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Learning how to budget money is an important skill for students to master. Here’s how you can approach the topic in your classroom.

Money management isn’t always covered in the course of a typical lesson plan, but it’s a crucial subject for everyone, not just students. Nowadays, there’s the convenience and temptation of online shopping. There are credit card offers flooding our inboxes and our mailboxes. And our investment options are expanding to include things like cryptocurrency.

Without the right knowledge and resources, it’s tough to know how to navigate all of these decisions. How can we prepare our students (and ourselves) to make responsible financial decisions? Start by incorporating these four subjects into your plans.

1. Identifying needs versus wants

“Needs” are things we cannot live without; “wants” are things we’d really like to have but aren’t necessary to survive. With a finite supply of money, which things are necessary to spend money on and which aren’t? One way to illustrate this concept is by drawing a pie chart and giving students the opportunity to color in corresponding sections as they make their spending choices (it’s a great way to teach percentages and fractions, too!).

2. Creating a budget

Keeping a budget is a way to track expenses and build up reserves, or savings. Many Americans live paycheck to paycheck, a situation that can easily turn an emergency into a catastrophe. By planning ahead of time, students can learn how to live within their means and grow their money through investing. Check out these free lesson plans from Practical Money Skills about the basics of building a budget (among other topics).

3. Investing, not just saving

Once you have some savings in the bank, it’s time to think about investing. To that end, students should learn about the cyclical nature of the market in order to make informed decisions. Have them choose a real company that they’re familiar with and check on it each week (not daily). They should do their research and look at the stock’s historical data. This gives students the opportunity to make confident, informed choices when it comes to actually investing their own money.

4. Understanding how credit cards work

Consumer credit card debt can be a tough challenge to tackle, and a huge barrier to investing. Explain to students that using plastic means that you’re responsible for paying the bill when it arrives later. If you don’t, there are serious consequences. Interest hurts when you’re the one paying it — but it’s great when you’re the one earning it through your investments.

More ideas

Financial literacy is so important for anyone at any age. Learning how to plan, budget, and invest money sooner rather than later can lead to significant gains. You can check out TheMint.org for more ideas (with a focus on grades 6-12) to help you teach financial literacy in your classroom.