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A vital education

Teach children economics early by Robert Hopkins Special to the Democrat-Gazette | April 14, 2016 at 2:51 a.m.

April is Financial Literacy Month, so it's a good time to discuss why it is important to teach children about economics and personal finance.

Arkansas scored high in a 2015 study by the Center for Financial Literacy. The Natural State earned a B for its requirement that high school students complete a half-year course in economics for graduation.

But research shows that high school may be too late to teach important economic concepts. Most children form financial habits by age 7, according to research by David Whitebread and Sue Bingham of the University of Cambridge in England.

Children learn what they know about the economy and personal finance by observing the world around them and watching how adults behave in that world. In this high-tech age, children often see their parents and other adults making purchases online or in stores with credit cards or smartphones. Cash and checks are used less frequently, which can lead young children to draw incorrect conclusions about money and income.

One way to help head off these misperceptions is for families to embrace financial literacy for their children at a young age.

That's why the economic education department of the Federal Reserve Bank of St. Louis recently created Q&As for parents to use when reading popular books with children from age 3 through middle school. These resources are free at So far, Q&As have been created for 20 books, and more will be added soon.

With younger children, parents can read books such as Little Critter: Just Saving My Money and Alexander, Who Used to Be Rich Last Sunday and then use the Q&As to discuss financial and economic topics.

For older children, books such as One Hen: How One Small Loan Made a Big Difference and The Case of the Shrunken Allowance are helpful in discussing employment and income, and in talking further about interest, saving and spending.

For a deeper dive into financial education, our online Econ Lowdown program offers free lessons about economics, personal finance, and money and banking, as well as about the Federal Reserve itself. There are videos, online courses and lessons for classrooms from pre-K through college.

These resources reach more than 500,000 students across the country each year. Similar free resources are available to the general public. They're all at

In addition, on your next trip to St. Louis, make sure your itinerary includes a visit to our free Inside the Economy® Museum at the St. Louis Fed headquarters in downtown St. Louis. The award-winning museum, which is located just a few blocks from the Gateway Arch, provides a fun and interactive way to explore the economy. Find more information at

Citizens of all ages should care about financial and economic education because it provides life skills that benefit not only individuals, but society as a whole. Consumers who make informed financial decisions promote broader economic stability.

If we teach children to understand how the economy works and how to make informed decisions, they'll likely grow up to make better financial choices.

We all will benefit.


Robert Hopkins is a vice president and the regional executive of the Little Rock branch of the Federal Reserve Bank of St. Louis.

Editorial on 04/14/2016

Print Headline: A vital education


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