Never too early! First-graders learn money skills

The smart young savers in Kimberly Britt's first-grade class at Richland Elementary School in Memphis, Tenn., may not be able to spell "entrepreneur" yet, but she's teaching each one of them how to become one.

Budding restaurateurs, cat sitters and dog walkers, these 6- and 7-year-olds are also learning the difference between "needs vs. wants" and determining the "opportunity cost" of their economic decisions.

Britt reads a story about a young girl having to choose between using money she earned dog walking to buy a new vest or a bike. Camille Clippinger, 6, says she understands why the girl decided to just decorate her old vest so she could save the money for a shiny new two-wheeler.

"She didn't have enough money so she had to get one or the other," Clippinger says.

Clippinger and her classmates are learning the importance of saving, budgeting and entrepreneurship through a program called Smart Tennessee. In the past four years, the program has reached more than 70,000 students statewide in first through eighth grades.

"We're the only state that does a systematic, comprehensive approach starting in first grade, and going all the way up," says University of Memphis economist Julie Heath, who created the program. "I think we're changing lives."

Tennessee is one of only 13 states in the country that requires students take a personal finance course to graduate from high school. But Heath says it's important not to wait that long.

"We treat economic and financial literacy like reading literacy. You start early in the primary grades and build a foundation," says Heath. "Economic and financial literacy ... is not just an educational issue, it's an economic development issue."

A public-private partnership, First Tennessee Bank, a subsidiary of Horizon National Corporation, has given $500,000 to the program through its foundation.

Why make the investment in these young students? Says First Horizon CEO Bryan Jordan: "It's important for young people to learn about how they start at the early stages planning for the future ... That will make us a stronger community. That will make our employers stronger and will make ultimately the society we live in better."

State funds have matched the bank's gifts since the program's inception. Now Tennessee state treasurer David Lillard is expanding this campaign by launching a statewide financial literacy commission aimed at students — and parents — emphasizing the importance of contributing to college saving plans early on. founder Joe Hurley says several states, including California, Illinois, Maine, New York and Oklahoma, have efforts to link financial literacy initiatives with their state-sponsored college savings plans.

But Lillard believes Tennessee's approach — starting with students as young as 6 and their parents — is unique and may become a model for the rest of the nation. The goal, he says, is "educating elementary students and their parents not only about college savings, but about how to manage money for the betterment of their lives, their children’s lives and their entire family.”

Sharon Epperson is CNBC's personal finance correspondent and a recurring panelist on TODAY's Money 911, where financial experts take viewers' questions. This story was originally posted on