This post is from staff writer April Dykman.

Last week J.D.’s wife, Kris, e-mailed me about an NPR story on a recent Girl Scout badge overhaul, specifically about merit badges for financial literacy. On the October 12 episode of Today on All Things Considered, host Guy Raz talks to Alisha Niehaus of the Girl Scouts of the USA about the update, the first major restructuring of the badge system since 1987:

“…we’re really a girl-led, girl-driven organization,” says Niehaus. “So we went to the girls and we said, what are you interested in learning, what do you think will prepare you for success, and what do you want and need for the next century? So that’s how we got all our new categories.”

According to a TIME article on the new program structure, if one of the nearly 3 million girls in the program wants to explore an area of study not already covered by the 100-plus merit badges, she can design her own area of study.

Girl Scouts aren’t just about cookies and camping anymore. Changes to stay relevant and reach the modern girl come amid a drop in cookie sales and donations and investment losses. In 2007, Scouts lost $1 million nationally in membership dues and an additional $1 million in donations.

Merit badges for financial literacy
Many of the traditional badges will stick around, such as cooking, athletics, first aid, and nature badges. New badges added to reflect modern times include the following:

  • Digital movie maker
  • Website designer
  • Computer expert
  • Geocacher
  • Locavore

Another new category of merit badges is financial literacy, with 13 types of personal finance badges, each earned by completing five activities. As a girl works her way from Daisy to Ambassador, she can earn some of the following money-related badges:

  • Money manager
  • Budgeting
  • Financing my future
  • Good credit
  • Philanthropy

The activities vary depending on age, with activities for 5-year-olds like recognizing different coins and activities for preteens like drawing up a budget. (Boy Scouts already have a “personal management” badge that requires them to complete activities like comparison shopping and stock market research.)

Of course, this is in addition to the cookie-related badges, such as “meet my customers”, “business plan”, and “customer loyalty”, meant to help girls develop the following five key skills:

  1. Goal setting
  2. Decision making
  3. Money management
  4. People skills
  5. Business ethics

“The cookie sale is a $700 million business run by girls, and those badges are a practical way of putting their financial literacy to action,” Niehaus told MSNBC.

Benefits of an early education in financial literacy
The changes to the program are meant to give girls a more robust education in finances, and the younger they start learning, the better. A recent Forbes article explored the importance of an early education in financial literacy for girls:

“Claire Mysko, author of You’re Amazing! A No-Pressure Guide to Being Your Best Self, partners with Girls Inc. to provide guidance for girls’ empowerment. Mysko recognizes the connection between financial freedom, healthy relationships and social justice.

She says, ‘Financial literacy training instills girls with the knowledge and the confidence they’ll need to be economically independent. They’ll be less likely to feel trapped in unhealthy relationships because they have no means to support themselves. Girls who are financially literate are also better able to identify economic injustices in the world around them. A greater understanding of pay inequities, poverty, and economic abuse means that girls will be more prepared to fight for equality and justice for all girls and women.’”

The implications of a financial education extend far beyond having an emergency fund or contributing to a Roth IRA — it could help someone avoid or break free from an abusive relationship. The Forbes article explains that personal finance is often left out of the equation in helping abuse victims, but according to the Task Force to End Sexual and Domestic Violence Against Women, about half of all victims of domestic violence victims lose a job because of abuse, particularly detrimental in a lagging economy. Abusers also use finances as a way to control their victims, including:

  • Cutting off access to money or the means to earn it, thereby making the victim dependent for food, shelter, and clothing
  • Refusing to let the victim keep a personal bank account
  • Stealing from the victim
  • Exploiting the victim’s assets for personal gain
  • Forcing the victim to obtain credit in his or her name, eventually ruining the victim’s credit score

Teaching kids about credit, budgets, and money management at a young age gives them the economic power to take care of themselves, which is an important factor in avoiding or freeing themselves from an unhealthy relationship.

Getting kids interested in finances
There are numerous ways to make sure your own kids get a financial education.

In Making Young Kids Smarter About Money, writer Emily Glazer talks about ways to teach children about money, such as:

  • BizTown summer camp. Kids ages 10 to 14 create their own economy, complete with jobs, rent, banks, and more.
  • Planet Orange. ING Direct offers activity books for 1st- to 8th-grade students, such as money word searches and puzzles.
  • Phone apps. Do your kids like to “borrow” your smartphone? “There are apps for younger kids that focus on budgeting and saving,” says Glazer. “For instance, the Kids Money app for the iPhone teaches about saving for long-term purchases, like a new toy. Android smartphone users can try Kids Shopping Calc, which teaches budgeting by shopping in a virtual store with a set amount of money.”

There are a lot of other ways to sneak in lessons on the value of money. Is there an entrepreneur or successful businessperson who could speak at your child’s school? Can you use an allowance to teach your child about money or give gifts that contribute to their economic well-being?

While these are all great methods to get kids interested in personal finance, I suspect that the most effective way to teach kids about money isn’t as expensive as summer camp or as high-tech as phone apps. Ask your young child to hand the waitperson a $2 tip; explain the family budget to your 13-year-old; or show your high school kid how to understand a credit card statement. Ongoing conversations about money with your children can be the best financial education of all.

What are some ways you teach your kids about money?

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