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21st Century Skills - Financial Literacy

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Financial literacy is closely connected to an individual’s emotional, personal, social, economic, and employment success. An individual needs to understand the basics of money management, and use financial resources appropriately to function well in society at a personal, professional, business and community level. In a broader sense, students need to identify and discuss significant economic issues, important to society and to the world. They should practice examining the consequences of change in economic conditions and public policies. (The enGauge 21st Century Skills, 2003)

As society changes, the skills needed to deal with the complexities of life also change. The meaning of skills like financial literacy may change to reflect context, or current realities. Financial literacy, however, is about empowerment, the ability “…to access, manage, integrate, evaluate, and create information in order to function in a knowledge society…” (ICT Literacy Panel, 2002)

The vision articulated by the Iowa Core Curriculum 21st Century Skills Committee states: Each student in Iowa’s schools will learn financial literacy concepts, enabling them to succeed in a complex global environment. The essential concepts and skill sets for financial literacy address the requirements outlined in Iowa legislation Senate File 2216. They also reflect broader, universal skills that cultivate critical thinking and responsible citizenship. They provide us the framework and knowledge to be proactive. When we accept responsibility for our actions because they have consequences for other people as well as for our personal success, we will also understand what it means to solve the problems and face the collective challenges of an increasingly diverse and interconnected world. (OECD, 2005*)

*The Definition and Selection of Key Competencies, or the DeSeCo, Project. Overview. Organization for Economic Co-operation and Development, 2005

 

Kindergarten-Grade 2

Essential Concepts and/or Skills

Demonstrate the ability to set goals based on wants and needs

Develop short-term and long-term financial goals.

  • Define goals.
  • Identify a personal goal.
  • Identify a group/team goal.

Understanding needs vs. wants.

  • Define wants and needs.
  • Know the importance of needs and wants.

Identify monetary resources and distribution options for those resources 

Develop a realistic spending plan for financial independence.

  • Describe the exchange of goods and services as part of the monetary system.
  • Identify the outcome of spending money.

Understand various sources of compensation.

  • Recognize sources of income for children such as allowances and gifts.

Understand the distribution of resources.

  • Explain spending versus savings.
  • Recognize that items cost money.

Understand financial instruments.

  • Distinguish different types of money (bills, coins).
  • Identify the values of each type of money.

Demonstrate an understanding of the concept of credit

Identify responsible credit management.

  • Discuss the meaning of credit.

Understand different types of debt.

  • Recognize the concept of the money behind the credit.

Understand rights and responsibilities as borrowers.

  • Explain that a borrowed item needs to be returned.
  • Demonstrate that if loaned, an item should be returned.

Develop awareness that each person has an identity

Establish strategies for protection of identity.

  • Describe what an identity is.
  • Recognize that everyone has an identity.

Recognize different types of insurance.

  • Recognize ways people can lose possessions.
  • Demonstrate ways to protect possessions.
  • Recognize the consequences of loss.

Recognize different types of non-insurance protection.

  • Explain how written notes, emails, or phone calls between school and home can help prevent misinformation.
  • Recognize the role of adults in providing safety.

Recognize various ways to save and the reasons individuals decide to save

Recognize investment options.

  • Identify the value of saving.

Distinguish investment options.

  • Explain the difference between a piggy bank and financial institutions.

Understand the relationship between investment risk and return.

  • Explain that something loaned may or may not be returned.

Distinguish between appropriate spending choices

Recognize the local, state, national, and international impact of personal financial habits and actions.

  • Recognize that the Internet connects people around the world.
  • Recognize that people come from various cultures, backgrounds, and home situations.

Demonstrate responsible financial behaviors, at the personal, local, state, national, and international levels.

  • Recognize that individuals have choices in spending and saving.
  • Explain that there are appropriate behaviors and expectations for different settings.

 

Grades 3-5

Essential Concepts and/or Skills

Create long and short term goals based on a prioritization of wants and needs

Develop short-term and long-term financial goals.

  • Distinguish between short- and long-term goals.
  • Explain the importance of goal setting, how to prioritize those goals, and the need for both short- and long-term goals.
  • Create a timely, attainable goal.

Understanding needs vs. wants.

  • Explain difference between wants and needs.
  • Explain prioritization factors to consider when determining expense-related decisions.

Recognize how one's personal career choice and attitude can impact financial planning decisions

Develop a realistic spending plan for financial independence.

  • Illustrate that career choice, education and skills, and economic conditions affect income.
  • Determine own attitudes and behaviors toward spending, saving, and investing.
  • Recognize sources of money (earned or gifted).

Understand various sources of compensation.

  • Recognize multiple sources of income as well as alternative sources (family members, neighbors, friends for jobs or gifts).
  • Recognize other types of compensation (bartering, trading).

Understand the distribution of resources.

  • Explain the benefits of savings versus spending.
  • Describe the impact of spending on savings.

Understand financial instruments.

  • Identify the different ways to pay for items (cash, check, credit, and debit).
  • Explain how non-cash methods of payment still require adequate funds.

Identify the concept of debt and an individual's responsibility for that debt

Identify responsible credit management.

  • Recognize the uses of credit.
  • Identify appropriate times to use credit.

Understand different types of debt.

  • Recognize that borrowing is a debt to be repaid.
  • Explain the role of interest regarding debt.

Understand rights and responsibilities as borrowers.

  • Recognize the importance of repaying a debt.
  • Explain potential consequences for not returning a borrowed item.
  • Explain the positive consequences of repaying debt on time.

Recognize common risks to one's identity and demonstrate the ability to protect that identity

Establish strategies for protection of identity.

  • Explain what it means to have a personal financial identity stolen.
  • Identify ways of protecting their identity.

Recognize different types of insurance.

  • Describe what insurance is and why it is important.
  • Describe the impact of losses, financial and non-financial.

Recognize different types of non-insurance protection.

  • Recognize the importance of written documentation and other types of protection available for students.
  • Explain the various people who provide protection and the roles they play.

Determine the importance of saving/investing in relation to future needs

Recognize investment options.

  • Identify various ways to save.
  • Explain the importance of saving in relation to future needs.

Distinguish investment options

  • Identify various options for saving/investing.

Understand the relationship between investment risk and return.

  • Explain how an investment can grow in value.
  • Explain how an investment might decrease in value.

Recognize that spending choices differ between groups of people and settings

Recognize the local, state, national, and international impact of personal financial habits and actions.

  • Recognize that different people have different needs, wants, and financial priorities
  • Explain how one’s actions impact others.

Demonstrate responsible financial behaviors, at the personal, local, state, national, and international levels.

  • Recognize consequences for both good and bad decisions.
  • Recognize that an individual’s behavior impacts the decisions and consequences of the broader community.

 

Grades 6-8

Essential Concepts and/or Skills

Model the process of financial planning based on personal prioritization of wants and needs

Develop short-term and long-term financial goals.

  • Define the steps in the goal-setting process.
  • Explain the relationship between goal setting and achievement.
  • Create goals according to a prioritization of wants and needs that are specific, realistic, and measurable.

Understanding needs vs. wants.

  • Identify expenditures as needs or wants.
  • Describe persuasive strategies used by peers, media, and businesses to influence society (in decision making).

Create an effective spending plan using informed decision-making skills

Develop a realistic spending plan for financial independence.

  • Describe the concept of a spending plan.
  • Explain the advantage of spending less than you have.
  • Explain the short- and long-term consequences of over spending.
  • Recognize the impact of global issues on financial planning.

Understand various sources of compensation.

  • Describe potential sources of income for middle school students.
  • Identify factors to consider when analyzing different methods of compensation.
  • Explain how income can affect goals.

Understand the distribution of resources.

  • Explain factors that impact savings and spending plans.
  • Describe expenses that employees might have.

Understand financial instruments.

  • Identify possible financial accounts.
  • Recognize that fees or charges may be attached to accounts.
  • Recognize the importance of keeping accurate records.

Recognize appropriate uses of credit and its impact on an individual's financial security

Identify responsible credit management.

  • Identify the various types of credit card companies available and the features of each (interest rates, annual fees, limits, reward system).
  • Explain appropriate and inappropriate use of credit cards.
  • Explain how use of credit cards can help or hurt a budget.

Understand different types of debt.

  • Identify the types of purchases that generally require a loan.
  • Demonstrate the ability to calculate the cost of borrowing money.

Understand rights and responsibilities as borrowers.

  • Explain that a borrower needs to have assets to use as security for a loan.
  • Explain an individual’s rights and responsibilities as a consumer.
  • Explain the concept of a credit rating.

Evaluate various risks to personal identity and create a plan for ongoing protection.

Establish strategies for protection of identity.

  • Recognize that a personal identity needs to be protected.
  • Recognize the impact of technology on personal security.

Recognize different types of insurance.

  • Explain why an individual needs various types insurance.
  • Identify factors to consider when deciding the type of and amount of insurance.

Recognize different types of non-insurance protection.

  • Identify types of documents that can serve as legal protection.
  • Explain the potential hazards of inappropriate or missing documentation.

Evaluate possible options for investing as a means to attain one's goals

Recognize investment options.

  • Explain how saving is needed for investing.
  • Explain the relationship between investing and potential entrepreneurship goals.
  • Explain the difference between saving and investing.

Distinguish investment options.

  • Explain various options for investing money.
  • Understand the effect of interest and percentage rates on investments.

Understand the relationship between investment risk and return.

  • Explain how an investment differs from a savings account in potential risks and return.
  • Explain the importance of a personal budget and goals in the investing process.

Demonstrate ethical financial decision making skills and assess how these decisions might impact the broader community

Recognize the local, state, national, and international impact of personal financial habits and actions.

  • Realize that financial habits and actions have broad impact beyond the local community.
  • Identify the factors that impact the production of goods and services beyond the local area.

Demonstrate responsible financial behaviors, at the personal, local, state, national, and international levels.

  • Identify the importance of legal and ethical actions in financial behaviors.
  • Explain how unethical behavior negatively impacts the broader community.
  • Explain the importance of ethical behavior in building trust.

 

Grades 9-12

Essential Concepts and/or Skills

Demonstrate financial responsibility and planning skills to achieve financial goals for a lifetime of financial health

Develop short- and long-term financial goals. 

  • Understand the concept of setting short-term (next six months) and long-term (beyond six months) goals.
  • Evaluate the role short- and long-term goals play in financial success. Assess the impact of goal setting on personal budgets
  • Describe the impact of goal setting on personal financial success.

Understand needs versus wants.

  • Explain the difference between needs and wants. Analyze their own needs and wants to determine importance (prioritize).
  • Develop plans to achieve their most important needs and wants.
  • Explore individual decisions made as a consumer and distinguish between fact and opinion in advertising.

Manage money effectively by developing spending plans and selecting appropriate financial instruments to maintain positive cash flow

Develop a realistic spending plan for financial independence

  • Understand the concept of developing a spending plan that promotes living within one's means.
  • Evaluate spending plans that promote maintaining a larger income than expenditures.
  • Develop and assess impact of different spending plans to make informed choices.
  • Describe the impact of global issues on financial planning.

Understand various sources of compensation.

  • Identify various types of income (e.g., allowances, salary, hourly wage, commission, benefits, gross and net income).
  • Compare various compensation options to determine which best fits individual needs.
  • Explain how income affects lifestyle and spending choices.

Understand financial instruments.

  • Students understand the responsibility f maintaining accounts using financial instruments such as checking accounts, debit cards, and ATM cards.
  • Demonstrate the ability to reconcile personal records with financial institution's records.
  • Differentiate between interest-bearing and noninterest-bearing accounts.

Recognize the impact of fees and charges.

  • Identify options for online financial transactions (buying, making payments, transfers, etc.).
  • Understand the distribution of resources.
  • Identify options for distributing resources.
  • Analyze short- and long-term benefits of different resource allocation opportunities.
  • Create a personal spending plan to include savings, spending, giving, and/or investing consistent with their financial goals.

Make informed and responsible decisions about incurring and repaying debt to remain both creditworthy and financially secure

Identify responsible credit card management.

  • Compare and contrast offers of credit card,instant loan, and introductory offers (low rate introductory, startup fees, fixed rate).
  • Explain credit card features, including annual fees, interest rates, and incentives.
  • Understand implications of making minimum payments, late payments, and late fees.

Understand different types of debt.

  • Understand the types of debt consumers encounter.
  • Compare loan terms and rates to determine best choice.
  • Identify the impact of loans on a personal financial plan, such as auto, student, credit card, major purchase.
  • Identify asset-producing debt versus living expense debt

Understand rights and responsibilities of borrowers.

  • Identify factors considered for qualifying for and securing a loan (i.e., what makes a person a good or bad credit risk).
  • Understand the meaning of a credit score and how it is used to negotiate better loan options. Identify the steps in checking their own credit score and making corrections if needed.
  • Explain the potential consequences for not meeting the requirements of the agreement (i.e., payment amount, due dates, insurance, taxes, etc.).
  • Explain an individual's rights and responsibilities under consumer protection laws.

Evaluate and identify appropriate risk management options, including types of insurance, non-insurance, and identity protection

Establish strategies for protection of identify.

  • Describe the importance of protecting their identity.
  • Distinguish legitimate from fraudulent solicitations.
  • Understand the impact of technology on personal security.
  • Identify important identification numbers and explain when they should or should not be shared.
  • Explain ways to protect their identity.

Recognize different types of insurance.

  • Explain different types of insurance and identify the appropriate need for each.
  • Determine appropriate options available to reduce the cost of premiums.

Recognize different types of noninsurance protection.

  • Explain the importance of legal and written documentation to protect individuals.
  • Identify types of documentation used by individuals to prevent personal and financial loss. Analyze the types of protection available and their appropriate use.

Assess the value, features, and planning processes associated with savings, investing, and asset building, and apply this knowledge to achieve long-term financial security with personal and entrepreneurial goals in a global market

Recognize investment options.

  • Assess the many factors that influence financial planning. Explain the importance of savings.
  • Explain the impact of short- and long-term financial goals for asset building.
  • Outline the process of adjusting the financial plan to accommodate changes in funds.
  • Describe the importance of adjusting goals over a lifetime as well as preparing for retirement and estate planning

Distinguish investment options.

  • Distinguish between the various types of investment options.
  • Understand the power of compounding interest.

Understand the relationship between investment risk and return.

  • Identify the level of risk involved with investment options.
  • Explore the potential returns related to investment options.
  • Explain the concept of wealth building.

Understand human, cultural, and societal issues related to financial literacy, and practice legal and ethical behavior

Recognize the local, state, national, and international impact of personal financial habits and actions.

  • Analyze he complexity of financial transactions as a member of the international community.
  • Evaluate the interconnectedness of the production of goods and services at the local to international levels.

Demonstrate responsible financial behaviors, at the personal, local, state, national, and international levels.

  • Manage personal and professional financial interactions following legal and ethical guidelines.
  • Respect the rights and responsibilities of others in financial interactions.
  • Practice responsible financial behaviors within an international financial environment.

Printed from the Iowa Department of Education website on April 21, 2014 at 12:05pm.