Teaching elementary school kids about money
Teaching elementary school kids about money
I'm wondering how other Boglehead parents have taught their kids about money? Not the mechanics of it (quarters, dimes, dollars, etc) but about the importance of saving and setting aside for the future. What did you do with your kids that you felt was effective?
Our oldest is in early elementary school. Now that she is progressing with math, and now that she's asking us to buy her things (some of which I don't think are "essential") I think it's time to start teaching finance, and especially, the importance of not spending everything you have.
How did you help your children learn about money, and was it effective?
Our oldest is in early elementary school. Now that she is progressing with math, and now that she's asking us to buy her things (some of which I don't think are "essential") I think it's time to start teaching finance, and especially, the importance of not spending everything you have.
How did you help your children learn about money, and was it effective?
-
- Posts: 25617
- Joined: Thu Apr 05, 2007 8:20 pm
- Location: New York
Re: Teaching elementary school kids about money
Try this: Your local neighborhood squirrel has to accumulate X number of nuts to live each month. Come the fall season, the squirrel needs to gather X+Y nuts to be able to survive the winter months when there is less or no food available. How many nuts does the squirrel need to save to be able to eat and live during the winter months before food once again becomes plentiful in the spring, summer and fall months? Wouldn't it be easier for the squirrel to accumulate it's nuts during the spring, summer and fall months so that more will be available later on? If the squirrel waits until the last month before winter, will the squirrel be able to survive the winter if there aren't enough nuts to be found?
Let us know how that goes over.
Let us know how that goes over.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Teaching elementary school kids about money
The tried and true, budgeting allowance. He/she wants a toy, game or special book they must save x amount until they have enough money to purchase. We used this early on with our kids and they are debt free, except for mortgage, today.
-
- Posts: 25617
- Joined: Thu Apr 05, 2007 8:20 pm
- Location: New York
Re: Teaching elementary school kids about money
Sure that works, as a result, my kid developed an entrepreneurial streak developing ideas of projects that needed to be done around the home including bagging of fallen leaves, cleaning the house, tidying up disarray. The prices offered were high enough to accumulate that spending budget in a relatively fast turnaround time.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Teaching elementary school kids about money
We have a local credit union with a wonderful program that works with the local schools. The kids can open a savings account and once a week there is a table manned at the school by parent volunteers where the kids can deposit money into their account (even just 2-3 cents). The bank collects the deposit from the school and updates their accounts. The kids get to see their balance grow over the course of the year and interest being added.
Re: Teaching elementary school kids about money
Teach them simple saying to influence their subconscious brain
1. Money is a tool of exchange, which can not exist if there are not people to produce goods
2. Stocks is the only commodity people don't buy when they are on sale?
3. Always buy stocks when the market crashes
4. Why buy soups when cereal is on sale?
5. Price is what you pay, value is what you get.
6. Its better to pay cheap price for a great company than great price for a cheap company
7. Buy when everyone is selling, sell when everyone is buying
You can find many such great sayings by great investors like Ben Graham, Warren Buffett etc.
You can play the banker role and teach them about borrowing, saving, interest and dividends.
1. Money is a tool of exchange, which can not exist if there are not people to produce goods
2. Stocks is the only commodity people don't buy when they are on sale?
3. Always buy stocks when the market crashes
4. Why buy soups when cereal is on sale?
5. Price is what you pay, value is what you get.
6. Its better to pay cheap price for a great company than great price for a cheap company
7. Buy when everyone is selling, sell when everyone is buying
You can find many such great sayings by great investors like Ben Graham, Warren Buffett etc.
You can play the banker role and teach them about borrowing, saving, interest and dividends.
Re: Teaching elementary school kids about money
My two kids are close in age. They had a small neighborhood newspaper route together. Since we bought them everything they really needed and gave them an allowance, they really did not need the paper route money. So we told them they could keep 10% for spending and the other 90% had to go into a savings account. When their savings accounts reached $1000, my younger child said "I can't believe I have spent $100".
We also bought them school clothes out-of-season. I showed them the original price and the sale price. I asked them "would you rather have one item bought later, or three items for the same cost bought now?" They quickly caught on to that.
We also bought them school clothes out-of-season. I showed them the original price and the sale price. I asked them "would you rather have one item bought later, or three items for the same cost bought now?" They quickly caught on to that.
Re: Teaching elementary school kids about money
Don't teach about money, teach about deferred gratification. Read up on the Marshmallow Test.
https://en.wikipedia.org/wiki/Stanford_ ... experiment
This is a generalized skill that has many useful applications. Budgeting / allowance can be one aspect of this.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: Teaching elementary school kids about money
We had the bank thing that a PP described, through our kids' school, when my older two were younger. It was a fabulous way to learn about saving and interest and all that.
One thing we've always done is, the kids would get checks from Grandma for Christmas, which we would put in savings. Then when we traveled, they were allowed to pull money out to spend on vacation. It was amazing the choices they made with their money, versus what they begged us for.
In a variation on that, when we took the kids to Disney World, we had our older son (maybe 10-11 at the time) take out $100, and he budgeted $25 each for the four parks. Well, he got to Epcot (park #2), and he just HAD to have Pokemon cards from the Japanese dept. store. Because you can't just buy Pokemon cards in any Target across the US, right? He argued that it was HIS money, and he could spend it as he liked. So, we let him spend his entire $100 on Pokemon cards. A couple days later, he falls in love with something in another park. There was much wailing and gnashing of teeth, but we stuck by our guns--it was HIS money, HE made a choice, HE regretted it. Life can be difficult sometimes. I think it's very important to let kids make these kinds of mistakes--when they're young and the stakes are low.
Another thing that we do is offer to pay half for something that falls between a "need" and a "want". DD14 wants a Macbook Air. She'll get back to us when she's scrounged up $500 or so. We've also done this with Ugg boots or similar items that fall in between need and want.
One thing we've always done is, the kids would get checks from Grandma for Christmas, which we would put in savings. Then when we traveled, they were allowed to pull money out to spend on vacation. It was amazing the choices they made with their money, versus what they begged us for.
In a variation on that, when we took the kids to Disney World, we had our older son (maybe 10-11 at the time) take out $100, and he budgeted $25 each for the four parks. Well, he got to Epcot (park #2), and he just HAD to have Pokemon cards from the Japanese dept. store. Because you can't just buy Pokemon cards in any Target across the US, right? He argued that it was HIS money, and he could spend it as he liked. So, we let him spend his entire $100 on Pokemon cards. A couple days later, he falls in love with something in another park. There was much wailing and gnashing of teeth, but we stuck by our guns--it was HIS money, HE made a choice, HE regretted it. Life can be difficult sometimes. I think it's very important to let kids make these kinds of mistakes--when they're young and the stakes are low.
Another thing that we do is offer to pay half for something that falls between a "need" and a "want". DD14 wants a Macbook Air. She'll get back to us when she's scrounged up $500 or so. We've also done this with Ugg boots or similar items that fall in between need and want.
-
- Posts: 3589
- Joined: Fri Dec 26, 2014 3:19 pm
Re: Teaching elementary school kids about money
The constant running commentary they hear from their parents is important. "We have the money to do xyz, but we're saving for college and retirement so we're going to do lmnop instead."
"These pants are $100, we could get 2 pairs of pants on sale for less than that at Target."
"Close the door, I can't afford to heat the whole neighborhood!"
"Chicken is on sale this week, we'll buy extra and freeze it for future meals."
Not the lectures about savings and investing, but watching how you actually live your life.
"These pants are $100, we could get 2 pairs of pants on sale for less than that at Target."
"Close the door, I can't afford to heat the whole neighborhood!"
"Chicken is on sale this week, we'll buy extra and freeze it for future meals."
Not the lectures about savings and investing, but watching how you actually live your life.
-
- Posts: 8620
- Joined: Wed Apr 08, 2015 11:31 am
- Location: West coast of Florida, near Champa Bay !
Re: Teaching elementary school kids about money
I agree 100%!NotWhoYouThink wrote: ↑Wed Dec 13, 2017 11:45 am The constant running commentary they hear from their parents is important. "We have the money to do xyz, but we're saving for college and retirement so we're going to do lmnop instead."
"These pants are $100, we could get 2 pairs of pants on sale for less than that at Target."
"Close the door, I can't afford to heat the whole neighborhood!"
"Chicken is on sale this week, we'll buy extra and freeze it for future meals."
Not the lectures about savings and investing, but watching how you actually live your life.
Children observe their family's dynamics. Providing good role models should be Job One for any parent.
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
- randomizer
- Posts: 1547
- Joined: Sun Jul 06, 2014 3:46 pm
Re: Teaching elementary school kids about money
My parents taught me how to save in order to get things, but that's really just another way of saying they taught me how to spend. Took me almost 30 years to unlearn it.
87.5:12.5, EM tilt — HODL the course!
Re: Teaching elementary school kids about money
I believe Khan Academy on YouTube has finance videos suited for youngsters.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
- TomatoTomahto
- Posts: 17100
- Joined: Mon Apr 11, 2011 1:48 pm
Re: Teaching elementary school kids about money
Good luck. Our two kids were raised similarly, are close in age, and couldn’t be more different when it comes to money.
I get the FI part but not the RE part of FIRE.
Re: Teaching elementary school kids about money
My dad was a veterinarian and oprator of animal hospital. I remember dinners talks where the parents were talking about needing to save for the lean winter months in order not to let some workers go.NotWhoYouThink wrote: ↑Wed Dec 13, 2017 11:45 am The constant running commentary they hear from their parents is important. "We have the money to do xyz, but we're saving for college and retirement so we're going to do lmnop instead."
"These pants are $100, we could get 2 pairs of pants on sale for less than that at Target."
"Close the door, I can't afford to heat the whole neighborhood!"
"Chicken is on sale this week, we'll buy extra and freeze it for future meals."
Not the lectures about savings and investing, but watching how you actually live your life.
Learned that
1) saving money for lean times is good.
2) people who work for you are important
3). Purchases may need to be delayed because of 1and 2.
Dinner time money talks can be good.
-
- Posts: 3589
- Joined: Fri Dec 26, 2014 3:19 pm
Re: Teaching elementary school kids about money
Well, we have that too, but the one who spends more is motivated to earn more, so it will probably work out about right.TomatoTomahto wrote: ↑Wed Dec 13, 2017 12:20 pm Good luck. Our two kids were raised similarly, are close in age, and couldn’t be more different when it comes to money.
-
- Posts: 13356
- Joined: Tue Mar 23, 2010 1:45 pm
- Location: Reading, MA
Re: Teaching elementary school kids about money
Same with my two kids...TomatoTomahto wrote: ↑Wed Dec 13, 2017 12:20 pm Good luck. Our two kids were raised similarly, are close in age, and couldn’t be more different when it comes to money.
Attempted new signature...
Re: Teaching elementary school kids about money
We had discussions when it was situationally appropriate about "the most expensive thing you will ever buy is your retirement. Grandma and Grandpa were good savers and so now they can afford not to work any more, and so they can come play with you. The second most expensive thing you will ever buy is your house; you start by sharing it with the bank but you want to get to the point where it's all yours, as soon as possible, so you can be done paying for it and use that monthly money for something else instead, like more fun with the kid. The third most expensive thing you will ever buy is your college education. And the fourth most expensive thing you will ever buy is your car, but you will need more than one of those in your life. And so we need to save every time we earn money, because otherwise we won't be able to have those expensive but important things."
It hasn't come up recently and they're too young for me to worry about it too much. But they know you cannot go to the store without a list! And they know if X meat is not on sale this week, unless we have some in the freezer from buying ahead the last time it was cheap, we won't be eating it (similar but maybe more effective when the example is the frozen pizza they like). And like a previous poster, they are involved in helping buy their clothes ahead and from used sources. Leading by example, example, example, and explain, explain, explain. I often at home I am doing a running monologue about the how and the why about what I'm doing, but mine are still young enough to really enjoy that.
It hasn't come up recently and they're too young for me to worry about it too much. But they know you cannot go to the store without a list! And they know if X meat is not on sale this week, unless we have some in the freezer from buying ahead the last time it was cheap, we won't be eating it (similar but maybe more effective when the example is the frozen pizza they like). And like a previous poster, they are involved in helping buy their clothes ahead and from used sources. Leading by example, example, example, and explain, explain, explain. I often at home I am doing a running monologue about the how and the why about what I'm doing, but mine are still young enough to really enjoy that.
Re: Teaching elementary school kids about money
Another area for teaching about money is credit cards. I showed my kids a credit card bill for about $500. The bill said I only had to pay $15. I told them "that sounds easy, doesn't it". Then I explained how much interest I would be charged on the next bill for the $485 left unpaid. I further explained that I would rather spend that money on buying something rather than giving it to the bank. They are now adults and I believe that they have never paid credit card interest.
- FireflyGlow
- Posts: 377
- Joined: Sat Jul 25, 2015 2:13 pm
Re: Teaching elementary school kids about money
I am not an enormous Dave Ramsey fan because I think that his investment advice is terrible. I am also not going to cut up my credit cards that I pay off every month. However, I just read his book Smart Money Smart Kids that he co-wrote with his daughter, Rachel Cruze. It was actually quite good and broke everything down pretty well by age group. My son is 10. I intend to start the Junior Envelope program (or at least that is what I think it's called) in 2018 with him. I also agree with Dave's advice 100% on parents paying for college.
Re: Teaching elementary school kids about money
Elementary school kids cannot make any financially relevant decision, given that they have no capital to speak of.
It could be counterproductive to bore them with unnecessary notions, since that could generate ingrained hostility to the whole thing.
Personally, I knew very little of financial markets until I had money to invest.
Of course, not being an expert of financial markets does not mean that one does not know algebra and can't keep a checking account balance from going negative.
It could be counterproductive to bore them with unnecessary notions, since that could generate ingrained hostility to the whole thing.
Personally, I knew very little of financial markets until I had money to invest.
Of course, not being an expert of financial markets does not mean that one does not know algebra and can't keep a checking account balance from going negative.
Re: Teaching elementary school kids about money
You could work through how much it costs the teacher to buy classroom supplies this year and compare it to what she expects to pay for those same classroom supplies next year.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"
Re: Teaching elementary school kids about money
I wanted to ask the same question
-
- Posts: 562
- Joined: Thu Nov 02, 2017 9:42 pm
Re: Teaching elementary school kids about money
I have four daughters, and one of them in particular was always asking for "stuff," and didn't understand it when I told her that I couldn't afford what she wanted. "But mom, you have checks in your check book!" At that time, I was paid monthly, so one time I cashed my entire paycheck, and we drove around town paying all of the bills with cash. Her job was to be my "secretary," and keep track of how much money we spent. We went and made a house payment, paid the electric bill, car payment, dry cleaners, bought groceries, etc. all in one day. At first, she was very impressed with the relatively large amount of money she got to hold in her hand, but after having to count out the money and keep a running balance, she saw how rapidly the pile of money went down. That was the end of the "gimmes" for her, and as an adult she is one of the most frugal persons that I know.
"A nickel ain't worth a dime anymore." Yogi Berra's financial wisdom.
Re: Teaching elementary school kids about money
I have an eight year old and eleven year old. This year they started getting allowances ($20/month), so they have learned to save money towards things they want to buy, which greatly reduces whining at the store.
We also start the year with a "Fiscal Fast," which means just spending on needs for all of January (this pays for Christmas). Before the Fiscal Fast we sit down and talk about what needs are (mortgage, non-restaurant food, etc.) versus wants. The kids seem to enjoy it; they like coming up with free things to do all month.
It helps that their schools do a lot of units on money and finances. In first grade the kids do an exercise where they get a certain amount of "money" per month and have to pay rent for their desk, and pay for other "services" during the day. I was really happy that they were learning budgeting so early!
We also start the year with a "Fiscal Fast," which means just spending on needs for all of January (this pays for Christmas). Before the Fiscal Fast we sit down and talk about what needs are (mortgage, non-restaurant food, etc.) versus wants. The kids seem to enjoy it; they like coming up with free things to do all month.
It helps that their schools do a lot of units on money and finances. In first grade the kids do an exercise where they get a certain amount of "money" per month and have to pay rent for their desk, and pay for other "services" during the day. I was really happy that they were learning budgeting so early!
-
- Posts: 585
- Joined: Fri Oct 13, 2017 8:45 am
- Location: PA
- Contact:
Re: Teaching elementary school kids about money
Have a 9 year old. I started when she was younger explaining a need vs want. Wants if you really want them save up your money.
There have been some teachable moments from doing need vs want like when a video game system she saved up for wasn't what she expected. She has told me she wished she waited for a different system. "Lightbulb" "see that is why its smart to save and get what you want".
I also take her to do the grocery shopping with me. Coupons and checking what is on sale. Trying to ingrain that desire to save money.
I heard good things about Dave Ramseys books and board game for little ones have not used it though.
I remember a toy she had when she was little was a supermarket check out with cash register. Came with very little fake money but it
did come with a charge card.....that was "lost" quickly.
There have been some teachable moments from doing need vs want like when a video game system she saved up for wasn't what she expected. She has told me she wished she waited for a different system. "Lightbulb" "see that is why its smart to save and get what you want".
I also take her to do the grocery shopping with me. Coupons and checking what is on sale. Trying to ingrain that desire to save money.
I heard good things about Dave Ramseys books and board game for little ones have not used it though.
I remember a toy she had when she was little was a supermarket check out with cash register. Came with very little fake money but it
did come with a charge card.....that was "lost" quickly.
Re: Teaching elementary school kids about money
Mostly just tried to teach them about giving and sharing in elementary school. Focusing on an appropriate heart about money rather than head
In high school we started talking about the difference between income and wealth and living below ones means as a path to freedom.
In high school we started talking about the difference between income and wealth and living below ones means as a path to freedom.
I own the next hot stock- VTSAX
Re: Teaching elementary school kids about money
We have done several things.
Started a savings account and match what they put in. Then they could only use a proportion of it each semester for expenses, based on 1/2 of the balance. Then after graduation they get the remainder. Also opened a brockerage account, helped them pick several stocks, and they get to keep the gains and earnings. This was in 2007 but the value has almost tripled. And last but not least the value of giving.
I liked telling stories, one (forgot where I saw it) is that if one cent was put in an account when Christopher Columbus discovered America, that earned 5%, compounded monthly (taking into account fractions), how much would it be worth today? Answer many billions. Also the story of Benjamin Franklin bequeathing the cities of Philadelphia and New York $1,000 each with the stipulation it had to be invested for small business loans and they could remove 1/2 in a hundred years and the rest after 200 years. Those ended up in the neighborhood of $20M.
Good luck, just keep on showing them the value of saving and avoiding excessive expenses. I hate to say Starbucks was one I couldn't talk them out off.
Started a savings account and match what they put in. Then they could only use a proportion of it each semester for expenses, based on 1/2 of the balance. Then after graduation they get the remainder. Also opened a brockerage account, helped them pick several stocks, and they get to keep the gains and earnings. This was in 2007 but the value has almost tripled. And last but not least the value of giving.
I liked telling stories, one (forgot where I saw it) is that if one cent was put in an account when Christopher Columbus discovered America, that earned 5%, compounded monthly (taking into account fractions), how much would it be worth today? Answer many billions. Also the story of Benjamin Franklin bequeathing the cities of Philadelphia and New York $1,000 each with the stipulation it had to be invested for small business loans and they could remove 1/2 in a hundred years and the rest after 200 years. Those ended up in the neighborhood of $20M.
Good luck, just keep on showing them the value of saving and avoiding excessive expenses. I hate to say Starbucks was one I couldn't talk them out off.
- PhysicianOnFIRE
- Posts: 470
- Joined: Fri Jan 08, 2016 2:46 pm
- Location: Up North
Re: Teaching elementary school kids about money
I haven't spent much time looking into it, but there's an animated series called Warren Buffett's Secret Millionaire's Club. Might be good for kids depending on their ages. My boys are 6 & 8.
We do the save / spend / give jars and have recently cleared out the spend and save jars, creating the Bank of Mom & Dad. We now track their balance on a spreadsheet and they get 1% interest every month, and I show them how much they got each month just by maintaining a balance with us.
-PoF
We do the save / spend / give jars and have recently cleared out the spend and save jars, creating the Bank of Mom & Dad. We now track their balance on a spreadsheet and they get 1% interest every month, and I show them how much they got each month just by maintaining a balance with us.
-PoF
-
- Posts: 706
- Joined: Thu Mar 06, 2014 9:43 pm
Re: Teaching elementary school kids about money
I first got interested in economics in the 6th grade by reading:
Life on Paradise Island: Economic Life on an Imaginary Island by William Wilson Harmon
Sadly out of print, but the author's son posted an ePub version (readable on iPad with iBooks) at the bottom of the following page:
https://sites.google.com/site/deconstru ... sland/home
Life on Paradise Island: Economic Life on an Imaginary Island by William Wilson Harmon
Sadly out of print, but the author's son posted an ePub version (readable on iPad with iBooks) at the bottom of the following page:
https://sites.google.com/site/deconstru ... sland/home
Re: Teaching elementary school kids about money
!!! I remember that book from when I was working as a student to set up a library for an education project. (The project developed reading material in a dozen or so Pacific languages, e.g., Palauan, Yapese, Kosraien.) I couldn't remember the title but have often thought of it as a wonderful intro to economics. I'll have to download it.ccieemeritus wrote: ↑Thu Dec 14, 2017 11:40 pm I first got interested in economics in the 6th grade by reading:
Life on Paradise Island: Economic Life on an Imaginary Island by William Wilson Harmon
Sadly out of print, but the author's son posted an ePub version (readable on iPad with iBooks) at the bottom of the following page:
https://sites.google.com/site/deconstru ... sland/home
Re: Teaching elementary school kids about money
The easiest way is visibility. That is, you need to show the child how to get the money that you need to work hard
Re: Teaching elementary school kids about money
Can I send you my kids' money?
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"