How to Engage High School Students in Financial Literacy (2024)

As educators who teach personal finance, we all share the same goal. We want to help students understand that financial literacy is an important component of building long-term financial security and is a critical competency that can affect all aspects of a person’s life now and in the future. The need for financial literacy is paramount throughout an individual’s life. In a national study by the Financial Industry Regulatory Authority (FINRA), they found that only “Fifty-three percent of respondents reported having three months of emergency savings in 2021” as well as “those with higher financial literacy were also more likely to have taken steps to plan for their long-term financial future.” Financial education early in life leads to better decision-making later on.

There are several ways to make financial issues relevant and engaging to high school students. One activity that may appeal to students is simulating a used car purchase. Sharing with them the four phases of research-based buying is a relatable way to help students see the value of financial literacy.

Phase 1: Pre-shopping activities

• Present the students with a scenario where they might need to purchase a car (replacing an older car, needing a larger car, or making a purchase after an accident).
• Have the students research good places in your local area to buy used cars. Online reviews can be very helpful or ask relatives for recommended places.

Phase 2: Evaluating alternatives

• Have small student groups present the type of car that would be best to purchase.
• After choosing a particular car, for example, a used 2021 Nissan Sentra, have the students start with a brief internet search to find a potential car with lower mileage, specific features, and availability nearby.

Phase 3: Determining Purchase Price

• Determine a fair price for the car. Some potential sites might be Edmund’s Used Car Prices or Kelley Blue Book.
• Next, it is helpful to estimate the potential car payments. This would include a discussion on the value of down payments, researching interest rates, and choosing a potential lender.

Phase 4: Post-purchase activities

• Operating costs and maintenance should be addressed.
• A discussion of typical costs (gas, oil changes, tires, and insurance) can be very useful and are often overlooked and can be a big surprise for first-time car buyers.

This activity is focused on helping students follow a methodical process of planned decision-making to help them make wise decisions when making major purchases.

Our students also need to understand that inflation affects the price of many items. We need to stress how a rise in inflation can affect a person’s lifestyle. This is especially true for people at lower income levels and those on fixed incomes because they have fewer resources to supplement their income when compared to people with higher incomes. An activity to show students how prices have changed is to have them guess the price of common items now and at a different time, for example, the year they were born. Calculating the percent change over the specific period of time is also helpful. Here are some helpful websites:

• Egg prices over time.
• Chicken prices over time.
• Bread prices over time.

One last equally important topic is helping students understand how changing interest rates can affect their lives. As teachers, demonstrating how higher interest rates have a significant impact on the cost of owning a home is one method. For example, for a $200,000, 30-year mortgage, an increase from 5% to 6% will increase the payment by $125 per month. This equals an additional $45,000 over the life of the mortgage (30 years x 12 months x $125)! On the other hand, savers and investors will benefit from these same interest rate increases. For a $5,000 investment, compounded annually, an additional 1% increase would be an additional $50 of interest earned for one year. Without basic knowledge about interest rates, our students may not understand how a change in rates could impact their overall finances in the future.

Financial Literacy Standards and Curriculum

All of these examples illustrate the need for financial literacy education. To help teachers and administrators gain support for changes in the high school curriculum, the Council for Economic Education and the Jump$tart Coalition have developed National Standards for Personal Financial Education. The national standards have six primary focus areas: Earning Income, Spending, Saving, Investing, Managing Credit, and Managing Risk. In the earning income section for the high school curriculum, one of the standards is “People vary in their opportunity and willingness to incur the present costs of additional training and education in exchange for future benefits, such as earning potential.” One of the learning outcomes states, “Compare earnings and unemployment rates by level of education and training.” For teachers, this is a great opportunity to help students research different career paths that they may be interested in and highlight the value of education in relation to higher wages. Teachers can provide the gateway to help strengthen and support students’ financial literacy journey.

The push for financial literacy is gaining momentum. Multiple states have adopted financial literacy legislation that supports the need for financial literacy education at multiple grade levels. As of March 2023, 18 states have mandated financial literacy education as a component of high school graduation. Administrators at many levels are in the process of identifying the best methods to ensure that students attain the knowledge they need for their financial future.

The need for high-quality, financial literacy education is significant. Teachers play an important role in adopting and delivering the curriculum that will help students improve their financial literacy. To help meet this need, we have adapted our #1 market-leading college textbook, Focus on Personal Finance, for the high school market.

The new high school program, Focus on Personal Financial Literacy, includes both print and digital components with assignable problems and a multitude of real-life, assessment activities.

The new program aligns with the National Standards for Personal Financial Education. To help teachers, we also have a teaching blog that posts materials every two weeks to provide current, timely material to supplement lesson plans and class discussions.

About the Authors

Jack Kapoor
Dr. Jack Kapoor is a professor of business and economics in the Business and Services Division of the College of Dupage, where he has taught business and economics since 1969. He received his BA and MS from San Francisco State College and his EdD from Northern Illinois University. In 2000, Professor Kapoor was awarded the Business and Services Division’s Outstanding Professor Award. Dr. Kapoor is known internationally as a co-author of several textbooks including Business: A Practical Approach (Rand McNally), Business (Houghton Mifflin), and Focus on Personal Finance (Richard D. Irwin/McGraw-Hill).

Les Dlabay
Les Dlabay teaches in the Department of Economics and Business at Lake Forest College in Lake Forest, Illinois. Over the past 25 years, he has taught more than 30 different courses in high school, community college, university, adult education, and teacher preparation programs. Dr. Dlabay has developed a wide variety of textbook materials, student activity guides, instructor manuals, testing programs, audio-visual materials, and software packages in the areas of personal finance, consumer economics, and international business. Dr. Dlabay has served as a consultant to corporations, educational institutions, and government agencies. He has presented more than 140 workshops and seminars in over 20 states to encourage teachers to actively involve students in the learning process with video presentations, newsletters, interviews, and internet research activities.

Robert J. Hughes
Robert J. Hughes is a professor of business at Dallas County Community Colleges. He believes that “personal” and “finance” are two words that can literally change lives. Whether you want to be rich or just manage the money you have, the ability to analyze financial decisions and gather financial information is a skill that can always be improved. In addition to writing several textbooks, Dr. Hughes has taught personal finance, introduction to business, business math, small business management, small business finance, and accounting since 1972. He also served as a content consultant for two popular national television series, It’s Strictly Business and Dollars & Sense: Personal Finance for the 21st Century. He is the lead author for a business math project utilizing computer-assisted instruction funded by the ALEKS Corporation. He received his BBA from Southern Nazarene University and his MBA and EdD from the University of North Texas. His hobbies include writing, investing, collecting French antiques, art, and travel.

Melissa Hart
Melissa Hart is a permanent lecturer in the Poole College of Management at North Carolina State University. She was inducted into the Academy of Outstanding Teachers and nominated for the Gertrude Cox Award for Innovative Excellence in Teaching and Learning with Technology. She teaches courses in personal finance and corporate finance and has developed multiple ways to use technology to introduce real-life situations into the classroom and online environment. Spreading the word about financial literacy has always been a passion of hers. Each year, she shares her common-sense approach of “No plan is a plan” with various student groups, clubs, high schools, and outside organizations. She is a member of the North Carolina Association of Certified Public Accountants (NCACPA) where she serves on multiple committees. She received her BBA from the University of Maryland and an MBA from North Carolina State University. Prior to obtaining an MBA, she worked eight years in public accounting in auditing, tax compliance, and consulting. Her hobbies include keeping up with her family’s many extracurricular activities and traveling to enjoy the many cultures and beauty of the state, the country, and the world.