Financial Education in the Math Classroom

The consumer education movement aims to teach people how to seek out, use and evaluate consumer information so that they can improve their ability to purchase or consume the products and services they deem most likely to enhance their well-being. It seeks to teach consumers how to interact in the marketplace in a way that allows them to make the best consumption choices for themselves, given their values and lifestyles. (p. 33)                                              Bloom  & Silver, Harvard Business Review, 1976

In 2006, the Financial Literacy and Education Commission (FLEC) published: “Taking Ownership of the Future: National Strategy for Financial Literacy,” which defined the purpose of financial literacy as to: “empower consumers to be better shoppers” (p. v), to help deal with a “market place that is constantly changing” and to “understand and select the products and services that best suit their needs” (p. vii).

Learning to Read the fine Print: We have to find ways to help students learn to care about the details – learn to ask questions, learn to think it’s worth investigating financial agreements

Show Students the Fine Print (see examples below):

• Let them read it
• Let them make what sense they can of it
• Let them ask questions about it and explore outcomes

Credit Card Examples:

APR or “annual percentage rate” is an annualized interest rate. Different APRs may apply to different balances on your account, such as your purchase balance or your cash advance balance. We use the APR that applies to each balance to calculate the interest that you owe us on the account.

The bill we send you will state your due date and the minimum amount that you must pay us by that date. This amount is your minimum payment. If you do not pay the minimum payment by the due date, we may charge you a late payment fee. You will also be in breach of the contract.

You may pay all or part of your account balance at any time. However, for each bill, you must pay at least the minimum payment by the due date stated on that bill.

Sample problem from the Math Forum’s Financial Education focus:

Choosing Charity

In the wake of the recent tsunami, a company decided to donate to a disaster relief fund. The company started by pledging a certain amount of money. To encourage their 60 employees to make individual contributions, the company pledged to also donate an additional fixed amount for each employee who made a personal donation to the fund.

The company treasurer determined that if one-third of the employees chose to make a donation, the company’s part of the total donation would be $7000. If 50% of the employees donated, the company’s part of the total donation would be $7750.

Find an equation that expresses the company’s part of the total donation in terms of the number of employees who donate.

If every employee chose to donate, what would the company’s part of the total donation be?

If the company’s part was $8875, what percent of the employees chose to make personal donations?

Tools to Start Conversations & Develop the Practices of Financial Decision Making:

Living Wage Calculator

Council for Economic Education’s National Standards for Financial Literacy

CFPB’s Credit Card Contract Definitions

How long will it take to pay off my credit cards

True Cost to Own a Car

What is my employee total compensation package worth?

National Endowment for Financial Education — resources for educators, check out the High School materials

Charity Navigator

Mathalicious (follow on twitter @Mathalicious) is committed to providing engaging lessons based in real-world contexts. Mathalicious has a couple great lessons that explore mathematical ideas using a real-world financial context. What I like about these lessons are that they are a true marriage of mathematical ideas (they are all aligned to the Common Core State Standards) and genuine exploration of the financial concepts as well.

One example great example is Big Foot Conspiracy, in which students examine the pricing structure of shoes by looking at the cost of children’s vs. adult’s shoes and if it makes sense that a size 6 shoe should really cost the same as a size 11 shoe. Through this exploration students plot data, look at linear and non-linear relationship and compare unit pricing by weight. This lesson helps potential entrepreneurs think about setting prices based on the cost of materials and whether or not potential customers might respond well to various pricing schemes.

A couple others I like are: Go Big Papa in which you explore how good pizza deals really are and iCost which explores whether or not the pricing scheme of apple products is linear. Also keep an eye out for Tip Jar which will be back up shortly, but is being updated as we speak. In Tip Jar, students explore the mathematical concepts of proportional relationships using tables, graphs and equations, solve ratio and percent problems and they also explore not just how to calculate a tip, but also how tipping works in different countries in terms of the percentage of the wait-staff’s salary that is based on tips. Too often I have found that many real world based lessons stop at the tip calculation, the lessons on this site dig deeper and offer opportunities to make real connections between mathematics, financial options and financial decision making.

I have asked teachers I know who are teaching financial concepts in their classrooms to contribute their stories to this blog, this is the first of what I hope will be many to come, courtesy of Maria, a 3rd grade teacher.

My students are third graders and we had a great time using a tool from The Math Forum. It illustrated the difference between gross and net pay by showing the students how to calculate deductions for federal income tax, social security and medicare. The outcome that I was aiming for was twofold:

1. I wanted my students to understand that you don’t get to take home all of the money that you make and

2. The money that is taken out of our pay goes toward running the city and to take care of us when we are older.

It was very exciting for them because they didn’t have any prior knowledge about payroll deductions. They were actually a bit upset and angered because they didn’t want to part with any of their money. This led to another interesting conversation about how the city has bills to pay. First we talked about how their parents have to pay bills and then it segued into the city. We started talking about how tax dollars go towards repairing roads and streets and bridges and tunnels and city workers. The connection to their parents and bills really helped them to understand that the city has bills to pay. This also led to a question: How does the city make its money? From here, we talked about how collecting taxes from people is not the only way the city makes money. I asked if they had any ideas how the city could make money besides charging taxes. One student said, “The city could charge a fee for using the stores.” Then I asked them if they ever crossed a bridge or went through a tunnel and what they had to do either at the beginning or the end of it. Here, they had an “a ha” moment and said in unison, “Paid a toll”. We could have gone on all day with this one activity as it opened up so many sub-topics and conversations. I hadn’t expected it to go this far but was pleasantly surprised by it.

Even though my students are very young, I feel that it is so important to introduce them things that they will have to do as adults.

Welcome to our Financial Education in the Math Classroom Blog! We at the Math Forum want to help create and aggregate useful resources for teachers that will help students see how important math is in understanding money, monetary decisions and money management. We recognize there is a big push for financial education in schools these days and a great deal of concern that students are leaving school lacking skills that are related to money. We also recognize that teachers need to have resources for their classrooms and for themselves, since in most teacher education programs there was was a minimal focus on teaching financial education to students. As we develop our resources, we want to include as much teacher feedback and advice as possible because we feel that teachers are the best judge of what will be useful for them in their classrooms.

What can you expect to see here?

• Relevant and recent articles on financial education topics
• Ideas for classroom activities and where they might fit into common math topics
• Links to Math Forum resources that might be of use
• Resources that seem useful from other people/sites/organizations
• And more…as it seems relevant

Thanks for visiting, hope to see you again soon.