When should you start teaching kids about money? And how do you do it? I met a group of students this week at Crews Middle School, where they are already buying and selling stock, opening businesses and learning about credit. It’s all in fun — for now.
Here’s their story:
Rodney Smith operates two upstart companies — Fresh Prince Investments and Sports, Inc. When those ventures aren’t demanding his attention, he’s sweating over ways to earn back the thousands he has lost with MGM in stock market investments.
That’s enough to stress anyone out, let alone a 13-year-old.
It’s all in nine weeks’ worth of work in the Business and Computer Education class at Crews Middle School in Lawrenceville. While many adults are challenged in financial literacy, students in Rod Hames’ classes are learning about investing, saving, spending and building businesses.
Most would agree it’s far afield for eighth-graders. Even Mark DiGiovanni, a certified financial planner who visited the class during Georgia’s Financial Planning Week, spent no time talking about saving allowances — the more typical money-related topic for kids this age — and instead focused on prioritizing profits and customer service when growing a business.
“I get a lot of questions about what’s the value in teaching the stock market to kids when legally, they can’t even do anything,” Hames said. “When we were in school, it wasn’t relevant. But now, with credit being such a big deal, parents not saving money, the crisis we’re in, it all seems more relevant.”
Smith and his classmates, after getting a Crews brokers license, wrote letters to potential investors — also known as their parents — asking them to entrust them with $100,000. With that money, the students, competing for prizes at the end of the nine weeks, went to work for their clients.
Smith hasn’t fared well in the fantasy stock market and is now holding out hope that Google will reverse his misfortunes. Audrey Costello bought shares in Nike and Dell.
“They didn’t do to well,” she said. “In the beginning, I went into debt really fast. I think I’m going to go with Google and Cracker Barrel.”
Tanaz Ukani trusts names she recognizes: Amazon, Apple, Coach and Disney. She has had mixed results.
“Before this class, I didn’t know that much about this,” she said. “Now I do. I think it’s a good age to learn it. When you go to high school and college, you might need it.”
Some would argue buying and selling stock, for instance, is of less importance for a middle school student than understanding the value of money.
“So much of money management is tied to values,” said Michael Rupured, a financial management specialist with the University of Georgia Cooperative Extension. “It’s the parents’ job to start teaching their kids about money as soon as they start asking for it, because it is so value-laden. The school can supplement that with the mechanics, the how-tos.”
That is precisely what Hames does. Acknowledging that a good number of his students may not hear another word about the four Ps — product, placement, promotion and hiring people — until they are in college, he says he is laying a foundation that they can rely on later. Plus, he’s marrying technology and entrepreneurship: they make Web sites, design business cards, create online and print marketing plans and even make gift cards.
Maybe they’ll file away the importance of measuring risk and reward. They’ll understand the volatility of the stock market, grasp the dangers and benefits of credit and compound interest, learn saving mechanisms from certificates of deposit to savings accounts, or in the case of their individual business, embrace how critical it is to put customers first.
“Profit is not the cause; profit is the effect,” DiGiovanni said, as heads nodded in agreement. “If profit is the only thing that’s driving you, your success will be only for a short time. Find something you’re passionate about.”
That hit home with Costello, whose clothing business has “better quality, but is not as expensive as others.”
Smith, too, created a business in which he has a personal interest. He plays football and knows his team often needs equipment. So, he is developing Sports, Inc., which donates a portion of its profits from the sale of sports equipment to help youth recreational programs.
He considers himself a thoughtful risk-taker and thinks he wants to be an entrepreneur. Ukani, more conservative, wants the same. Both have parents who are business owners, and can learn — and teach — them what they’ve learned.
“I think people can have successful businesses if they put their effort into it,” she said.
Hames will give a presentation at the national conference for the Association of Career and Technical Educators next month in Nashville. He’ll tout the importance of teaching financial literacy to young people. In high schools, he said, the emphasis is on academic studies and little time is left for consumer economics electives. Parents, too, are often fearful or uncomfortable when it comes to money.
“These kids don’t get it anywhere else,” Hames said. “Teenagers have discretionary money. I can’t imagine why you wouldn’t talk to them about money since they are dealing with it anyway.”
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