Help me make personal finance fun for middle schoolers.

May 14, 2009 11:22 AM

Help me make personal finance fun for middle schoolers.

This summer, I am teaching a group of disadvantaged middle schoolers about personal finance. I'm considering covering topics like saving, budgeting, investing, the stock market, and scholarships for college.

This is supposed to be an elective, not an academic class. What I'm teaching is "competing" with topics such as arts and crafts, theatre, and dance, so I have to make personal finance sound appealing and be fun.

So hive mind, do you have any resource or activity suggestions? I've looked at The Stock Market Game and it seems that it doesn't run during the summer. Games are good, but I'm teaching in a 55 minute block. Is there anything I'm forgetting that middle schoolers should know?

posted by oceano to work & money (14 comments total)

The only thing that made me interested in personal finances was making money and then having to learn to deal with it. Not sure how that helps, because you can't exactly give the kids some money, but maybe you could give them tokens or something and base part of their grade on how they handled them by the end of the class?

Just throwing out ideas here, this is why I'm not a teacher!
posted by InsanePenguin at 11:27 AM on May 14

You have to do a lesson on compound interest- show them what an advantage they have being young. It would also be worthwhile to do some lessons on the very high odds of gambling- some sort of visual on how many people who buy lottery tickets in one game actually win something.
posted by ThePinkSuperhero at 11:28 AM on May 14 [1 favorite]

I don't think it's a good idea to teach kids that young about the stock market. Why do they need to know about it? How will it affect their lives? What can they get out of playing The Stock Market Game?

If I were in a similar position, I'd do my best to emphasize the power of saving. This is something that is applicable to every student in the room, even now. But how to do this? I don't know.

One thing that has occurred to me in the past is to illustrate the concept of compound interest using M&Ms. This is also a way to highlight some behavioral finance lessons. Research shows that people (all people) are more likely to take a smaller amount now instead of receiving a larger amount later. That's a primary reason people don't save. But personal finance success is predicated on short-circuiting this natural tendency. But how to illustrate this?

Bring a metric butt-load of M&Ms. Offer students their choice: a few now, or more at the end of class. The "more" would be done through compounding. At regular intervals, you would pause your lesson and add the compounding to the stash for those who decided to wait. (And hopefully it's just a few or you'll need two metric butt-loads of M&Ms.) At the end of the class, you fork over the M&Ms to the "savers". (Actually, I guess the way to make this work is to give everybody M&Ms at the start, and then ask if there are any who are willing to "save".)

Not being a teacher, I have no idea how this little exercise would play out in the real world. But it's something I've thought about doing.

Again, from my experience with young people, they want money lessons that are applicable to them now. Teaching them about the stock market or how to write a check or the Federal Reserve just isn't going to hold their interest, and it will have no lasting effect. Your challenge is going to be to find something that engages them and allows them to apply the lessons to their actual lives.

But how to make this appealing and fun? That's a challenge. That's a real challenge. (And it's something that many people have been wrestling with for a long time. Hell, I'm being flown to Orlando by T. Rowe Price next week to see their take on making financial literacy "fun" for kids.)

Really, though, I think that the best way to make this fun and interesting to middle schoolers while also being instructive is to set up some sort of simulated economy. Let them earn "money". Let them spend it. Let them save it (and earn interest). Make it a game, but make it realistic. But seriously -- I'd leave the investing stuff out of it. Real-life personal finance isn't about investing. It's about spending less than you earn. The investing can only happen if you learn to do that first.

If you're set on including an investing component, check out Growing Money by Gail Karlitz. It's a fantastic book on the subject and it's aimed at this age group.
posted by jdroth at 11:47 AM on May 14 [2 favorites]

Oh I was going to suggest the Stock Market Game and then saw that you already did. I did this in my 7th grade social studies class and our team actually won an award for our state! You could set up your own version and just have students compete in groups against each other.

Similarly, you could do other simulations for the other topics. I don't know how long your summer session lasts, but maybe one different simulation each week? We seemed to do a lot of those in middle school, each lasting maybe a month, and they were always lots of fun.
posted by LolaGeek at 11:56 AM on May 14

Teach them about credit cards and interest. The fun part: have them virtuallly buy clothing/video games etc that are on sale (figuring out how much they are saving in the pretend clearance sale) and then show how putting those items on credit cards with 18% not only negates the percentage off, but increases the price by __ each month. I never understood/appreciated the concept of interest until someone showed me in black and white how it can turn a $15 cd into a $33 cd.
posted by 8dot3 at 12:13 PM on May 14

When I was in elementary school, we each had an index card taped to our desk. For good behavior, our teacher rewarded us by stamping coins onto our cards. For bad behavior, we had the coin stamps crossed out. Each Friday she had some kind of treats we could "buy" with the coins on our cards. Some treats required many week's worth of savings.

In 5th grade we did some with the stock market, but I remember being really confused and even to this day I couldn't tell you what we did, beyond looking at all of the stock numbers in the newspaper. In junior high, we learned how to write checks and balance our checkbooks. There was more... but I can't remember what else.

Apparently stamps of coins and buying popcorn was the best for me because it's the only one I remember with clarity.
posted by rhapsodie at 12:13 PM on May 14 [1 favorite]

Teaching them about the stock market or how to write a check or the Federal Reserve just isn't going to hold their interest, and it will have no lasting effect. Your challenge is going to be to find something that engages them and allows them to apply the lessons to their actual lives.

Or what jdroth said.
posted by rhapsodie at 12:14 PM on May 14

"I don't think it's a good idea to teach kids that young about the stock market. Why do they need to know about it? How will it affect their lives?"

Had I known in high school what I know today about the stock market, I'd be wealthy. If my grandparents knew anything at all about the stock market, they wouldn't have had to be on fixed income.

Since the stock market is intimately related to the world around them (see 2008 and the current recession/mass unemployment/rising foreclosures), I can't see why you wouldn't want children to know as much as possible about it. The above comment is like saying, "I don't think it's a good idea to teach kids about politics."
posted by coolguymichael at 12:16 PM on May 14

Although teaching the concepts of the stock market and and investing are important, I agree that the Stock Market Game is rather pointless. The vast majority of people should avoid the kinds of complicated trading and big risks that result in winning those kinds of games, and rather focus on investing long term and not worrying about short term gains.

The most fun games I can think of that teach actual personal finance concepts are the tower defence flash games that include earning interest on unspent money. They do a pretty good job of showing that the key to finance is spending as little as possible to do what you want and saving the rest, because the only way to get a high score is to use that strategy. In most other games the best strategy is to spend everything you have on items that help you win the game and keep little cash on hand, so those games are actually pretty rare in that respect.

As far as classroom stuff goes, when I was around that age we did a pretty fun activity where we created a budget in a realistic way. The idea was for everyone to think find jobs and apartments in the newspaper, and map out a realistic budget based on real-world costs. It did a good job of making things like rent, taxes, insurance, and car payments make more sense to kids that didn't have any experience with any of those things yet.
posted by burnmp3s at 12:30 PM on May 14

The time/money facts and compounding interest was the single most important thing I ever took away from personal finance. They will use it dealing with credit, and, something they can start now, savings. You can spend a whole day looking at just one dollar and how much it can be in 30 years under different scenarios.
posted by jmchrist at 12:38 PM on May 14

Is there a Junior Achievement office in your area? They have a couple of business/finance programs that involve classroom learning and culminate in a field trip where they use what they learned in a simulation. I just volunteered at the BizTown here and it was really neat.
posted by radioamy at 1:07 PM on May 14

Compound interest: how can they be a millionaire? How much must they save every month? for now many years? Play with the numbers.

Show them how many holidays they can take later if they save X% of their money from NOW RIGHT NOW! :)
posted by devnull at 1:45 PM on May 14

Maybe you could have each kid research a purchase he or she wants to make but won't have parental help for (e.g., an iPhone, a sports car). Then have them choose a credit card and calculate how much they will pay for each item if they charge it and pay it off in X amount of dollars for X months, depending on a budget based on their job or allowance (real or imagined). Then have them select a savings account (or even a mix of savings, CDs, and stocks if you want to get fancy) and help them determine how long it will take them to save for it by saving/investing X dollars a month for X months by factoring APY etc. I know I'm way more motivated to save when I have tangible goals that are relevant to me.

It would be cool if there was a website where this whole experience could be simulated, and kids could choose whether to charge or save and buy later, and compare their experiences with each other. Web designers, get on that!
posted by emilyd22222 at 3:23 PM on May 14

Following Devnull-

Compound interest and future value of money. An effective example for me at that age was to be asked, does a dollar for a candy bar seem a fair price? Yes? Okay, consider if you forgo the cost and invest instead, you may well wind up with two dollars. Does that still seem a fair price?

Yes, teach about the stock market. It's almost an insult to assume none of them will ever have a chance to participate, much less be even slightly interested. Show the criminal side as well, everyone loves a good scandal. Charles Kindleberger is a good source.

Would it be possible to start some sort of small business, a little more inviting than lemonade, to demonstrate the factors that go into running a business? And just how much serious enthusiasm you have to generate to get one going?

I'm pleased more than I can say that you're doing this, by the way, and am furious that the Ed biz doesn't think it worth making mandatory and during the school year. Knock 'em dead!
posted by IndigoJones at 6:48 AM on May 15