How to Help Online Students Learn Financial Literacy While Running Errands

February 22, 2023 byElizabeth Preston

7 min to read

A young girl is placing a coin into an education jar

Money management is key to being fiscally responsible and financially successful. Yet only seventeen states in America require a personal finance course in public schools to teach some form of financial literacy—the knowledge and ability to understand and use financial skills, including budgeting, investing, tracking one’s spending, using debt responsibly, and saving for retirement.

The historical, significant absence of financial education may have contributed to over 33.5 million Americans spending more than they earned in the last six months of 2022 and over 61 percent of Americans living paycheck-to-paycheck, which includes an 11 percent increase from 2021 to 2022 in those earning $100,000 to $150,000 annually.

The Financial Industry Regulatory Authority (FINRA) finds that of those Americans with high financial literacy, 53 percent spend less than their incomes and 65 percent have a three-month emergency fund set aside. So teaching financial literacy can have a positive effect on students’ long-term financial stability.

Learning Coaches can start teaching students financial literacy at any age, even as early as elementary and middle school, and much of this education can be done while running errands.

Here’s how to teach students financial literacy.

The Value of Money

Value is not necessarily the price tag of an item or service. Rather, value can be thought of in terms of how much work and effort a person is willing to do to obtain that item or service, and its value to someone can be different than its price. Teaching students to think of money as representative of their work takes the abstract concepts of value and money and makes them tangible and real for students.

How to Teach the Value of Money

While shopping, pick up various items—ones that the student wouldn’t like and ones that they would like—and let your student examine the items without letting them see the prices. Ask the student how much they feel the item is worth. Then compare the actual price to the student’s estimate. This will help the student compare their perception of value with how others view it.

You can take this a step further by explaining the value of an item in terms of the student’s chores. This will help take the obscure (and at times, confusing) concept of value and put it into relatable terms for the student. For example, ask the student if a shirt they want is worth cleaning the dishes for four nights. What about five nights? At how many nights would the shirt feel like a “good deal,” and at how many nights would the shirt feel like it’s not worth the work?

Needs Versus Wants

What we need versus what we want are two different concepts, and it’s vital students learn the difference to have a solid financial education. A need is something that you must have to survive, such as food and a place to live. A want is something that you desire but is not essential for you to function, work, and exist, such as a gym membership or a streaming service subscription.

Students must learn the differences between these concepts so they’ll be able to create their own lists and know what they must spend their money on and what is considered optional when they are adults.

How to Teach the Difference Between Wants Versus Needs

While you’re out grocery shopping with your student, present two items to them. Ask which one they need and which one they want. Put the “want” item back, but keep the student’s chosen “need” object. Pick up another item and ask the student again which item the student needs and which one they want. Repeat the process to help the student understand that what they think they need may be a want.

This also presents opportunities for you as a parent or Learning Coach to explain why something may be a want instead of a need. For example, while a student may think that a frozen dinner is a need, it is actually a want when compared to clean water.

Another option is to offer two similar items of different quality. For example, you could hold up a brand-name cereal and a generic cereal and ask the student which item is a need and which one is a want. This will also give you an opportunity to discuss cost comparison with your student.

A parent teaching an online student financial literacy.

Cost Comparison

Cost comparison is when you compare two or more products in terms of their price and value, and it is vital to a good financial education. Sometimes the price difference between two items doesn’t accurately reflect their values, but this is highly dependent upon who is doing the purchasing and what they value.

How to Teach Cost Comparison

Difference in Value

One way to teach cost comparison is by showing a student two comparable items and asking them to explain the differences between the items. Then ask them if those aspects are worth the items’ price difference.

For example, show your student a brand-name ketchup and a generic ketchup. Have the student explain what the differences are between the two ketchups—everything from taste to look to label to size, etc. Then ask the student if the differences that they described seem worth the variance in price.

Difference in Price

Another aspect of cost comparison is how much items are per unit of measurement, such as ounce, milliliter, number of items per package, etc. Many grocery stores have labels that give an item’s overall price and how much the item costs per measurement. By teaching students how much an item costs per measurement, you can show them how some items are more expensive than other items, even if they don’t appear to be at first glance.

For example, ask your student to pick out two different detergents. Then ask how much per ounce each detergent is (this is a great opportunity for a math lesson as well). This will help the student understand which item is more expensive and which one is cheaper, and will lead you to teach budgeting to your student.

Basics of Practical Budgeting

Budgeting is creating a plan for how money is spent, and it considers a person’s income, needs, and wants.

If you’ve taught your student about wants versus needs and about what value means, then you’ve set a good foundation for your student to understand the basics of budgeting.

How to Teach Budgeting

You can teach budgeting to your student by making them a part of your budgeting process. Show them on paper (you may want to use round numbers for easy calculations) what money comes into the household, what money needs to be spent on household needs, how much is spent on wants, and how much is saved.

Then when you’re out running errands with them, put your student in charge of telling you how much you can spend at each store and ask them why that is the amount you’re able to spend there. By asking them why, you push them to think critically about how that number was generated and what that number means in a real-world context.

You can also put them in charge of keeping track of how much you spend at the store, to build your student’s money-management skills. To have your student continue to think critically, consider choosing items you don’t need so your student has an opportunity to tell you to put them back. Ask your student why you must put that item back, and this will give them an opportunity to apply their lessons on wants versus needs, value, and staying within a budget.

While pointed lessons are undoubtedly valuable to students learning financial literacy, Learning Coaches can also teach students these lessons by modeling the behaviors themselves. They can even make it into a game where they compete with students to see who can find the best deal on an item or who can find the best deal of the day. Financial literacy is as much seeing and doing as it is classroom learning.