Kiplinger columnist Cameron Huddleston was happy to find that fifth graders she met earlier this year seem to have a better handle on personal finance that some adults she knows. In one exercise, students at the school her children attend had to divide $200 among 12 booths, including such fun spots as a candy booth and a toy booth. The rule was that they had to spend something at each booth but no one told them how much. Huddleston was stationed at the bank booth where students could save and at the SOS booth where she would help kids that overspent. She was pleased that few (two of about 75) students went to the SOS booth and that most students saved at least 10% of their money.
Huddleston later spoke with students at another elementary school and found that they had a sound basis for good financial planning. The children indicated they were aware of:
Budgeting/Priorities: Nearly all of the children recognized the need for a budget while a bank survey found that less than half of adults actually have one.
The need to avoid debt: The grade school children were aware of credit cards and demonstrated understanding of how they work.
The importance of saving: The students told Huddleston that saving is important because you may need money for emergencies, may want to save for college, and don’t want to take out unnecessary loans.
These young people certainly deserve to be applauded for their financial know-how and encouraged to continue along a prudent path but before we go too far in congratulating these fifth graders, remember they have limited experience. Without having really had jobs or having to manage a household budget, the children did quite well in the finance game at school. The difficult part is remembering these lessons when one has the responsibilities and the temptations of an adult.