An Evaluation of Financial Literacy in Elementary Schools towards Financial Education Enhancement: A Case Study of Baltimore Public Schools

Abstract

Financial literacy education has traditionally never been a major subject area in most public schools in Maryland. With the unanticipated struggling of the United States of America (USA) Economy, Maryland (one of the richest states in the USA and its residents, especially of its major urban city, Baltimore, is facing severe family and personal financial crisis. This unanticipated financial crisis characterized by declining family and personal savings, mortgage defaults and foreclosures, and tenant evictions due to rent defaults is motivating educators, business entities, and politicians to develop education strategies to educate children from future financial crisis. Although there is an overwhelming consensus for providing financial education as a major curriculum to our schoolchildren, the practicability of most curriculums is obscure. To develop a practical approach to teaching financial literacy in elementary schools, an assessment using a Grid Familiarity Rating Chart (Very Familiar – Not Familiar) of basic financial and economics concepts was assigned to 210 students (4th – 5th graders) in four inner city schools. Students received information to place a check mark by each concept if they are very familiar or familiar with the concept. Results revealed that 97% of the students were very familiar or familiar with the basic financial concepts as compared to 49% of the students who were very familiar or familiar with basic economic concepts. Even when students were encouraged to explain their very familiar or familiar concepts, 80% provided explanations that were accurate or almost accurate for basic financial concepts as compared to 20% accuracy for explanations with basic economic concepts. Conclusively, the most basic economic concepts (scarcity, choice, and opportunity cost), which are essential decision making tools for most financial decisions should be simplified and included in financial education lesson plans.