposit insurance works.
Saving money and looking at the possibility of investing is far from most eight-grader’s minds. Clothes, social life, music and things such as game systems and sports take up their time.
The idea of money and investing is at the base of understanding finance. As I say in every article we must teach our young people about money at school and home considering the economy we live in.
Money Chimp Website, “Rule of 72”
“Saving and Investing,” Article, “Eighth-Grade Expectations” Jump$tart Coalition for Personal Financial Literacy, Charles Schwab