ABATTBQ11 said:AggieFrog said:If nothing else, have them create a spreadsheet and demonstrate the power of compound interest. For the vast majority of students, a personal finance class would be more valuable than just about any math or science class they could take (not saying it should replace them, but it will be more valuable long term).cmk10 said:
i think its just people that were never educated on it. Its insane that our schools dont teach some sort of classes on this from 5th grade and on...
It's one thing to say, but another to do. Teenagers and kids have no real concept of time. My 5 yo talks about tomorrow as if it's next week and next month like it's today. Teens and older kids are better at small scale time conceptualization (days, weeks, months) but they fail to grasp things on the order of years and decades. I know I sure as Hell did.
You can give them a spreadsheet and talk on compounding interest, but the implication will rarely sink in because they will struggle with the time scale. You're talking periods multiples longer than they've been alive.
They'll also struggle with the numeracy. As a teenager, $1000 was serious money. $10k was nearly unfathomable. I thought making $40k-$50k/yr was living it up (partially because I was poor). You're also going to be taking about what, to many, are unfathomable amounts of money.
When you're done, their takeaway is going to be that 40 years is forever and there's no way they'll reach $X million just saving a couple hundred every month.
This is all accurate. But In my experience, I learned from watching my parents. Not so much then talking. I knew my dad did well, but chose to drive a camery. I knew dad did well, but mom clipped coupons and my clothes were handmedowns. Etc. That somehow just became who I was.
Another important thing was teaching the value of a dollar regardless of order of magnitude. My folks made me work thru high school and when I turned 16, they would match whatever I saved from freshman/sophomore year to buy a truck. That was a fairly immediate goal and I saw minimum wage "wealth" grow over 1.5 years. I had 5k in my checking at 15 and my friends had to ask parents for money to go grab a burger. That led to interest in money and the discussions with dad about compound interest and 401k started from there.
Actions and forcing kids to understand the value of money are extremely imperative. Cause I agree, that just a talk about compound interest in high school probably would have just passed by me if my upbringing was different.
