Are you “Financially” Smarter than a Fifth Grader?
If the economic downturn has left you feeling financially foolish, raising a money-smart kid might seem overwhelming. The parents of Mrs. Karen Jones’ fifth grade students can rest assured that their kids have been introduced to the principles of financial responsibility.
It won’t likely replace a lost nest egg, but it might save these parents the expense and frustration of a future bailout – the unexpected financial burden that so many parents face when their teen or twenty-something learns a money-lesson the hard way.
Mrs. Jones has been the branch manager of Discovery Bank for more than 15 years. Her bank doesn’t tout easy lending and low mortgages payments, but she does offer free savings accounts to all her fifth grade students.
Students initially earn a paycheck of 10 Discovery Bucks for being good students – for instance, completing their work on time and following classroom protocol.
Paychecks are distributed weekly and incremental raises are awarded at the beginning of each new trimester. Bonus Bucks can be earned for freelance gigs, such as being the first to follow directions or going above and beyond the ordinary behavioral expectations.
Students deposit Discovery Bucks into a personal account, and can use their earnings to buy an extra recess, a free-dress day, a pizza lunch, or the opportunity to be teacher for a day. But saving isn’t always easy. Unexpected expenses arise that can set back a student’s saving progress.
Ellie, an account holder at Discovery Bank and fifth grade student, explains that while fines and fees are avoidable they are also common. “For example, if someone leaves a mess or something on the floor overnight, they receive a maid service slip and have to write a check.” A similar fine is assessed, “if a person is being loud when the class is supposed to be quiet” says Ellie.
This week Mrs. Jones reminded students of the price for teacher-for-the-day and requested an early hand count of those with intentions to buy before the end of the school year. After the price was announced, Nat, another account holder, jestingly remarked, “Well, that leaves me totally out!”
Nat made a budgeting choice earlier in the year. He opted for a free-dress day and gambled that he would be able to earn enough for a second free-dress day before the school year was out.
When asked about his decision Nat affirms that he is happy with his choice, “two free-dress days is better for me,” says Nat, “than teaching class.”
Nat went on to explain that until a few years ago all his real money went towards toys, and it wasn’t until third grade that he decided to contribute to his college fund – a choice that he feels is consistent with what he is currently learning about budgeting.
Whether a student’s first introduction to financial responsibility is at home or in the classroom, there is no question that Mrs. Jones and Discovery Bank are helping to reinforce the principles of saving and prioritizing.
Jamie, another fifth grade student, summed up budgeting simply in saying, “If you want one thing, you have to decide and go for that, you can’t choose it all” – a good reality check for the millions of overextended adults.