Middle schoolers are just beginning to learn financial responsibility. Money Confident Kids helps gives kids the knowledge they need to help build money confidence.
The first time my son started earning money was in middle school. He decided to run a lemonade stand, and I was so proud. I thought it would be a great opportunity for me to teach him about the basics of making smart financial decisions. I must admit, though; he was shocked when I told him he could keep the money he earned but would have to repay me for the supplies. It was then that I realized how little he understood about money. But, teaching this age group about finances; how to save, budget, and spend wisely, is no small task. We’ve put together a list of the most common misconceptions middle schoolers may have about money, along with five activities to help teach them how to make smarter financial decisions.
Myth #1: See it, like it, buy it
When students start to earn money, the next natural conversation to have is about smart spending. This is when we should start asking them to think about what kind of shoppers they want to be and how retailers might be marketing to them. One study found that 9 out of 10 shoppers make impulse purchases—that’s likely 10 out of 10 for middle schoolers! Setting goals is one way for students to resist impulse buys. SMART goals are even better ones!
Thought Shifting Activity: Money Magic. This online game is designed to teach the basic principles of making a budget and sticking to it. The main character Enzo represents the drive to buy for immediate gratification. The game teaches students to weigh what they want now with what they’re willing to earn enough money for in the future.
Myth #2: Items cost the same no matter where you buy them
Although money doesn’t define us, our middle school students can learn the valuable lesson that how we spend says a lot about us. Spending money in a deliberate way and resisting impulse shopping is the key to making smarter choices around money. Just because one store or website lists a product at a particular amount, doesn’t mean you can’t find it on sale elsewhere. Comparison shopping really helps students be money savvy and save money.
Thought Shifting Activity: Get It For Less. Many middle schoolers want a new phone or laptop for gaming or school. But not every electronics purchase is the same! Follow one student who first evaluates her needs vs. wants. She then discovers she can make her purchase at a discount. Take this learning a step further by having students analyze buying a new or used car.
Myth #3: You don’t need to worry about saving until you’re older
Saving money is one of the most difficult lessons to learn for everyone—middle schoolers and adults alike. But, saving enough money to buy that coveted item can bring incredible satisfaction. If we can teach our middle schoolers the concept of saving, we will have done a lot toward helping them become financially responsible adults. Note: It’s also important to teach them how the value of money can change and affect their purchasing power in the future. Inflation impacts their savings!
Thought Shifting Activity: Higher Education Cost. Many of our middle schoolers want to go to college, but do they know that prices continue to climb? This activity walks students through the cost of college as it has changed over the years and has them evaluate the potential cost of their ideal college when they are ready to graduate high school.
Myth #4: Credit cards = unlimited money
Although borrowing money has its place in money management, it can also lead to overextending yourself. But, not all debt is bad. We know we can build up credit or trust when we pay back our debts. This is a great time to help kids understand what borrowing is all about in order to prevent them from misusing credit in the future. Explain to students that when they see their parents using a credit card, the card doesn’t equal free money. The bill will come later, and if it’s not paid in full, they may actually have to pay more.
Thought Shifting Activity: Shopping with Interest. This free printable worksheet illustrates what happens when you use a credit card and don’t pay off the balance in full each month. The activity goes through a variety of scenarios on credit card debt and how much interest can cost you. Scenarios include things middle schoolers likely care about: video games, a TV, a new outfit or the total cost of prom.
Myth #5: There’s always more money coming.
Life happens. Jobs don’t last forever. So, once a student understands the concept of earning money and savings, the next lesson surrounds learning how to invest it. Making your money work for you is the best way to build wealth and ensure that you have continued income and a way to retire.
Thought Shifting Activity: Finding the Right Mix. This free activity discusses the two main questions about retirement. When do they want to retire, and how long will that money need to last? Starting to save now means retirement can come all the sooner! Take it a step further by discussing diversification. Students learn that putting all their money in one stock isn’t a good idea!
Lastly, it’s never too soon to start teaching kids about altruism. What topics are they passionate about and what organizations would they like to contribute to? After making the connection about what money means to them, the next step is teaching them the importance of contributing to their communities with time and/or money.
For more information on financial literacy in the classroom, check out these resources on how to build #MoneyConfidentKids.