Financial Education for Kids

Financial Education Core Messages: What DepEd Wants to Teach Our Kids About Money

Core messages from the Department of Education's Financial Education Policy on earning, saving, spending, borrowing, budgeting, donating, investing, and protecting money.

The news that the Department of Education will be implementing a Financial Education program for all learners from K to 12 was welcomed with delight and hope by many of my friends — not just those of us who are parents and educators but also the entrepreneurs and finance professionals and advocates. It’s never too early for our kids to learn how to handle money and it can only be a good thing for our country if all our citizens learned the value of saving and distinguishing between needs and wants.

Only 8% of adult Filipinos could answer three financial literacy questions correctly

One of the main drivers for this push towards financial literacy was the sobering result of a survey undertaken by the Bangko Sentral ng Pilipinas. In the survey, they asked three questions — see if you can answer them correctly yourself!

Question 1: Suppose you have P1000. Assuming that the rate of increase in prices is 10% this year and there is no change in your income, which of the following statements is true about the things you can buy with P1000?

a. I can buy more goods today than last year.
b. I can buy the same amount of goods as last year.
c. I can buy less goods today than last year.
d. It depends on the types of things that I want to buy.
e. I do not know.

Question 2: You put P100 in a savings account with guaranteed annual interest rate of 2%. How much would be in your account at the end of one year?

a. P102
b. P110
c. P120
d. I do not know.

Question 3: After 5 years, your account will have…

a. More than P110
b. Exactly P110
c. Less than P110
d. Impossible to tell from the information given
e. I do not know.

The correct answers are c, a, and a, respectively. Did you get it all right?

The Bangko Sentral found that the biggest group of adults (41%) could only answer one question correctly. Only 8% were able to answer all three questions correctly and an eye-popping 24% — nearly one-fourth! — got everything wrong.

Financial education for kids

It’s safe to assume that the adults included in the BSP survey either were not taught the basics of finance when they were younger, or it came up but they didn’t feel it was important or relevant enough to really take to heart and burn into their memories.

That’s why it’s good news that financial education is going to be integrated into the K-12 curriculum, so that it’s something that even young kids are going to be aware of.

Including it in the curriculum isn’t going to be enough, of course. I’m pretty sure most of us, even those who went to government-run schools, were taught about interest when we were in elementary, or high school at the very latest. But apparently, it wasn’t taught in such a way that the learners grasped that this was REALITY — something of practical importance that could either help them achieve financial stability, slowly but surely, or land them in mountains upon mountains of debt — and therefore something that they ought to have remembered decades later as adults.

Speaking of debt, I’m glad that the core messages in the Financial Education program are grounded in reality and not out of touch of most Filipinos’ situations right now. If you were to ask me about debt, for example, I would say NEVER! As much as possible, never put yourself in a situation where you owe someone something! But then that’s something I can say from a position of relative privilege, a position I owe in part to the hard work and wise decisions of my parents and their parents before them. If I had to start from zero — if I had to start from less than zero! — I would not be as allergic to debt. I would not be so lucky.

So as much as I hate to agree with, for example, the core message “Debt is sometimes unavoidable,” I have to say it’s a message that thoughtfully meets many learners where they are.

Core messages in DepEd's Financial Education Policy

The core messages below, which I copied from DepEd’s Financial Education Policy, are divided into eight categories: general, earn, save, spend, budget, donate, invest, protect. They’re not, like, a model of copywriting — with some inconsistent structure, some outright typos, and word choice that’s just kind of off sometimes — but I’ve tried to stay faithful to their original form. Hopefully, this list can serve as a springboard for more polished educational materials in the future.

Word choice quibbles aside, I love most of the messages here and I hope that they will really get ingrained into the minds and lives of our learners.

All right, let’s get to it!

General

Each person has different needs and must make good decisions on how to earn, save, borrow, spend, and donate money.
Know the difference between “needs,” “wants,” and “demands.”
Understand how to make choices with saving and spending money.
Understand the concepts of earn, save, spend, and donate.
Master the steps of the money cycle: earn, save, spend, borrow, and donate.
Understand the need for money and resources for you and your community.
It is important to earn income from different sources to pay for their needs, wants, and demands in living expenses and cope with emergencies.
Be mindful of money borrowed in terms of principal value and interest.
Able to connect financial plans to other external financial factors institutions such as commercial and thrift banks, credit unions, insurance companies, brokerage, and investment companies.
Financial literacy is associated with the development of family and the country.
Understand financial management (self and others) and risks (back up plans and disasters).
Understand the value of their possessions-resources and using these responsibly.
Financial planning and management will help us become money-smart persons.
Financial planning and management is an ongoing process to help you make sensible decisions about money to help you achieve your life goals.
Failing to plan is planning to fail.
Can define financial goals and priorities and ways of choosing between them.
Identify the relationship between plans and manage financial consequences.

Earn

Identify ways of earning money (good and bad).
Know how to spend money wisely.
Adhere the importance of valuing earned money.
Money is hard-earned and easy to spend.

Save

Save for the future.
Having a goal motivates a person to save money.
Learn to save up early so that resources may be available in the future.
Internalize the concept of saving is in the mind and heart of the youth, success is guaranteed in the future. [sic]
Children use savings as a tool to improve ones’s and others’ life.
Understand the concept of saving and using the different resources.
There are many ways to save money.
Each member of the family has different means of saving.
People who regularly save money achieve their dreams and goals faster.
Saving is important in making investments.
Saving money in the bank is a good habit that will help you, your family, and your country.
It is important to follow a consistent habit of saving money to achieve goals and cope with emergencies.
Learn that if you want something, you have to save for it.
Understand that putting money in the bank / money box / piggy bank helps us save.
Realize that the less you spend, the more you save.
Learn about strategies for saving money.
Coins are valuable especially when saved up.
Make value the of “save for the rainy days.” [sic] [not sure what they were trying to say here]

Spend

Plan your spending by buying less of your wants and demands.
Planning and saving helps us cope with unexpected emergencies.
Understand the difference between needs vs. wants vs. demands.
Know the importance of self-control before spending money.
Understand the relationship between moral values and money.
Understand that spending is not your only option: but you also have to understand other concepts like earning, saving, borrowing and donating.
Learn about consumption habits of oneself and family’s and its impact in society. [sic]
Think carefully before you spend.
Value money earned.
Money is a limited resource that must be spent wisely.
Learn that sometimes you have to wait to get what you want.
Credit is a sum of money that a person or a bank lends to you. Normally you are required to pay an additional amount called interest when you return or pay the loan back. The borrowed sum plus interest must be paid on time and, if possible, in full, to avoid additional interest charges and penalties.
Debt should be used for beneficial goals and investments.
Debt is sometimes unavoidable.
Debts MUST be paid so borrow only what you can afford to pay.
Have a clear plan on how to pay a debt.

Budget

Each member of the family plays a big role in preparing and following budget.
Proper budgeting of resources is the key to a blissful family.
Understand how financial choices around budgeting can affect their lives.
Identify relationship between plans and financial consequences.
Budgeting is an important skill to learn to succeed in life.
Understand the value of their possessions-resources, and using these responsibly.
Discipline is important in following one’s prepared budget.
Proper budgeting aids in the management of resources.
Children are able to carefully plan, budget, and manage resources.

Donate

Sharing our time and other resources with those in need creates a happy community.
Sharing doesn’t just let you help others. It also increases your worth as a person. [edited]
Understand the joy when we give without wanting something in return.
Realize that there are many ways for us to donate: money, time, and items.
Know that other than ourselves, we can also get other people to help as well.
Learn that helping people in need will make this world a better place.

Invest

Make a simple investment.
Learn how your investment will become profitable.
Learn how to build your wealth.
Differentiate between savings and investments.

Protect

Investing your money is a good way to build your savings faster but you need to clearly understand its risks and rewards.
Insurance is an important part of financial planning. It can be the safety net that protects your family, your way of life, and your future.