Teaching about money shouldn't wait until high school or college-and it's inner-city schools and a new economics program that are leading the way to elementary financial literacy
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COLUMBUS, Ohio-When fourth-grader Kadayah Keys casually stops by the store at Harambee Christian School here to buy a granola bar for her mid-morning snack, a lot more goes on than a simple commercial transaction.
Kadayah pays for her granola bar not with cash, nor even with an old-fashioned debit card. Instead, she quickly enters her student ID-and the transaction is cashless, cardless, and paperless. But she's not being taught some bad habits as a consumer: Kadayah, instead of charging a purchase to be paid back later, is simply deducting the cost of the bar from credit she has previously built up in a school account. Within the hour, she'll be checking the status of her account.
If you quizzed her carefully, Kadayah could probably tell you a half-dozen sophisticated details about how her mid-morning purchase affects her overall economic well-being. Kadayah could tell you about opportunity costs, compound interest, margin, and profit. She can do that because of a program called "Infusionomics"-a co-curricular approach now used by a small network of schools to equip inner-city boys and girls with the economic and financial literacy they need to thrive in the mainstream economy.
Before the school day is over, Kadayah will have bumped into the all-but-invisible Infusionomics program at least a dozen more times. There's no Infusionomics class to go to. No Infusionomics lecture. No Infusionomics textbook. But the ideas and the emphasis are always there-just like economic concepts are always present in every facet of real life. Through Infusionomics, discussion of economic theory regularly sneaks into the math program, into history and literature, and into science as well.
To help Kadayah keep track of so complex a cause-and-effect system, a school-wide computer system deftly augments Infusionomics with a system called "Economis" that she, along with the other 104 Harambee students, access and exit repeatedly through the school day. "Did I get extra 'bling' in my personal account," a student may ask himself, "for that A I earned in music yesterday?" ("Bling" is the unit of exchange in the Harambee economy-and different individual schools use different approaches.) "How many bling did I lose in my account for being tardy for gym?" Because the answers have such practical consequences, affecting their ability to buy and sell, students pay close attention.
By design, Infusionomics and Economis steer the whole school experience away from some abstract other-worldly academic approach. They place students (as in real life) within a context of checking accounts, savings accounts, taxes, interest, the in-school store, and even an in-school profit-making business.
This sophisticated and holistic instructional approach is happening here at Harambee-and at half a dozen other schools around the nation-because of the unusual cooperation of a handful of visionary individuals and organizations. They include:
• StreetSchool Network-a loose nationwide gathering of mostly private Christian schools ministering to minorities in inner-city settings.
• The Powell Center for Economic Literacy, based in Charlottesville, Va.
• Sagamore Institute, a market-oriented think tank in Indianapolis, Ind.
• Central Ohio Youth for Christ of Columbus, Ohio, and its "renaissance man" director, Scott Arnold.
Not to be ignored: Private donors over the last five years have invested more than $2.5 million in the project. These funders value collaborative ventures and have been the glue holding together such a multi-party team. All the key players lament the dismal level of American economic and financial literacy. As Sagamore's Amy Sherman reports, "In one recent study of economic awareness among high school seniors, the average test score was 47.5 percent-a solid F. Real hope for America's long term economic future rests with the next generation."
Against that backdrop, the project funders began trying six years ago to link the efforts of several of the organizations. The Powell Center in Virginia, for example, had done good work developing a secular, K-12 curriculum in economic literacy-but no one outside the elite Collegiate School in Richmond was using it. Might it be suitable-or adaptable-for some of the inner-city kids with whom StreetSchool Network (SSN) and Sagamore Institute were working? And what would it take to integrate those efforts with a specifically biblical framework of thinking?
In 2006, Powell invited teachers from the SSN to Richmond to receive training in teaching economics. The urban practitioners were skeptical at first, but then began to grasp the profound value of what they were learning. SSN vice president Todd Goble recalls, "We started realizing that these principles-about cost-benefit analysis and opportunity costs and short- and long-term consequences-were incredibly relevant for the life skills we're trying to equip our kids with. This is the kind of practical knowledge that can help them climb out of poverty."
Soon, Sherman, Goble, and leaders from Powell and Central Ohio Youth for Christ (COYFC) were joining forces to design a two-track strategy to teach key economic concepts (like scarcity and margin) alongside financial life skills (like controlling one's checkbook and credit cards). And the partners determined to focus on both schools and after-school ministries (like COYFC) reaching disadvantaged, urban kids.
Increasingly, the team sensed that the project was doomed to fail unless three criteria were met: The program had to seem relevant to the kids. It had to be easy for teachers to learn and use. And it had to be fun.
Over the next several years, Powell and SSN designed and implemented economic literacy training for teachers and developed lessons around nine foundational "Keystone Economic Principles" (see below).
Meanwhile, Sherman and Scott Arnold from COYFC led the after-school track focusing on financial literacy. Arnold and his computer-savvy colleague Bryan Gintz had developed the Economis software for use in their City Life center in Columbus' near west side. In five years of experience as head of the local Youth for Christ, Arnold had come to know firsthand how practical you had to be with the young people. No high-sounding theories. No abstractions. What you taught had to make sense in the real world. So Economis provides a lively interactive online virtual economy-written in the language of the youth who would use it, but fully consistent with the heavy-duty content Sherman, Powell, and SSN were assembling. Over 1,100 urban youth participated in Economis in the demonstration project Sherman oversaw in East Palo Alto, Calif., Indianapolis, Memphis, Miami, and Richmond.
Through Economis, students earn "currency" for various kinds of behavior and accomplishment. That currency is deposited like a weekly paycheck in individual accounts-minus "taxes." With what's left, students can invest in an interest-bearing savings account, in virtual CDs, or in a stock portfolio synchronized with real-world stocks at real-world prices. Or, like Kadayah, they can splurge at the school store.
But, Sherman says, the infusion of basic concepts powerfully curbs the temptation to splurge. Teachers weave the set of nine Keystone Principles into the standard curriculum-and students come, little by little, to recognize those concepts at work. The whole enterprise, Sherman stresses, is theologically rooted in a "creation-fall-redemption-consummation narrative of a distinctly Christian and biblical outlook."
Does it work? Ask the teachers who have led the way. Harambee's third-grade teacher Jim Flaherty estimates he's gained an average of 2.5 hours of instructional time in his classroom every week-just because everyone's thinking in a more orderly way. Punctuality and classroom behavior have shown marked improvement.
Or ask principal Alex Steinman, who says the combination of Infusionomics and Economis has helped Harambee achieve some impressive academic goals. Where public schools serving the same neighborhood as Harambee typically perform around the 20th percentile on Metropolitan Achievement tests, Harambee students are regularly at the 50th percentile. And Sherman's five-city demonstration project shows kids increasing their financial literacy by 26 percent, based on pre- and post-tests.
Now, the team behind Infusionomics and Economis is eager to see the programs applied and tested in more mainstream Christian school and homeschool settings. "If this works-and we think it does-in an inner-city setting, why wouldn't it work where we don't have to compensate for so many disadvantages?" asks one fifth-grade teacher. The same teacher noted, though, that ignorance of key economic principles is probably just as profound in mainstream school settings as in inner-city schools. "That's why our economy-and that of the world at large-are in the mess they're in," he said.
So the team of innovators is now repackaging the program for broader use and reviewing finances, including the hardware and software costs of Economis. The next big challenge will be to take it all to a wider circle of schools, and to persuade teachers and administrators of the importance of revising some long-standing habits.
Todd Goble, project leader for Infusionomics, sums it up like this: "The most important thing we do is to help students make intelligent choices-choices in which they consider the consequences of their decisions. If it's true, as someone said, that one's character is the sum total of hundreds of little choices we make every day, then we're not just helping them to think better. We're helping them build solid character. And they'll need both to thrive in the century ahead."
In the Infusionomics approach, nine foundational principles get special attention and emphasis. Woven regularly not just into explicit discussions about economics but every other subject in the curriculum as well, they are:
1. We all make choices.
2. There ain't no such thing as a free lunch.
3. All choices have consequences.
4. Economic systems influence choices.
5. Incentives produce "predictable" responses.
6. Do what you do best; trade for the rest.
7. Economic thinking is marginal thinking.
8. Quantity and quality of available resources impact living standards.
9. Prices are determined by the market forces of supply and demand-and are constantly changing.
Changing the financial culture
Scott Arnold isn't the sort of fellow you'd expect to produce a complex piece of financial software. He didn't expect it himself: "I'm probably missing a few brain cells," he says in a self-deprecating moment.
Arnold arrived here on the near west side of Columbus, Ohio, in 1992, committed to a ministry of evangelism, discipleship, and leadership development. He had all sorts of opportunities for "social ministry," but that wasn't his calling: "I had ringing in my ears that if I got involved in 'social ministry,' it meant I was going liberal."
But after three or four years, "I hollered 'uncle.'" All Arnold could see at that point were families without dads and young moms whose worlds offered nothing but illegal and immoral ways to support their needy families: "The kids who were in my Bible studies all faced internal struggles over whether to follow God-or this other path. And time after time, the other path won out. Time after time, I'd watch helplessly as they withdrew from the Bible studies."
What was missing? Arnold realized the kids needed to learn what the economic drivers were all about. They needed to find ways to generate more "financial hitting power." They needed to learn how to manage what they generated.
Arnold remembers one family's winning $60,000 in a lottery-and before anybody knew what happened, the $60,000 was gone. The family couldn't afford summer camp for their daughter. It was a wake-up call.
"I knew a banker, and I knew a stockbroker. Maybe they could tell the kids what they needed to learn. But kids have an aversion to talking heads." Arnold's undergraduate background was in psychology, and he knew that abstractions were futile. The kids he sought to influence were "tactile learners," so Arnold asked, "'Could we replicate a paycheck? Could we help the kids deposit that paycheck-minus taxes and insurance?' A friend suggested a time clock to promote accountability. Pretty soon, we were weaving all these things together."
A charitable foundation gave $150,000-and later, a good bit more. "We were up and running, and after a whole lot of testing and debugging, we were ready to try the software in a small variety of settings."
But Arnold stresses that the big challenge is not the development, installation, and use of the Economis software. "The big challenge is a shift in thinking by leaders, teachers, and administrators. It changes the culture of a place," he said. "It's very much God's reality. It's God's grid for seeing things-but it's a good bit different from what a lot of people are used to."
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