Essential Personal Finance Concepts That Can Be Integrated Into Teaching of the Common Core
Personal Finance Big Ideas are critical aspects of personal finance that can be appropriately integrated into teaching the Common Core State Standards and can lead to increases in young people’s financial capability.
Personal Finance Big Ideas:
- Generate action or fuller understanding. For example, an understanding of compound interest can lead to the actions of savings and reducing debt.
- Focus on important personal finance knowledge and skills our students must acquire to be financially capable young adults
- Draw from the best existing guidance to the field. Sources include the Council for Economic Education’s recently released National Standards for Personal Finance, the National Standards in K-12 Personal Finance Education Standards housed at Jump$tart, the Pisa Financial Literacy Assessment Framework, Money as You Grow and other resources.
Understanding these
Concepts |
Leads to these
Actions |
Grade Band Coverage
K-23-56-89-12 |
---|---|---|
Last Updated: 03/20/2013 | ||
Compound Interest |
Saving and understanding the importance of starting early Debt management |
|
Opportunity Cost |
Effective decision-making Recognition of options foregone |
|
Value of Education |
Investment in variety of human capital |
|
Risk |
Diversification of portfolio Understanding appropriate levels of protection Purchase of insurance products |
|
What Is Money |
Ability to use money Understanding value of money |
|
Time Value of Money |
More informed purchasing More appropriate investing Ability to use time horizon to plan |
|
Cost/Benefit Analysis |
Better decision-making |
|
Debt |
Its appropriate use in investment in education, housing, and purchasing |
|
Setting Goals |
Purposeful, more achievable outcomes |
|
Delayed Gratification |
Ability to consume things in the future that are unattainable in the present |
|
Scarcity |
Acknowledging limitations and making choices |
|
Inflation |
Ability to mitigate its effects with respect to investments, assumption of debt, and purchasing decisions |