Fiscal responsibility is not on most 9-year-olds’ radar.
OpportunityTexas hopes to change that with a groundbreaking study that included students in Amarillo and Eau Claire, Wis.
The two-year study focused on fourth-graders involved in Happy State Bank’s Kids’ Bank program in Amarillo elementary schools and students in a similar program in Eau Claire.
The study was supported by the Department of Treasury and created with the help of the Corporation for Enterprise Development and the Center for Financial Security at
the University of Wisconsin-
“Any time that we can do anything relevant to real life, math or just being a good citizen, saving money, and working that together with school, it gives the kids lots of good opportunities to experience real-life functions,” said Helen Rains, a fifth-grade teacher at Windsor Elementary School.
The Kids’ Bank program, which is ongoing despite the study’s end, provides access to savings accounts as a way to teach money management skills.
Kids’ Bank expanded from three to 15 Amarillo elementary schools as part of the study. Half of the students in the program received a $25 deposit if they opened an account.
The accounts were co-owned by the student and a parent or guardian. Students were encouraged to make deposits at the school-based Kids’ Bank, and fifth-graders served as tellers.
To encourage saving, students could only make withdrawals at a brick-and-mortar bank.
During a five-week period, all fourth-graders, regardless of whether they had a Kids’ Bank saving account or not, received six 45-minute financial literacy lessons in their math classes, covering topics such as reasons to save, how interest rates work, budgeting skills and how to read a bank statement.
In Amarillo schools, the lessons were adapted to address new state curriculum requirements that incorporate financial literacy into math courses that will go into effect next school year.
The courses introduce kindergartners to concepts like income and distinguishing between needs and wants.
By fifth grade, students will have learned about taxes, basic banking concepts and how to balance a budget, according to the math Texas Essential Knowledge and Skills, the state curriculum for public schools.
The goal of the two-year study was to determine the dual effectiveness of these lessons and the experience of managing a savings account, said
OpportunityTexas coordinator Laura Rosen.
Students in the program showed improved financial knowledge a year later, according to the study.
“The impacts of both education and in-school banking persisted for a year, so it suggested it might be a way to shape students’ future attitudes about savings and financial institutions,” Rosen said.
Students had more positive attitudes on saving after being in the program, according to the study.
“We had kids bringing money from their piggy banks and that kind of thing, so it increased their knowledge and enthusiasm about money and saving,” Windsor Assistant Principal Camillia Johnston said. “So, I think during that period that our savings deposits increased.”
Schools with more economically disadvantaged children had the same or higher Kids’ Bank participation rates as students from more affluent families, according to the study.
Junior Achievement of the High Plains also gets started early on teaching financial literacy skills.
In second grade, JA students learn about local economies and taxes, and in fifth grade, they learn the basics of saving and financial responsibility.
“It sets the groundwork for understanding later on when they get to where they have their own income,” said JA executive director Teresa Hillman.
“We’re teaching them the importance of managing their money effectively, so no matter what their income is, they’re able to have a good credit score and have a savings account and that type of thing.”
Kids’ Bank started in 1997 and has expanded to 30 schools and nine communities in the Texas Panhandle.
Fifteen of the schools that participated in the study decided to continue their Kids’ Bank programs.
“I think when you look at our economic status right now in the U.S., there is certainly a trend that we are a spend, spend nation,” Johnston said, “so I think introducing students to saving and being money-smart, so to speak, is important, not just for them, but to the larger community, the global economy, even.”