By Eric Braun and Sandy Donovan, coauthors of The Survival Guide for Money Smarts
According to the Council for Economic Education, four in ten millennials say they are overwhelmed with debt, and more than half are living paycheck to paycheck, unable to save for the future. A whopping 75 percent of college students who have a credit card are unaware of late payment charges.
Clearly, students are not getting sufficient financial literacy education in school. Personal finance education is critical for students of all ages—as early as primary grades—and the benefits extend into adulthood. Yet only 17 states require students to take a high school class in personal finance.
The good news is that progress is being made. In 1998, only 21 states included personal finance in their K–12 standards, but by 2015, the number of states had jumped to 45. Unfortunately, fewer than 20 percent of teachers say they feel prepared to teach personal finance topics.
But financial literacy can be easy and fun to teach. We have found that many kids are quite eager to learn about earning, saving, and donating. Start with a topic that tends to be inherently interesting to kids—being a savvy consumer. We know that companies want to separate us from our money. What can kids do to outsmart companies and make choices that are in their own best interests?
Here are six tips for being a smart consumer and a few discussion and writing prompts to get students thinking. (These can be used in a wide range of grades, but adjust them for your students’ grade level as you see fit.)
1. Be Thoughtful About What You Buy
When making a purchase, it pays to have a plan. Go to the store or website and buy the item you wanted. Avoid “impulse buys” and the temptation to buy a bigger or more expensive version of the item.
- Have you ever bought something you didn’t plan to purchase? Why did it happen? What could you do to prevent that from happening again?
- Tell about a time you or your family saved up to buy something big. Did you research the item? Did you read reviews or compare prices at different stores?
- Have you ever bought something and been disappointed with your purchase? If so, what made it disappointing?
2. Don’t Give In to Peer Pressure
Clothes, video games, devices—even snacks. Kids can feel a lot of pressure to buy the same things their friends do, and it can be hard when it feels like everyone has stuff you don’t. Be true to yourself. Don’t buy something just to fit in. Don’t change the way you act just to make others like you. Of course, that’s easier said than done. Try to remember: Trends come and go, but you will always be the same good person you are when a trend dies out. When you feel pressured, you can say, “I’m just not into that.”
- Name something that lots of kids have, do, or buy. It might be a video game your friends like to play or an app that everyone has. It might be a brand of shoes or a snack food lots of kids buy. Do you buy or have this thing? Why or why not? Make a list of reasons for and against buying it.
- Why is it so hard to resist peer pressure?
- What are some things you can say when someone pressures you to buy something?
3. Understand Advertising
The average American kid sees between 25,000 and 40,000 commercials per year. Ads are on TV; they pop up before YouTube videos; and they’re on websites, in mobile apps, in social media feeds, and embedded in video games. Remember these three tips about ads: (1) They only show the good times—you won’t see a kid struggling with a breakable part on a toy or the health detriments of those salty-hot cheese doodles. (2) Ads exaggerate the benefits—they make it seem like that new item is super fun, delicious, or otherwise awesome. (3) They often imply you’ll be popular—commercials show kids surrounded by adoring peers. Hey, we all want to be liked, and companies know this.
- Where have you seen ads or commercials in the last day or two? List as many places as you can. Think about the videos you watch, the games you play, the apps you use—even the signs you see.
- Watch an ad in class or at home and write or talk about how it might be focusing on the good and ignoring the bad aspects of the product; exaggerating the benefits of the product; and making it seem like the product will make you popular. What other tricks can you find that the commercial is using?
4. Give Yourself a Time-Out
It’s always a good idea to make yourself wait before making a big purchase. This is especially true if that big purchase is something you suddenly realize you just have to have. A lot of the time, we get caught up in the moment when we see something that looks really great. But if we wait a day or two, we often find that the really great thing is not worth the price to us. Another good reason to wait: Hot new products often go down in price after a while. A little patience can save you a lot of money.
- Have you ever made an “impulse buy”? This is when you see something (in the store or on a website) that you were not planning to get, but you decide in the moment to buy it. If so, what was the item? What made it seem so appealing in the moment? Or, maybe you have been tempted to make an impulse buy, but you resisted. Talk about how you made your decision.
5. Watch Your Online Spending
It’s so easy to spend money online! In-app purchases. Games for your phone. Music downloads. Movie rentals. We also buy lots of physical things online—things like clothes, books, sports equipment, games, and toys. Just click—and the money is gone. With electronic transactions, it almost doesn’t seem like we’re spending real money. Remember to apply all the previous tips to online spending. Be thoughtful and deliberate. Give yourself a time-out if you need to.
- What have you bought online? Where did the money to buy it come from?
- How do companies make it easy to spend money online?
6. Beware the Sneak-Attack Snack Attack
This form of impulse buy deserves its own separate category. Kids and adults alike love to buy sports drinks, sodas, chips, candy bars, gum, and more from vending machines. We stop at a convenience store for a fountain soda. At the movies, we pile up on way too much delicious grub to enjoy while watching the film. But convenience snacks are usually unhealthy and overpriced. The key here is to plan ahead. If you know you’re going to be hungry after school or thirsty after volleyball practice, pack a cereal bar or water bottle from home. If you’re going to the movies or the pool, skip the concession stand—or stick to the small size (you don’t need that much popcorn anyway!).
- Tell about when or where you are tempted to buy convenience snacks. How can you plan ahead to avoid spending too much money?
Important note: Being a smart consumer doesn’t mean you never buy anything or never have fun. The point is to be deliberate about spending. When kids choose to make a purchase, they should plan ahead, know exactly what they’re getting (and not getting), and find the best price. They should think about whether making the purchase is being true to themselves.
All this involves skills like goal setting and critical thinking. It also involves important social-emotional skills such as delaying gratification, being mindful, and building self-esteem, as well as character traits like integrity and responsibility. Whether financial literacy is mandated in your school district or not, it’s a great way to teach the whole child.
Eric Braun writes and edits books for readers of all ages, specializing in academic and social-emotional topics. Books he has worked on have won awards and honors, including the Eugene M. Emme Astronautical Literature Award, a Foreword Book of the Year Gold Award, a Benjamin Franklin Award, and many others. A recent McKnight Artist Fellow and an Aspen Summer Words scholar for his fiction, he earned an M.F.A. in creative writing from Minnesota State University, Mankato. He lives in Minneapolis with his wife and two sons.
Sandy Donovan has written nonfiction books for kids and young adults on topics including economics, history, science, and pop stars. She has worked as a journalist, a workforce policy analyst, and a website developer. She currently works for the U.S. Department of Labor, developing online tools to help people of all ages meet their career, education, and employment goals. She holds a bachelor’s degree in journalism and a master’s degree in labor and public policy. She lives in Minneapolis with her husband and two sons.
Eric and Sandy are coauthors of The Survival Guide for Money Smarts: Earn, Save, Spend, Give.
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