http://www.teachermagazine.org/tm/articles/2008/02/23/08apsmartmoney_web.h19.html

Published: February 23, 2008

Students Learn Money Lessons

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Louise S. McGehee School fourth-grader Lizzie Stockmeyer is only 9, but she’s already tackled one of life’s most painful lessons: To spend money, one must make money.

“Everyone likes chocolate cookies, and most girls love purses, that’s why I am selling purses with cookies in them,” Lizzie said as she held up a hot pink, fuzzy-fabric purse that she made after ordering the pattern off the Internet.

Classmates clamored to get a look at her merchandise. “I sold 14 purses quick!” she said. “My friends like that for $5 you get two things, not just one.”

Each month, as part of a schoolwide program to promote financial literacy, third- through 12th-grade students at McGehee in New Orleans study the fundamentals of real-life economics.

McGehee Headmistress Eileen Powers assigned faculty member Carla Robertson the task of implementing a program, modeled after the Jump$tart Coalition for Personal Financial Literacy’s national standards, that would empower their students to make sound financial decisions in the future.

“I might buy some necklaces today or save my money,” Lizzie said as she eyed some Mardi Gras-inspired masks and jewelry made by her classmates. “We’ve learned that it’s nice to buy things, but thinking about how you earn and save is, like, more important.”

Teaching kids about money is nothing new. But McGehee’s administrators are hoping to take the concept further by incorporating tiered, progressive financial literacy lessons into traditional components of reading, writing and arithmetic.

Seven- to 8-year-old elementary students, for example, learn how to earn money and sell things at regular marketplaces they stage in their classrooms. Then, as pre-teen middle schoolers, they start to create their own business plans and think about such essentials as health and car insurance. Finally, as high school students, most of the young women will work on building a portfolio and investigating the careers that might afford them their desired adult lifestyles.

It is Powers’ hope that one day lessons about fixed- and variable-rate mortgages won’t be discussed only in an upper-level economics class, but also in a student’s math course. Already in elementary school levels, where students earn a weekly virtual paycheck, students must decide whether to have insurance premiums deducted from their paychecks.

If a student should opt not to take the deduction, a trip to the school nurse’s office can take on added meaning by costing them a week’s pay.

“By using such curriculum, we’re now able to drive home some very concrete issues on a level they seem to very easily understand,” said Powers, who is pleased by the enthusiasm both the faculty and students have shown for the programming. “For the most part, these issues are largely overlooked, but as a girls’ school, we want to make sure every girl who graduates from McGehee leaves knowing how to effectively manage their finances and feels completely comfortable in doing so.”

Powers said her father passed away when she was young, and she’ll never forget how her mother was at a loss to figure out the family’s financial situation. It is Powers’ mission to make sure the students under her charge are as educated about practical issues pertaining to money as they are on substance abuse and health issues affecting women. She selected Robertson to develop the school’s plan because Robertson and her husband have worked financial wonders within their own lives.

“We’ve done some things to get smart about money: paid off our house and car, built up our savings and tried to live a lifestyle where we make purchases based on how much of our energy might be spent on any one particular item,” Robertson said.

She often uses the example of buying a pair of shoes to illustrate to students that a $40 pair of shoes equals five hours of work if they’re making $8 an hour. “When you present things to yourself or others in such a way,” she said, “it really makes you think: Are the shoes really worth five hours of my life?”

In McGehee’s classrooms, the money lessons among grade-school students often center around earnings and financial decision-making. Though most fifth-graders tend to believe their parents are their only source of money, often paid via allowances, McGehee teachers try to instill in every student that no matter what their age they have the potential to generate their own income.

“These are things that as a kid I never knew,” Robertson said. “And some subjects, like making investments and plans for retirement, most adults I know have yet to figure out. What we try and teach the girls is they don’t have to save, save and never spend, but they do need to know how their decisions now can affect their future, and they don’t have to be afraid when it comes to any kind of financial decision.”

Debby Pigman, teacher of the upper school’s elective course in economics, doesn’t doubt her students will make smart money decisions. In her classes, students participate in the Stock Market Game and also use computer simulation models to see what career might afford them the opportunity to live and work in the city of their choice.

The students have become steadily more aggressive in their investment strategies, Pigman said, and began to think through their future plans with much more detail. With the help of regular visits from community members and local business operators, Pigman said the junior- and senior-level students have developed some strong ideas about what they want to do in the future.

Most of the girls dove eagerly into investing and wisely chose companies they often patronize, such as Apple, Gap, Polo and even McDonald’s. Routinely, the class links to company Web sites to track their stocks and report on losses or earnings.

The class discussions often turn to current events, Pigman said, as many of the students find their stock choices affected by recession fears.

“Their lessons come straight from the headlines on some days, as so much of what is being covered these days is about our economy and our future,” Pigman said. “The reality is the students that are sitting here today might not have Social Security or low interest rates, and, should that be the case, we want them to be prepared to handle it all.”