One of the few positives to come out this draining economic meltdown is that my kids are asking questions about saving and spending money—much more about spending than saving, but at least the questions are being raised. I guess the immense volume of noise about the financial crisis—from the TV to the schoolyard to our own table talk—has taken hold with even the smallest of us. For the most part, I think it’s a good thing.
A 10-year-old’s grasp of finances vs. a 5-year-old’s is like the difference between the Grand Canyon and the Trinity River. The 10-year-old asks about how much things cost and seems to genuinely care about spending too much of our money on frivolous stuff such as ice cream cones after dinner. The 5-year-old asks why 10 pennies are worth less than two dimes.
I remember the first dollar I earned outside of my allowance. Yes, this was a truly historic day. I spent the better part of eight hours snagging range balls that had flown the fence at a local golf range. Because I was only 11 at the time, I wasn’t technically old enough to work, so the owner allowed me to hit the balls I picked up. Not a bad gig for an aspiring Tom Watson. One day, he added a little bonus to our agreement: a single dollar bill.
Wow, that was big time back in the day. A dollar could buy you four Cokes. When I proudly showed off my first dollar earned to my dad, he thought it a good idea to put it in a frame. I would rather have bought several packs of Topps baseball cards, but Dad was a former U.S. Marine drill sergeant, so I chose the frame. That may have been the last time I did a good job saving money.
I think we all realize the need to improve our financial IQs. So it’s no surprise that financial literacy programs have sprouted up across the country for everyone from high school students to senior citizens. The problem: It might be a tad late by then. That’s why when I read about a Chicago-area school program for kindergarteners through 8th graders, I became an instant fan. At Ariel Community Academy (on Chicago’s Southside), the school has partnered with a local money-management firm and was entrusted with a $20,000 investment portfolio. By the eighth grade, kids are making decisions about how to buy and sell investments in the market. At the end of the school year, the class retains the original $20,000 for incoming students and then splits any additional earnings; one portion of the money goes toward a class gift and the other half is equally divided among class members. As many of us can relate, last year wasn’t a year of big profits, so Ariel’s 2009 eighth graders graduated to high school with less than their original $20,000. It’s not what they hoped for, but these kids got an important life lesson from a real-life experience.
Being financially smart doesn’t simply mean making money and saving it. Kids have to learn how to “just say no” to a new game for the DS, even when all of their buddies already have one. And this stuff just gets harder and harder as peer pressure revs its engine again and again.
I’m the first to admit my money-management strategies need some fine-tuning. Sure, we pay 100 percent of our credit card bill every month. Sure, we’ve been conservative with the investments. But we eat out way too often, I lease my car and we’re going to need to hustle to afford two Ivy League tuitions for a combined eight years. Wait, what am I saying? If UNT was good enough for me, it’s darn well good enough for my offspring! And lest I forget about the savings account we’ve set aside for the wedding of the century …. well, little angel, what are your thoughts about eloping to Vegas? There are several Benjamins in it for you.
