Financial knowledge and decision-making skills

People can make better financial decisions by using problem-solving skills, critical thinking, and a thorough understanding of financial concepts and facts.

Financial knowledge and decision-making skills are essential.

Financial knowledge and decision-making skills are essential for people to make the right choices in their financial lives. This includes deciding when and how to save, comparing prices before purchasing a large item, or planning for retirement.

This building block is being developed.

It is not until young adulthood and adolescence that financial knowledge and decision-making skills are developed. These skills become increasingly important, particularly for young people who begin to earn money, purchase things on their behalf, manage a banking account, or borrow money for education.

The following tables show how this building block develops at three stages and how skills and abilities are related to adult behaviors associated with financial well-being.

This building block is a great way to teach children.

Schools can offer opportunities for students to learn about financial behavior, make decisions and then reflect on their outcomes and consequences. Teachers can offer opportunities to students across the curriculum to help them learn to recognize and compare reliable financial information. They can also provide an opportunity to do financial research to evaluate options and make informed decisions.

Instructional Strategies

According to research, the strategies below can help develop financial literacy and decision-making abilities.

  • Competency-based Learning: A student-centered approach that encourages learners to work towards well-defined benchmarks, giving them a feeling of mastery over the skills and information they are learning.
  • Direct instruction is a structured, direct, teacher-directed method focusing on a specific skill. It typically involves delivering a lecture, demonstrating the skill, or having frank discussions.
  • Teacher tailors instruction for each student based on their needs. This includes focusing, differentiating, supporting resources, strategies, and pace.
  • Project-based Learning: A hands-on approach in which students are actively involved in real-world challenges and questions. They also complete relevant tasks, make decisions and overcome obstacles.
  • Simulation: Learning activities that simulate real-world situations to encourage critical thinking and application.

Learn more about our Learning Activities.

Activities that foster financial knowledge and decision-making should help young people acquire factual knowledge, analytical and research skills, and deliberate financial decision-making. A variety of activities can support these skills.

  • Financial coaching and mentoring are when adults engage students and encourage them to work toward financial goals.
  • Financial simulations are educational tools or activities which simulate real financial management situations. They allow students to learn skills like budgeting, comparison-shopping, and investing through making mock decisions with realistic outcomes.
  • Real-world Case Studies: These stories depict realistic situations in which a conflict or dilemma must be resolved or negotiated by analyzing various information, evaluating it, and weighing its consequences.

Teaching financial literacy and decision-making skills with resources

  • Find classroom activities to help you develop financial literacy and decision-making abilities.
  • Explore all learning strategies and activities to nurture the building blocks.


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