An innovative and widely acclaimed program created by a U of M professor teaches children
the do’s and don’ts of money management.
By Laura Fenton
How early should children learn the importance of saving money and the role it plays
According to Dr. Julie Heath, University of Memphis professor of economics, kindergarten
is the perfect time to start teaching children the basics of financial literacy.
“There’s no reason why it should be anything different than reading literacy,” says
Heath, creator of the Smart Tennessee program. “You don’t throw David Copperfield
at a first-grader and say we expect you to read this. You give them foundation, building
blocks and ABCs and you build on it. That’s exactly what we do, except it’s financial
To fill this niche, Heath created Smart Tennessee, a statewide financial literacy
program for public and private school kindergarten through eighth-grade students.
|Dr. Julie Heath, U of M professor of economics, gives students advice about financial
literacy at Richland Elementary.
The program, launched in 2006, created a public-private partnership between the state
of Tennessee and First Tennessee Bank for funding and curriculum guides from the state
Council for Economic Education. These organizations work together through the newly
formed Financial Literacy Commission.
“No other state is doing anything like this,” Heath says.
School systems have the option to use the curriculum as a supplement to classroom
guides. In addition to receiving the free “Financial Fitness for Life” curriculum
and one set of classroom workbooks, each participating school receives $500 to spend
on classroom supplies, substitute teacher expenses for when a teacher leaves for curriculum
training or however the school deems it best to spend the money.
More than 120 schools in 28 school systems in the state are participating in the program,
including all Memphis City and Shelby County schools.
But what is financial literacy?
“Financial literacy is teaching kids how to make good decisions,” Heath says. “Sometimes
that is about money. Do you buy the candy bar or do you save it for something bigger?
Sometimes it’s about whether to go to college or not.”
Heath and other leaders from the Financial Literacy Commission chose to add a section
that encourages saving for college in hopes that more children will be financially
able to further their education. The lessons also reinforce the information in the
state’s 529 (College Savings) Plan, which encourages parents to save aggressively
enough and long enough to pay for a child’s college education.
“For this year, we’ve written some new lessons to focus on college saving,” Heath
says. “We’ve prepared some information pieces that teachers can send home with their
kids targeting their parents about saving for college.”
But children sometimes connect the lessons about spending and saving to larger issues.
When Heath and a videographer from First Tennessee interviewed children in the program
for informational segments, Heath was in awe of the connections some children made
with the lessons.
One young boy told Heath that what he learned was that he should not be in a gang.
Nowhere in the lessons is there a section about gangs.
“His teacher didn’t tell him that,” Heath says. “This kid made that connection all
by himself. And that’s what it is. There are costs to things and there are benefits
to things. Sometimes the thing you apply it to is money. Do you save it? Do you spend
it? And sometimes it isn’t. Sometimes it’s about something that is much closer to
Although Heath did not use the boy’s interview in the segments (she felt it was not
fair to the child to use his comments in the promotion of the program), the child’s
honesty brought to light the underlying purpose of financial literacy.
“I don’t necessarily want to teach kids how to be more money savvy,” Heath says. “That’s
too narrow. I want to teach kids how to make good decisions about their lives, all
of their lives. I want to get to kids where they live. This is a moral thing for me.
Yeah, I want to educate them, but I want to give them a chance. This is how I can
see to do it.”
Although not all children make such keen connections with the program, students still
grasp important lessons about decision-making.
Students learn vocabulary such as “scarcity” and “opportunity cost” and listen to
stories about fictional characters Penny and Nicholas to relate the terms to the context
of their own lives.
In the first-grade scarcity lesson, children listened to a story about Nicholas and
his family having to choose between taking a vacation or replacing their recently
broken television. After listening to the story, the children drew pictures of items
they keep in their pockets. Richland Elementary School teacher Kimberly Britt then
outlined the shape of a pocket on the classroom floor and asked children to stand
inside the pocket as the item they drew was called out. With the pocket packed with
children and four students still to go, Britt ended the game because no more people
could fit inside it. The word “scarcity” then clicked for the children.
“We’ve learned that scarcity means that we don’t have enough,” says 7-year-old Colton
Matthews. “Like, if you put millions of things in your pocket, you’re going to have
to take something out.”
If the television vs. vacation dilemma were up to Colton, he’d choose the television.
“I would really pick the TV because if they went on the vacation they wouldn’t have
enough money to get the TV fixed,” he says. “That wouldn’t really be good because
nobody would able to watch TV. All they would have to dto is play.”
|Students at Richland take part in financial literacy exercises.
Since beginning the curriculum last September, Colton has discovered he has a knack
for saving. He kept his allowance and extra birthday and holiday money so he can purchase
“If something is really, really big and it costs a really, really lot of money, I’m
just going to save the money I have so I can get more,” Colton says. “If you really
get lots of money, you might be rich. If you save for four or five years, you [just]
might get rich.”
Incorporating the curriculum into the first-grade lessons has been easy enough because
everything aligns with the guidelines and lessons already required for children of
that age, Britt says.
“It only takes 10 to 15 minutes of the day, and any teacher has a random pocket of
time that you can fit that stuff in,” Britt says. “It’s really not hard.”
Lessons also focus on more than just math skills.
“It’s a very cross-curricular program,” she says.
Britt relates Smart Tennessee lessons to social studies or language arts topics to
reinforce the information in both contexts.
Her first-grade class is the only group of students currently incorporating the program
at Richland Elementary and is the first class to use it the full year. With it being
a new program last year, she added it just for the second semester. She is interested
to see how much more students retain during a full year.
“They’re a smart bunch of kids,” Britt says. “They’ll be able to hold onto it because
they can relate it to their own lives.”
In comparing pre- and post-assessments of the children involved with the curriculum,
the students had about a 45 percent improvement rate in comprehending the information,
Looking back at the more than three years it took Heath to have state officials and
businesses join together for the program, Smart Tennessee has become a larger program
than she could have ever imagined.
“It grew from there beyond my wildest dreams,” Heath says.
The state gave the program $125,000, which First Tennessee matched.
The program has also caught the attention of school systems, businesses and governments
in other states. Heath received questions about beginning the program in Arkansas,
Texas and Nevada after the program was featured on CNBC last September.
For as many strides as this program has made in the last five years, Heath is not
fully content. Her plans include fully integrating the curriculum into every classroom
from kindergarten through eighth grade in Tennessee and requiring standardized testing
of the material.
“If we’re ever going to get beyond this being an add-on, then we need to test it,”
she says. “If it becomes part of TCAP (Tennessee Comprehensive Assessment Program),
then everybody has to do it.”
The material is a requirement for high school finance students, and Heath believes
by extending the program to elementary and middle school students, the information
will actually stick.
“Maybe by the time they get to that high school class, maybe it will mean something,”