Financial Literacy Month begins today. What better way to kick things off than with a story from the trenches? This is a guest post from Chett Daniel, who writes about improving your life through personal fitness and personal finance at

Every day when I go to work, I have a chance to influence the lives of children. I left a well-paying corporate job nearly two years ago, taking a 50% cut in pay to return to teaching. It’s not always hugs and apples, but overall I am happy with my decision to return to the classroom.

Within the education system, most states have incorporated standards that are woven into curriculum, dictating what students are taught in public schools. These state standards and curriculum are then tied directly to standardized tests. There is some latitude within education, but increasingly education is revolving around high-stakes standardized testing.

I am concerned with the focus on raising scores for math, science, and communication art; many other subjects that are critical for developing young minds will be marginalized more and more in the future. Fortunately Missouri is one of only three states that actually require a half credit of personal finance before a high school student graduates.

Economics for 4th graders
Recently I used some of the latitude I have in teaching social studies when completing a unit on economics with two 4th-grade classes (41 students total). One group of students was from my classroom; the other group of students was from a neighboring teacher’s class. During the unit, I had an opportunity to gauge the students’ knowledge of a few concepts of money and the financial world around them.

To begin the unit, I asked each of the students to answer seven questions on money, advertising, and lifestyle. The results were interesting, particularly their perceptions about “peervertising” (branding and marketing when influenced by peers).

Question 1: What is more important: to grow up to earn a lot of money, or to find a job that you enjoy?

  • 20 students responded “a lot of money”
  • 21 students responded “a job that I enjoy”

I should mention that 14 students from my class said they wanted a job that they enjoy, while only 7 said that they wanted a job that paid a lot of money. I talk a lot about doing well in school so that they can pick the job they want, where they will be happiest; I hope this has influenced their responses.

Question 2: Do you think owning more stuff will make you happier?

  • 12 students responded “no”
  • 20 students responded “a little bit”
  • 9 students responded “a lot” or “gotta have that stuff”

Although this question is related to the one above, most of the students recognized that owning stuff will not make them happier.

Question 3: How does advertising affect you?

  • 4 students responded “none”
  • 10 students responded “a little”
  • 11 students responded “a lot”
  • 16 students responded “give it to me now”

This question attempted to see the affects of advertising and peervertising on their desire to own products.

J.D.’s note: These results are a little surprising. It almost seems that the children have a more realistic attitude toward advertising than adults. Whenever I write about advertising at Get Rich Slowly, I have people write in to say, “Advertising doesn’t affect me.” Yeah, right.

Question 4: If your friend gets a new object how does this affect you?

  • 9 students responded “none”
  • 13 students responded “a little”
  • 11 students responded “a lot”
  • 8 students responded “give it to me now”

In responding to this question, the students were bold, saying that what others have affects them less than advertising. However, I question the responses to this question, because I see this played out every day in school.

For example, three weeks ago our school installed a pencil and note-pad machine. These machines dispense novelty pencils with holograms, or colorful graphics. I noticed the new machines as I walked in that morning and made a mental note to watch the pencil trend spread.

That same day, one of my students showed the class their new pencil. Within minutes, two students asked permission to go purchase pencils, and the next day five more students came to school with money for pencils.

I explained to the students that the new pencils were just regular pencils: for the cost of two of these pencils they could get a pack of eight at the local dollar store. They replied, “We want those pencils.”

I didn’t say any more, and let them purchase the pencils. So I find it interesting that most of the students didn’t believe owning more stuff would make them happier, but the majority of students allowed advertising and peervertising to convince them they needed stuff to be happy. (They really are little adults.)

Question 5: What are credit cards used for?
The answers to this question varied to the extent that I don’t believe most 9- and 10-year-olds understand the purpose of credit cards. I received a few responses that were, what I felt, accurate depending on the circumstances:

  • “To buy stuff if you don’t have the money.”
  • “To pay faster and for emergencies.”
  • “To charge things when you don’t have the money, so you can make a payment.”

Question 6: If you earned $500, how much would you save and how much would you spend?

  • 14 students would spend over 50%
  • 8 students would save half and spend half
  • 19 students would save over 50%

Among the 21 students in my class, opinions were divided nearly in thirds: seven said they would spend over 50%, six said they would spend 50% and save 50%, and seven said they would save over 50%.

Question 7: How much money do you expect to earn when you leave school (either high school or college)?
The median household income for the area in which I teach is about $33,000 per year. The students, on average, expected their income to be about $65,000. After mentioning the median income, I didn’t elaborate further to make the students see the connection between that number and their parents’ incomes.

One of the best things about this age group is they are not afraid to dream and set goals for themselves. One of the hardest things to accomplish is getting them to realize that to reach the goals they set for themselves, they will have to work hard to realize their dreams.

My agenda with this survey had two parts. First, I simply wanted to gain insight into the students’ concepts of money and its use in the world around them. Second, I wanted to open a discussion with the students about money and encourage them to start thinking about it.

One thing stood out clearly: kids listen when you talk to them about money. The students from my class gave responses that aligned with values about money and life that I had conveyed to them throughout the year. The problem is we’re not talking with them enough, at home or at school.

There are only a few states in the U.S. where teaching personal finance to students is required prior to graduation. The Jump$tart Coalition surveyed high school seniors on personal finance knowledge; they averaged a dismal 65%. Worse, only 50% of the students were aware of the financial costs of paying only the minimums on credit cards.

On my website, I discuss how personal finance has become the last taboo. We’ve only recently started requiring personal finance for students who are going out and entering the workforce and starting families. Yet, this information is incredibly important.

I encourage each of you who have children or are in a peer/mentor relationship with a young person to share what you have learned about money and life. Don’t preach to them and speak as a voice of authority. Instead, teach them. Talk with them about the mistakes you’ve made and the lessons you’ve learned. Find everyday examples to show how to handle money correctly. A young person with a good understanding of personal finance will be able to pave his or her own way in life.

J.D.’s note: Canadian financial guru Gail Vaz-Oxlade has posted a survey about kids and money this morning. If you’re in Canada, go help her out by answering the questions!

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