Financial literacy is an essential life skill that students need to have and train from an early age. Good financial literacy taught by teachers and parents will prepare them to become wise individuals and have reasonable financial security goals. Then, how do you grow financial literacy intelligence for elementary school students? The following are educational steps that teachers can take.
- Wants VS Need
The first step that needs to be done by the teacher is to help students to have the ability to distinguish between needs and wants. Need is something they must have to survive. But wants are something they absolutely don’t have to afford. If this awareness has been formed since childhood, in the future, students will have a strong stance in making financial decisions.
To teach students about making purchasing decisions between these needs and wants, teachers can use a chart to assist with the following explanation.
- Box A: The levels of needs and wants are both high. This usually relates to school equipment.
- Box B: Low need but strong desire. Usually, this is related to hobbies. For example, buying items related to idols.
- Box C: Don’t really need and don’t really want. For example, when students see something exciting and adorable on social media, they are interested in buying it.
- Box D: The need is high, but the want is low. For example, matters relating to investment or saving activities from an early age.
Now that the teacher has explained the analysis of the chart above, here is a chart to help make decisions.
In Box A’s analysis, the decision must be taken to do it immediately. The conclusion that must be made in Box B is to conduct research and determine the priority level in advance so that there are essential things that must be purchased first and things that must be postponed or replaced. Students can also star each item to help them decide on a priority list. If the item has the most stars, then the item needs to be prioritized. The decision in Box C is that students should avoid these purchases by reducing their surfing time on e-commerce platforms, or social media, thereby reducing their opportunity to be exposed to advertisements of unwanted goods.
The decision in Box D is to invite students to reflect on whether or not they often spend money on something that could be more useful. Teachers must teach students to postpone short-term pleasures to gain long-term pleasures. There are 4 (four) levels of delaying fun.
a. Low: Buying something with debt. This is meaningful if someone can’t put off their desire for fun or their wish. An example is using the pay later feature using an online expense application online to get the desire as soon as possible. This is usually done by middle and high school students; meanwhile, elementary school students habitually borrow money from friend
b. Medium-low: We already have money, but the money is directly spent. The better thing to do is to save in advance in order to anticipate running out of money in the event of an emergency.
c. Middle up: Save first, then allocate part of their savings to buy wishes. This is undoubtedly better than the two points above because at least students can hold their desires without emptying their savings.
d. Top: Students already have savings deposits, then interest from savings is used to buy wishes. Or also, students already have passive income, so there is no need to deduct from the central finances to buy wished for items.
2. Spending Money Wisely
The second stage is to teach students to get used to checking and measuring passive expenses, which so far have yet to be fully realized because they still use their parents’ money. For example, there are monthly auto debit expenditures for optional applications, such as watching movies, listening to music, online game applications, and so forth. Teachers must remember that something that needs to be measured can never be improved. For this reason, students need to learn to record, calculate, and analyze which parts of spending are consumptive and which are productive expenses.
Something consumptive will ‘eat’ us, meaning our money will continue to run out to buy these goods, so planning finances never go well. Some expenses seem consumptive, but are actually productive, such as attending training, tutoring, etc. This looks like spending money consumptively, but it is truly effective because it is included as a long-term investment.
3. Budget Planning & Expenses Tracking
Invite students to make spending targets within a particular time. From the start, invite students to allocate funds with a certain percentage to be spent based on interest categories, namely for savings, desires such as snacks, and also to be distributed as charity. Teachers must patiently invite students and work with parents to educate students to make simple investments and share what they have. It is not the amount of money saved or the amount of charity that we see from children, but the most important thing is how children get used to being disciplined and grow into money-literate individuals with have good financial habits. With this habit, students will undoubtedly grow and produce goodness.
Let’s start giving financial literacy to students!
