In Part 1, I discussed the need for understanding Financial Literacy and including it in our students’ middle and high school experiences. Here, I will discuss the value of high-quality assessments as tools to assist in the learning process.
In 2021, CenterPoint developed interim assessments measuring student learning of three broad financial skills built into a district’s financial literacy course materials:
- Understand financial terms.
- Use financial formulas.
- Make sound financial decisions.
Interim assessments help teachers gain an understanding of what students know and where they need additional instruction. This information helps students self-assess progress and families understand where their children are on their journey to meeting grade- or course-level expectations. In this way, interim assessments are the glue of a quality course.
The Financial Literacy interims assess both mathematical and financial standards as part of this school district’s curriculum. Each question requires students to demonstrate financial knowledge, skills, and/or reasoning with strong connections to mathematics. To do this, every question must:
- be tightly aligned to the standard it is intended to measure,
- give students a realistic context they might encounter in the real world, and
- undergo thorough quality control protocols ensuring readability, with a clear understanding of the given information and of what the question asks students to do.
Applying Knowledge
Since the objective is for students to apply this knowledge rather than simply regurgitate it, each question requires students to use their existing knowledge to answer a question or make a decision.
When recently taught vocabulary terms and formulas are incorporated into questions, students are asked to understand the meaning of them in the context of the subject. The goal is for students to understand the term well enough to identify the correct formula needed to provide an appropriate answer. Students are provided with a list of formulas during the course, and they continue to have access to them as they take the assessment.
For example, consider the formula used to calculate the monthly payment for a loan.
Requiring students to memorize this formula is unnecessary, but requiring them to identify when they need to use it - as well as knowing how to calculate the solution correctly - is necessary. Here is an example of a question that would use this formula:
Sasha is planning to buy a new car. She found two car dealers offering slightly different deals on this car.
Car Dealer A | Car Dealer B | |
Cost | $26,000 | $24,000 |
Annual Percentage Rate | 4.25% | 5.5% |
Term of Loan | 5 years | 4 years |
- What is the monthly payment for each loan?
- What is the total amount of all payments over the course of each loan?
This question requires students to:
- Read a table of data
- Identify the correct formula
- Understand the purpose of the formula
- Use the formula to calculate an exact amount (question 1)
- Use their knowledge of the situation to calculate another exact amount (question 2)
A third question could ask students to use critical thinking to make an argument for why they would choose each loan and provide evidence supporting their choice. In real life, easy and clear and simple answers (with no decimals) are rare. Proper preparation of students for college-and-career post-graduation requires an exposure to that reality early and often.
Decision making
Making financial decisions requires manipulating numbers, but the numbers only provide information. Decisions are based on an understanding of the entire situation and being able to understand trade-offs between options.
In the example problem above, the decision to choose Dealer A or Dealer B involves considerations such as:
- How much can I afford for a monthly payment?
- What is my income today and what will my income be next year or the following year?
- Do I need/want to pay off the loan in less time (4 years) or more time (5 years)?
- Are the car warranties the same or different from the two car dealers?
A high-quality assessment question—like good teaching—requires the student to think. Merely following steps to get an answer is, while necessary, not enough to inform financial decision-making responsibly. Thinking, reasoning, questioning, and explaining are the skills that students need to be successful. That’s what we focused on in developing the interim assessments.
If the next generation of students were equipped with this level of financial literacy, consider how this knowledge might benefit our country in the future. A more informed citizenry of the future could help us as a nation avoid or reduce the impact of the next financial crisis.
At CenterPoint Education Solutions, we write every assessment question with the student in mind. Today’s students are tomorrow’s leaders, parents, teachers, and neighbors. We all benefit from an informed and educated population that possesses financial literacy and a growth mindset.
After over 30 years of experience in education at the classroom, district, and organizational level, Peter Cincotta is now a Senior Instructional Designer in mathematics for CenterPoint Education Solutions. CenterPoint is a mission driven, nonprofit organization based in Washington, DC dedicated to supporting schools and districts in implementing coherent instructional models consisting of high-quality curriculum, tightly aligned assessments, and professional learning.