Fifth grade is a crucial year for financial education. For many of these students, elementary school is coming to a close, and this is the last year before they head off to the big, scary world of middle school. The economic toolkit they need is essential to build on their knowledge and learn financial literacy thoroughly. As a teacher or homeschooler, you want to know what topics you should cover with your 5th-grade students. Fortunately, this guide will let you know what to focus on, what types of activities work with kids of this age, and specific lesson plans to get your kids on the path to financial success. The Federal Bank of Kansas City lays out the general concepts that 5th-graders should learn, which we will look at closely below.
National Standards for Personal Finance Education
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Kids can be taught about budgets as soon as they understand the concept of money, but students of this age can dive into more detailed plans. Teachers can show how to complete basic arithmetic using addition and subtraction, to calculate how much someone could bring in per month with a salary, their expenses, and how much to spend on wants and needs. Hammering the idea home that you should not spend more than you make is a lifelong skill to have, and kids are never too young to learn to stay within their budgets.
There are many activities to reinforce these lessons on budgets. Teachers can have students:
- Create a detailed budget plan using a weekly allowance, whether they receive it or not. For example, learners can work with a set weekly amount, calculating how much they would get in a month. They can list the categories they would spend on or save money, and learn how much various items cost along the way.
- As a bonus, kids can present their budgets to their parents or guardians and try to persuade them to give them an allowance (or increase it), showing that they can be responsible money managers.
5th Grade Lesson Plan #1
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5th-graders should learn about credit – its advantages and drawbacks, power, and risk. While they are years away from using credit on their own, they can build a solid foundation of knowledge to use credit responsibly in the future. You can give them a clear working definition of credit, explaining that it involves a promise of payment later for a product or service now. You can discuss the idea of credit cards, car loans, and mortgages at a level they will understand.
Some ways to teach kids about credit include:
- Give students worksheets that show how credit works. They can “borrow” a specific amount of money for an item they want to buy and calculate how much they need to pay each month to pay it off in a designated amount of time.
- Touch on the idea of interest rates, showing students the problems that can arise from not understanding the danger of abusing credit. They should see there are ways to use it wisely – or not.
Educators can also teach about debit alongside credit. Debits are money owed directly on an account, not borrowed. There are pros to using debit, such as not going into debt, and cons, like impulse buying with a swipe of your card. You can highlight the differences between the two approaches, describing how debits are paid immediately and you owe that amount as soon as the transaction occurs.
You can use debit to show immediate changes in balances. Students can:
- Develop charts, graphs, and tables that show the impact of debits on their budgets. You can show the many items that may be debited from their accounts: bills, purchases, and automatic savings transactions.
5th Grade Lesson Plan #2
Credit and Debit
The concept of investing is critical to students, and the younger they learn it, the better. Thanks to compound interest, kids’ accounts can grow exponentially compared to people who start investing later. You can cover the various forms of investing, showing the students that their money can steadily grow if they put it in the right place. You can go over stocks, bonds, mutual funds, CDs, real estate, and high-yield savings accounts, showing them the difference between putting your money under your mattress versus investing in high-return vehicles.
To further student understanding of investing, you can have them:
- Choose some of their favorite companies, restaurants, or service providers. For example, they may go with McDonald’s, GameStop, video game makers, or Tesla. Have them track the stock prices of these companies, looking at how much they would have made in the market if they had invested in this hypothetical portfolio.
5th Grade Lesson Plan #3
Taxes will be a reality as soon as these students begin managing their own money. You can explain the various taxes governments have in place, from sales tax to property tax to income tax. Students should understand they will not receive as much as they expect on their paycheck, thanks to taxes. Goods come with sales tax, meaning they will pay more for items than the price tag reflects. You can also describe the benefits of taxes to society, as we wouldn’t have high-quality roads, bridges, and schools without citizens paying their share.
You can enhance student understanding of taxes through hands-on activities. You can:
- Have learners compare tax rates in different states. They will see that some states have no sales tax, others have low property tax, and others have exceptionally high rates. You can guide them to know how these taxes can impact the way people live and spend their money.
5th Grade Lesson Plan #4
Federal Reserve Bank
The Federal Reserve has an enormous influence on the economy as a whole. The central bank in our country sets interest rates, impacting businesses and individuals alike. You can show students how there are several branches of the Federal Reserve across the country. 5th-graders begin to understand the importance of this entity and how it affects many aspects of our finances.
Fortunately, the Federal Reserve has extensive resources online, both about the economy and its function and role in the country. Students will see:
- How the individual branches work separately and in tandem with each other. Many handouts and worksheets dive into various topics, like how the Fed handles inflation and sets interest rates to keep the economy running strong.
5th Grade Lesson Plan #5
The Federal Reserve
Supply and Demand
Students at this age should learn about supply and demand, as the prices they pay directly result from these forces - generally, the more items that are available, the lower the price of the goods. You can show students that scarce products tend to cost more than readily available ones, based on the principles of supply and demand. You can cover how outside factors influence supply and how economic trends affect consumer demand.
To teach this topic, you can have students:
- Create supply-demand graphs to show the correlation between the two ideas. They can list their favorite item as a supply on the X-axis, showing how the trends change when demand increases or decreases.
5th Grade Lesson Plan #6
Supply and Demand
The idea of competition is essential for money education, and 5th-graders have a good idea of what it is all about. You can teach them how different companies compete in the same fields, how they adjust prices based on demand and production costs, and how entrepreneurs stand out above others. You can get into advertising and how companies use various methods to attract more customers and drive more profit than their competitors. Teachers can explain that government policies promote fair competition, talking about monopolies and anti-trust laws that help keep the playing field equal.
Thanks to many online resources, you can effectively deliver instruction on the idea of competition easier than ever. You can find:
- Websites that compare competitors based on market share, profit, revenue, and advertising spending. Students can use this data to compile reports showing how businesses in an industry separate themselves from others.
5th Grade Lesson Plan #7
Economies of Various Geographical Regions
In 5th grade, students learn a lot about geography, where they are in the world, and social studies lessons that show how we are all connected and unified. You can piggyback on this knowledge by looking at geographic regions and their economies. Each area of the country has its resources, transportation, and infrastructure, with unique characteristics that shape its economies. Challenge students to look at separate areas of the country and figure out how and why their economies operate as they do in that section.
Students can dive into how geography affects economics through activities like:
- Create a map of the U.S., with a focus on economics. Show the resources, state and local financial data, and primary goods produced on an illustrated map. This activity can be a fun and engaging way to tie together students’ understanding of geography and economics.