April was designated Financial Literacy Month to promote good financial habits and to help our citizens better prepare for their financial lives. This April, of course, feels different for most of us: Our lives were turned upside down in what felt like a matter of hours.
Financial literacy, also referred to as financial capability, means having the knowledge and skills to manage your finances and the opportunity to apply that knowledge and those skills. One key component of financial literacy is decision-making, which is critical in times like these.
We make decisions all the time about our finances, including about spending and saving, investing and insuring and protecting ourselves. Learning to make careful, well-thought-out decisions is really valuable as we try to develop good financial habits for both ordinary and extraordinary times.
Parents and caregivers have opportunities to teach about financial literacy every day and to help set children up for good decision-making when they need to make crucial choices later. Explain to your children how you work to earn an income, how circumstances might change the amount you earn, and how you have to make important choices about how to spend that limited income; i.e., decisions have consequences.
Tell your children about some of your savings goals, like planning for their education. Talk to them about some of your expenses, like mortgage or rent, groceries and other bills. It's not necessary to tell kids how much you make, but you should explain these concepts to them.
At the Federal Reserve Bank of St. Louis, we have a team of educators, researchers and specialists who promote financial literacy year-round through economic education outreach. That team has created hundreds of online resources for educators at every level from pre-K to college to teach about personal finance and economics.
We hope these videos, online modules and topical articles have been an asset for many teachers and professors who are in uncharted territories, teaching their students virtually. My wife, a high school personal finance teacher, has successfully taught using a number of these resources. The St. Louis Fed Economic Education team has been creating these resources for years, and they're available to any teacher in the United States or around the world, free of charge, at stlouisfed.org/education.
But we know that teachers and professors are not the only ones regrouping at this time. Some parents became homeschooling instructors overnight, during the same time frame that many professionals are also attempting to work full time remotely.
It's a challenging time. And, for many, it's an uncertain time.
In addition to teacher resources from the St. Louis Fed, we also have resources for parents and caregivers that could be particularly helpful as they navigate homeschooling roles. For example, our Parent Q&As are sets of questions to accompany popular children's books that may already be on your bookshelves, like A Chair for My Mother, Betty Bunny Wants Everything, Little Critter Saves His Money, and more. Anyone who visits our website can pull up these questions on their phone (stlouisfed.org/education/parent-resources). As you're reading, you can ask your kids some questions related to personal finance.
Some of these topics may seem obvious to you, but they may not be obvious to your kids. Anything we can do to help start these conversations with parents and their children, or teachers and their students, is an opportunity to teach about personal finance.
To teachers, to parents, and to parents who are in the new situation of being teachers to their children, we at the St. Louis Fed are thinking about you. We hope our online resources may be able to help make a challenging time feel a little easier.
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Robert Hopkins is senior vice president and regional executive of the Little Rock Branch of the Federal Reserve Bank of St. Louis.
Editorial on 04/16/2020