Financial literacy in English lessons

We quite often teach other subjects apart from English during our lessons. A bit of Math, some Geography, a little History or Science – all of these contribute to our students’ general knowledge and facilitate their learning process at school. Certain things, though, can go way beyond the classroom and bring lots of benefits to students’ life and career. What are they? For instance, financial literacy.

A unit on money is included in almost every course book series. Younger kids get to know about different currencies and learn to ask about prices. Teenagers compare budgeting apps and read about the ways to earn money. Books for adult learners will provide you with a topic of banking with all those ‘mortgage’, ‘loan’ and ‘run a business’ kind of vocabulary.

Developing financial literacy in English lessons can be a great way of encouraging young people to save money and track their spendings. Financial literacy provides life skills for young people to use as adults. After all, understanding your finances seeps into every area of your life, whether you realize it or not. Below you will find a number of activities which can help you incorporate this skill into your lessons.

Budgeting

Understanding your budget can be a key to managing finances efficiently. Not many teenagers realize the importance of tracking their expenses or planning purchases. Why don’t you try to teach them?

Make your own budget

This ‘making your budget’ activity will take up to a month to run. After discussing the importance of controlling your money, ask teens to create their own budget in a few simple steps:

1. Calculate your monthly income. Add up how much money you get from your parents, earn or receive at college or university. Include all regular sources of income. If these amounts vary from month to month, add up your income from the last six months, and then divide by six to get an average.
2. List all regular spendings. Do you pay for the Internet each month? Are you responsible for paying for your phone plan? Do you get a cup of coffee each Friday before your Physics class? Calculate.
3. Start tracking random spendings. After a month you’ll probably get an idea where your money has been going. 
4. Subtract what you spend from what you earn. If you earn more than spend, what do you do with the rest? If you spend more, what can you cut down on?

As a part of this project, you could also ask students to do a research and find out about some popular budgeting apps. Invite them to install one, use it for a week or so – it might be Coin Keeper, Monefy, Money Manager or something like that – and explore its functions. After that let students present their app and share its benefits and drawbacks. 

Walk in someone’s shoes

How to practise budgeting if the amount of pocket money is small and there are no earnings yet? Make it up! When the students get a rough idea of budgeting, ask students to estimate how much an average person spends a month. Then – off to research! Divide learners into groups and provide them with a role card. A role card may include a job and a number of other conditions: age, marital status, loans and mortgages, etc.

After the cards have been distributed, ask students to search the net for average prices, bank interests or other relevant information and plan a monthly budget for this particular person. You can provide them with a worksheet like this one or just ask to stick to the format they find convenient. This activity can be run within one lesson and activates speaking skills and strategies. What’s more, it teaches empathy and financial smarts!

Do a reality check

Even if your students don’t have a budget of their own yet, it might be useful to plan for the future. Talk about their expectations. Ask them to think what they see their life like in 10-15 years. Where are they going to live and work? Which car would they prefer? What eating habits are they likely to have? After some thinking time and note-taking, discuss their ideas and then ask to do a quick questionnaire. It can be easily done online which makes it just perfect for the current lockdown situation. After ticking the answers, the site will ask them to plan on their possible spendings:

You will probably have to pre-teach some vocabulary like ‘emergency fund’ and mention that, as the website is an American one, it operates dollars and will deal with some local concepts like federal American taxes. A nice chance to practise currency rates and find out more about other cultures, isn’t it? At the end, the students will get some recommendations about possible jobs, the cost of their working hour and the sort of education they would need for that.

Investing and saving

As well as tracking expenses and planning budget, it’s a nice idea to teach your students some saving and investing basics. Ideally, they will have an understanding of how to grow money and have a little stable income. 

Take a quiz

A brief quiz never hurt anyone. Especially if it is aimed at testing students’ knowledge of financial terms, common banking procedures and financial system basics. 

1.Placing money into a savings account can increase my money.
a. True
b. False

2.The longer my money is in a savings account, the more money it will earn.
a. True
b. False

3. What is interest?
   a. True
   b. False
   c. Both.

4. Savings accounts in different banks pay different amounts of interest.
   a. True
   b. False

5. If you put $200 in a savings account that pays 5.5% interest each year, how much interest would you earn in five years?
   a. $120
   b. $55
   c. $11

6. Stocks (or shares) are papers that everyone can buy. If we own stocks, we’re part owners, or shareholders, of a company. When a company gets profit, it can pay dividends to people who own their shares.
   a. True
   b. False

7. Stock prices go up and down every day, so they’re more risky than savings accounts.
   a. True
   b. False

8. Owning shares or stocks:
   a. can increase the value of my money
   b. can decrease the value of my money
   c. can provide income from dividends
   d. all of the above 

9.The best way to grow my money is to:
a. make a variety of investments: savings account, shares and other financial tools
b. keep my money at home
c. loan it to a friend
d. play lottery

(Keys: 1a, 2a, 3c, 4a, 5b, 6a, 7a, 8d, 9a)

Set SMART goals

Setting financial goals is another important skill in our life. Setting goals can help us make dreams come true – from buying that brand-new smartphone to owning a car. According to the SMART goal-setting, any goal should be Specific, Measurable, Attainable, Relevant (Realistic), and Time-based (or Timely). Applying the SMART strategy is supposed to help you become more successful in reaching your goals.

1. First, present the SMART approach to your students – you might want to use this video

or just briefly tell them about it in your own words.

2. Give a sample of a goal written in a SMART way. For example, if they want to get a new laptop which costs $700, the goal-setting can look like this:

S: ‘I will save $800 for a full payment by the end of the year’. 

M: ‘To do so, I need to save $100 a month, which is 7600 rubles. My birthday is in June, so I will probably get some extra money and recalculate my savings after that’.

A: ‘It can be possible if I cut down on take-away coffee, spend less on clothes and find a part-time job’.

R: “I need a new laptop as it will serve me next year when I’m going to start University. I need this particular model because it is powerful enough to let me work with all special software I will need’.

T: ‘I will buy the laptop at the end of December. It is a good time because there might be end-of-year sales or special discounts’. 

3. Invite students to use this approach for setting their own financial goal for something they’d like to purchase but can’t afford yet. It can be both a long-term one or a short-term one. 

4. You can opt for a whole-class discussion and feedback at the end, or ask students to talk about their goals in pairs and check if the goal setting is really SMART.

Play stock ownership

If the words like ‘stocks’, ‘shares’ and ‘dividends’ aren’t just a mere sound for you, you can try out the following activity to encourage your students to find out more about the subject. Ideally, they should be adult enough to like the idea and to have some background knowledge. 

1. Remind the students that buying a share of stock is another way to increase their money’s value. When they buy a share of stock, they own part of that company and are likely to get the part of the company’s profit as dividends. Another way their money increases (or decreases) in value is when the price of a share of the stock goes up or down respectively.
2. Ask students to think about some brands they often use. It can be a clothes company (Levis), a fast-food restaurant (Mcdonalds, for sure), a soft drink, a gadget, an airline company or even a bank. When the list is ready, provide the learners with the websites to look for the prices, for example, this one. 
3. Divide them into pairs or groups and give each group a virtual $1000 account. The sum and currency is up to you, of course. Ask each team to choose the stocks according to their preferences and money. 
4. Keep the lists. Monitor the prices regularly, say, once a week. At the end of the month compare the team account balances.

This activity can show learners the volatility of prices and the risky side of such kind of investments. It can also teach them about the variety of financial instruments.

All in all, financial literacy is clearly a valuable life skill. Having it means that one can understand basic financial concepts and are able to manage their personal finances, earn and spend wisely. Let’s add a bit of that into the next ‘Money’ unit or extend some reading about a famous brand or a world-known company, shall we?