Teaching Personal Finance in the Urban Environment

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My first semester teaching Personal Finance to eighth graders has just ended.  This is the first time our middle school has offered this type of course where I teach.  I teach at an urban public school in Little Rock, Ar.   The previous 3 years that I have taught there, I taught Computer Business Applications that included programs such as Word, Excel, Google Docs, Sheets, and many others.  My undergraduate degree is in Finance so when this opportunity opened, I accepted it gladly.

I have learned so much from teaching this course and have found it to be extremely relevant to both the student and anyone else that will listen.  Here are some major takeaways:

Terminology– I regularly have used finance terms in my everyday language with the assumption that people have a basic understanding of what they mean.  Terms such as budget, expense, debit, credit, and most others were totally foreign to most of the students I have.  Even the most basic terms were abstract.  When I began the Investing Unit, most of my students had no concept of things like the stock and bond market and the learning curve was very steep.  Lesson learned:  Do not assume anything.  Start from the very beginning.  

Circumstance/Poverty Level– About half-way through the semester, I had an epiphany that totally changed the course of direction that I was going.  I realized was teaching students how to manage something that they had very little or none of (money).  It was similar to training a mechanic without having a car to work on.  One student told me that he could skip the investing portion of my course as he had nothing to invest much less have anything to budget.   I was talking about things that were so foreign in their everyday lives that I needed to redirect my focus before we all left discouraged and frustrated.  I began to redirect our thoughts on ways to make money as young people.  We started to develop the mind of an Entrepreneur and used our imaginations on how we could acquire funds even if it was very limited.   I relayed how I taught my own kids years ago that every time they went through a drive-thru to get out and check in front of the cashier’s window and check for change on the ground.  Pick up that aluminum can etc. $.07 cents here, $.25 here starts to add up for a young person.  There is one thing my students know how to do – SURVIVE.  We had a lessons on how to see a problem, then find a solution and monetize it.  It was incredible to hear some of their ideas.  Before the end of the semester, kids were  helping teachers clean and organize their rooms, doing odd tasks, selling snacks, and doing things in their community and around home.  Then and only then, concepts like budgeting, saving, and shopping wisely made much more sense.  Lesson learned:  “Teach people how to catch fish before you teach them how to clean fish”.

Core Subject Dependency-I found this the hard way when I began to teach them about interest, compound interest, tax rates and anything else that involved decimals.  I was receiving assignments that were so far out there and many were completely blank.  I even started to think the students were rebelling or some other underlying reason as to why the performance was so bad.  Either the grades were A’s or F’s among the students and there was no in between.  As a matter of coincidence, we had a professional development in which we were given math and reading data from our many standardized testing sessions.  A large majority of my students  were many grade levels below in reading and math.  Not only could they not do the math, the reading comprehension on how to do it was not there.  Thus, the blank assignments.  The curriculum did not take into account the lack of knowledge of core subjects. I backtracked and explained the concepts on the smart-board and had lessons on decimal conversions and spent much more time teaching them the importance of why they should learn math and reading.  Personal Finance depends on it.  Without it, there will be no climbing out of the vicious cycle of poverty that plagues inner city students.  Lesson learned:  First, know beforehand where each student stands in Math and Reading.  Secondly, give the student a real tangible reason to learn how to read and do math.  Math, Reading, and Personal Finance can literally change the destiny of someone’s life.

The acquired knowledge of Personal Finance travels upstream:  In most circumstances, the adult usually teaches the kid.  This is not the case in the urban setting for Finance.  For generations, Personal Finance was never taught in schools.  Whole generations were thrown into the real world with no knowledge of banking, investing, saving, and accumulating wealth.  They simply walked around with the cash in their pocket and hoping to keep enough it in there until they got paid again.  Vultures preyed on this community for so long knowing full well this was the case.  Now, for the first time in this subject, students are going home and teaching their loved ones the concepts they are learning.  Concepts that should have been taught in our cities years ago.  Concepts, if applied consistently, will start to lift those out of poverty and begin to turn the tide that has been so prevalent for so long.

The magnitude of realizing that being on the front-lines has made teaching Personal Finance a calling and a purpose.  One that will hopefully give the tools to those who wish to lift themselves out of the cycle of poverty.  “Money cannot buy happiness, but it can give you the freedom to find it”-Coach Albert

2 Comments to “Teaching Personal Finance in the Urban Environment”

  1. Thank you Mr. Buffett!

  2. This is an awesome explanation of your classroom and the challenges we have as a society to teach Finance to young people.

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