Start building financial literacy with these three fantastic introductions to money, economic terminology, and finance.
The Know-Nonsense Guide to Money: An Awesomely Fun Guide to the World of Finance! by Heidi Fiedler, illustrated by Brendan Kearney (Walter Foster Jr., ages 8-11)
This is a comprehensive, accessible and entertaining introduction to the topic of finance. It is divided into five main sections: What is Money?, Earning, Saving, Spending, and Borrowing. Each topic therein (e.g. checks, income, interest, taxes) is presented in a single page with an efficient and engaging explanation. The accompanying art maintains a lighthearted, often humorous tone, while effectively illustrating the concept. Best of all, it closes with A Note to Know-It-Alls, which emphasizes that money does not equate to a person’s worth and “the best things in life are free.”
Overall, this is a fun read even for someone like myself, who usually finds finance to be a dry topic. The illustrations keep it engaging for kids, and the information is perfectly parsed to allow for natural pauses. It could easily be used as a springboard for teaching a unit on finance, and would integrate well with hand-on activities. The book is so well done that I’m eager to get my hands on the others in this series!
One Hen: How One Small Loan Made a Big Difference by Katie Smith Milway, illustrated by Eugenie Fernandes (Kids Can Press, ages 8-12)
This is the story of Kojo, a young boy living in poverty who enriches his own life and his entire community following the receipt of a small loan. The purchase of one hen leads to profits that create opportunity for education. Education allows Kojo to pursue entrepreneurship with a bank loan. His business is a great success leading to employment, economic growth, and infrastructure investment in his community.
The body of the text is written in lengthier prose for older readers. But each page has summary text accompanying the illustrations, which makes it accessible for story time with younger children. The details of Kojo’s story make this a perfect accompaniment to units on finance as it illustrates numerous financial concepts: entrepreneur, microcredit, loan repayment, procuring loans, investment, profit, losses, taxes, financial goals, expenses, budgets, and more.
The accompanying art is gorgeous. Illustrative with a touch of fantastical, it often makes me think of the painter Marc Chagall and captivates my kids.
Best of all, the book closes with information about “A Real Kojo” and how small investments really do make large impacts on entire communities. Reading about how Kwabena Darko started in poverty, built a flourishing business, and started Sinapi Aba (Mustard Seed) Trust to provide small loads to Ghanaians (90% of whom are women) is nothing short of inspiring. Followed by a section about how you can help a microfinance program like Sinapi Aba Trust, it’s a book that leaves one feeling empowered to make a difference.
E is for Economics by Veronica Goodman, illustrated by Nicole Jones Sturk (Veronica Goodman, ages 2-5; Readers Guide at end of post)
The first step toward mastering any new subject is acquiring the associated language. But the language of finance is often absent from early childhood, and probably from most conversations with children. Authored by an Economist who noted this absence, this book is designed to build foundational language and facilitate further education.
Each page is dedicated to a letter of the alphabet, a vocabulary word beginning with that letter, and an associated illustration. It is designed for pre-readers and relies on parental engagement. The author provides a helpful Readers Guide (included at the end of this post) for those of us parents who don’t remember the definitions of some terms — I definitely looked a few up!
At it’s simplest level, it’s a great book to teach the alphabet and letter recognition. At it’s most developed with an engaged reader, it’s an excellent start toward financial literacy.
READERS GUIDE to E is for Economics by Veronica Goodman
E is for Economics is meant to be a humorous introduction to the language of economics. But in case you find yourself wondering what the terms for each letter mean, here is a quick explanation for each.
A is for Adam Smith
Adam Smith is an important historical figure in economics whose writing inspired a school of thought: classical economics. He published a famous book called The Wealth of Nations in 1776.
B is for Boom and Bust
Our economy, much like a balloon, can expand and contract over time. These expansions and contractions define the business cycle. “Boom and bust” is a popular shorthand term for these expansions and contractions.
C is for Capital
D is for Demand
Demand, in economics, can mean how much money any given person will pay for a good or service, like a ball or a haircut.
E is for Economics
The name of this book! Economics is a social science which studies production, distribution, and the consumption of goods and services.
F is for Fixed Costs
Fixed costs are costs that a business has to pay regardless of the quantity of goods or services produced.
G is for Goods
Goods are “things” that someone wants to buy.
H is for Households
A household includes any people living together in a home and can include one family or a group of people. This refers to or their financial worth and any physical assets of production, such as a factory.
I is for Inflation
Inflation is the relationship between the general price of goods and services and the worth of their corresponding currency as prices go up and down. In other words, a soda that used to sell for a nickel a long time ago might sell for a dollar or two today.
J is for Jobs
A category of work, such as a doctor, that people do in exchange for pay.
K is for John Maynard Keynes
John Maynard Keynes is an important historical figure in economics whose writing inspired a school of thought: Keynesian economics. He published a famous book called The General Theory of Employment, Interest and Money in 1936.
L is for Labor
The aggregate of all physical and intellectual work used in production of goods and services.
M is for Monopoly
When one supplier has dominant or exclusive control over an economic market for a good or service and consumers do not have a comparable substitute that they can purchase elsewhere for that good or service.
N is for Nash Equilibrium
Developed by famous mathematician John Nash, Nash Equilibrium is game theory
O is for Opportunity Cost
Opportunity cost means the benefit that you gave up in order to get something else. For example, if you have a $100 and you spend it all on chocolate, you might not also be able to go to the movies.
P is for Price
The amount of money you have to pay to get a good or service.
Q is for Quantity
The total amount of a good or service demanded at any given time by consumers.
a concept of
where the best outcome of a game is one where no player has an incentive to
deviate from his chosen strategy after considering an opponent’s choice.
R is for Resources
Resources are inputs used to produce things or to provide a service, such as natural resources like water and trees.
S is for Supply
The amount of a good or a service that is available to consumers.
T is for Technology
Machines, such as a computer, and tools developed from the application of scientific knowledge. Technology has economic effects, such as increasing productivity.
U is for Utility
Utility is a measure of satisfaction that a consumer gets from any good. It can measure how much you enjoy a slice of cake, for example. The utility that one person gets from something could be different from the utility another person gets from the very same thing.
V is for Variable Costs
A cost that can change depending on how much a business produces.
W is for Wages
Money paid to an employee by an employer for the work that they did.
X is for eXternalities
A positive or negative consequence that someone else experiences as the result of a person’s action.
Y is for Janet Yellen
Janet Yellen was the first female economist to hold the position of Chair of the United States Federal Reserve.
Z is for Zero Sum
A game or situation in which one side gains what the other loses.