Let’s Turn Personal Financial Literacy Into A Fun Game
Posted on September 14, 2008
Two years ago, I wrote about how parents spend a great deal of time during their children’s formative years teaching them how to feed and dress themselves, potty training them, and becoming excited when they take their first steps and speak their first words. Then around age five, when the children enter kindergarten, many parents abdicate much of the teaching responsibility to school teachers and miss a golden opportunity to truly help their children. Sure, they may help with homework, encourage them to read and offer enticements for good grades, but they neglect this opportunity, when children can be molded like a piece of clay, to start teaching them personal financial literacy.Some parents and educators take the position that elementary age children are too young to learn about finances when many can’t even count. How can you teach them to handle money when they can’t even make change? Well, believe it or not, young children can learn and they can learn a lot. Granted their math skills may be lacking, but you can bet they know it takes money to buy things and without it they can’t.
The North Carolina Legislature has mandated that Personal Financial Literacy become a required element of high school instruction. That’s welcomed news, but as the curriculum is developed, my concern is that more emphasis will be placed on the process rather than the product. For the past two or three decades, we’ve been turning out financially illiterate graduates; ones who don’t understand the effects of credit, who can’t balance a checkbook or prepare a budget. It’s about time something is being done to correct this problem.
In 2006 I challenged parents to teach their children financial literacy since the schools weren’t doing it. Teaching the importance of saving and investing is extremely difficult and should not be relegated to a few hours as part of a high school civics course. The building blocks of financial literacy need to be laid in elementary school and added to throughout the years. It’s much easier to introduce a value system of patience and living within your means when children are still young and look up to adults, than to wait until they become teenagers and think they know it all. This is the time to teach them the value of saving for purchases rather than going in debt. Financial mistakes aren’t devastating at this early age like they can be later in life. Basic money management principles are not rocket science. They could not only become part of a school curriculum, they might even encourage a cooperative effort with parents.
In most households preschool children notice one or both parents going off to work each day and they may occasionally ask why Mommy or Daddy has to leave. This is a great opening to start teaching them about life. Parents could explain that adults have to go to work to make money so they can buy food, clothes, a home, etc. They could use this opportunity to help their children overcome the fear of starting school.
Children love to play games. Instead of the first day of school being a traumatic event, it could be turned into a fun and exciting game that could teach them about the game of life. I suggested that parents play what I called The Magic Money Game with their children. Imagine what could happen if a curriculum could be developed to introduce a variation of this game into our public schools.
Here’s how it could work. Test it first by funding a pilot program that would let children earn money for attending school. As part of the enrolment process, ask parents to encourage their children to look forward to school as the start of their first job; one which will let them go to work each day just like Mommy and Daddy. Pay them in coins at the end of each week. It could be quarters, half dollars or the new dollar coins. Pay them one coin for each day of attendance. At the end of the week, pay the child for their week’s “work” with a coin for each day they attended. Here’s where the learning really begins.
Provide each child with two clear containers so they can see what’s inside. Mark one “Savings” and the other “Toys.” Explain that each week they must put one coin in “Savings” and two in the “Toys” container. As much as possible, allow the children to decide what to do with any remaining money. Explain that the money in the “Savings” container will always be saved, but once enough money accumulates in the “Toys” container it can be used to buy something that may cost several dollars. As the coins in the in the “Toys” container gets closer and closer to being enough to buy something they really want, the children will experience the excitement and anticipation that comes with saving for big purchases. As they watch the coins in the “Savings” container keep growing, they will learn the value of long term saving. And finally, they will develop the confidence that comes with having “earned” money to buy new toys or other things they might want.
The possibilities with this game are endless. In the next couple of weeks, I will offer suggestions on how The Magic Money Game could be used to teach financial literacy all the way through high school. How coins could become bills, how bills could lead to bank accounts, and how the game can be used to teach the merits of good behavior, responsibility and effects of credit. Imagine a program that slowly teaches children personal financial literacy throughout their learning years rather some feel good attempt to do it in a few hours as part of a civics course. It’s time we stop sending young people into the workplace as financial illiterates.
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