Teaching school kids about money - what are the real life examples of math, budgeting, finance?
"I am a numbers guy, the math is great. Instead of ""jane was twice her son's age when he married, and is now 1.5 times his age....."" questions in math class, I think the math problems should mostly have dollar/pound signs in front of them.  In general, I like the idea of relating to the kids' situations as much as possible. When my daughter (14) makes a purchase, I'd ask her to be aware of how many hours she had to work to make the money she plans to spend. Was it worth 4 hours babysitting to buy an iPad case? Was it worth 2 to buy lunch that we could have made you at home?  (Note, the 'convert price to hours worked' is a concept that works great when teaching budgeting to anyone, not just kids.)  The math of tax and discounts for comparison shopping works great as well so long as they understand value. A $400 sweatshirt at 50% off isn't really a bargain, in my opinion.   Next, the math of balancing a checkbook should be high on the list. Accounting for the checks that didn't clear but are outstanding is beyond many people, amazing enough.  For the sport fan, there are unlimited math problem one can create for game scores, stats for the season, etc. Young boys who will fall asleep during a stats class will pay attention if instead of abstract numbers, you add 'goals' 'home runs' etc, after the numbers.  (Note - this question is probably outside the scope of the board, no right or wrong answer. But I love it as a question in general, and if not here, I hope it finds a good home.)" If these are children that may be employed, in a few years, it may well be worth walking them through some basics of the deductions around employment, some basic taxes, uses of banks, and give them enough of a basis in how the economy of the world works.  For example, if you get a job and get paid $10/hour, that may sound good but how much do various things eat at that so your take-home pay may be much lower?  While this does presume that the kids will get jobs somewhere along the way and have to deal with this, it is worth making this part of the education system on some level rather than shocking them otherwise. Rather than focusing on calculations, I'd be more tempted to consider various scenarios like how do you use a bank, what makes insurance worth having(Life, health, car, and any others may be worth teaching on some level), and how does the government and taxes fit into things. While I may be swinging more for the practical, it is worth considering if these kids will be away in college or university in a few years, how will they handle being away from the parents that may supply the money to meet all the financial needs? "My education on this topic at this age range was a little more free-form. We were given a weeklong project in the 6th grade, which I remember pretty clearly:  Fast forward 6 years (we were 12). You are about to be kicked out of   your parents' house with the clothes on your back, $1,000 cash in your   pocket, your high school diploma, and a ""best of luck"" from your   parents. That's it. Your mission is to not be homeless, starving and   still wearing only the clothes on your back in 3 months. To do this, you will find an apartment, a job (you must meet the qualifications fresh out of high school with only your diploma; no college, no experience), and a means of transportation. Then,   you'll build a budget that includes your rent, estimated utilities,   gasoline (calculated based on today's prices, best-guess fuel mileage of the car, and 250% of the best-guess one-way distance between home and job), food (complete nutrition is not a must, but 2000cal/day is), toiletries, clothing, and anything else you want or   need to spend your paycheck or nest egg on. Remember that the laundromat isn't free, and neither is buying the washer/dryer yourself. Remember most apartments aren't furnished but do have kitchen appliances, and you can't say you found anything on the side of the road. The end product of your work will be a narrative report of the first   month of your new life, a budget for the full 3 months, plus a ""continuing"" budget for a typical month thereafter to prove you're not just lasting out the 3 months, and all supporting   evidence for your numbers, from newspaper clippings to in-store   mailers (the Internet and e-commerce were just catching on at the time, Craigslist and eBay didn't exist yet, and not everyone had home Internet to begin with).  Extra Credit: Make your budget work with all applicable income and   sales taxes. Extra Extra Credit: Have more than your original $1000 in the bank at   the end of the 3 months, after the taxes in the Extra Credit. This is a pretty serious project for a 12-year-old. Not only were we looking through the classified ads and deciphering all the common abbreviations, we were were taking trips to the grocery store with shopping lists, the local Wal-Mart or Target, the mall, even Goodwill. Some students had photos of their local gas station's prices, to which someone pointed out that their new apartment would be on the other side of town where gas was more expensive (smart kid). Some students just couldn't make it work (usually the mistakes were to be expected of middle-class middle-schoolers, like finding a job babysitting and stretching that out full-time, only working one job, buying everything new from clothes to furniture, thinking you absolutely need convenience items you can do without, and/or trying to buy the same upscale car your dad takes to work), though most students were able to provide at least a plausible before-tax budget. A few made the extra credit work, which was a lot of extra credit, because not only were you filling out a 1040EZ for your estimated income taxes, you were also figuring FICA and Social Security taxes which even some adults don't know the rates for, and remember, no Internet. Given that the extra-extra credit required you to come out ahead after taxes (good luck), I can't remember that anyone got that far. The meta-lesson that we all learned? Life without a college education is rough."
"&gt;I hear lots of interesting stories about teaching. The most recent involves an experimental program where the teacher performance isn't graded on student outcomes but how well they're following the narrative defined by the program. Every few years teachers are handed new programs that the district curriculum people bought and told ""you're going to teach $subject using this program now!"" (sometimes those programs work better for different groups of students - the ones that it was evaluated with do great, the ones in different neighborhoods are failed by the program) The programs are implemented district wide and the teachers are told not to deviate from the programs.  Nothing really ""new"" there at all. And it isn't ""local control"" -- it is the opposite: standard ""central planning"", typically driven by Federal and State ""Department of Education"" bureaucrats in combination with Teacher's Union officials (but I am being redundant, because they are one and the same, there being a revolving door). And then it is pressed down on the school by an administrator who is attempting to please the ""higher ups"" (and/or to guarantee the flow of funds linked to said program) on one of their several ridiculously inane ""metrics"".  &gt;A recent example from the town I grew up in.  That letter is *hilariously SAD* (and not for the reasons that you think).  This ""teacher"" (with a Masters Degree (!!!!) in Reading -- from which I assume they believe they understand ""reading"" better than anyone  -- be interesting to know the last time this ""Master"" of reading actually READ a book that wasn't strictly required, the answer is probably a decade or more ago)...  This ""teacher"" is really just one central-planning disciple who is objecting to a *different* central planning program than the one they themselves were indoctrinated into.  The whole thing is very revealing regarding the sheer lunacy of the ""scientific educator"" and ""scientific education"" paradigm.  This teacher (like the administrators the teacher derides) is concerned about the WRONG things. There is really no concern about whether kids are learning how to read and to enjoy/utilize reading (which is a rudimentary skill kids can pick up on their own, provided they haven't had it turned into ""torture"" by some brainless curricula &amp; teacher).  But rather it is all about ""what [curricula] to use for reading/language arts"".  The phrasing of that question and the misguided emphasis of it reveals the fact that the teacher really doesn't have a CLUE how to truly get kids reading and understanding the English language.  Basically he/she just wants to ""work a program"" (by a semi-mindless *rote*) and is really only pissed because the programs keep being changed on them.   *Fortunately, a least a small part of the kids WILL learn to read (mostly due to authors/industry putting out things they are interested in -- all hail JK Rowling, JRR Tolkien, &amp; Suzanne Collins) not because of but* **despite** *the formal schooling systems attempts to ""teach"" them.*" I am quite sure you can set up an office in your basement for a lot less than $15,000. Don't build any walls, install any flooring, or upgrade the ceiling. Just install more lights and plugs. Set up your desks, bookshelves and what not in whatever corner is furthest from noises like the laundry room or the furnace. The kids and the nanny get the main floor - just let the whole living room be a giant playroom, for example. This gives you the separation you need to work at home, but you can hear if something really needs your attention.  When the kids go off to school, you can refinish the basement into a playroom for kids who don't always need supervision, using the money you are no longer spending on the nanny to install carpeting, real walls, a drop ceiling and so on. Your office stuff can move up to the main floor or to a spare room upstairs if you had one but it wasn't usable during the baby years when upstairs generally has to be quiet. As the kids get older the basement can get tailored to what preteens and teens like. This is essentially what we did, and our square footages and child counts match yours almost precisely. We did eventually convert our garage to carpeted and finished space, and it spent time as an office with staff coming in each day, then some time as a teen playroom (think video games and loud music) after the business rented office space outside the house, but if you don't intend to hire staff for your business you don't need to do this part. We did the majority of the basement wiring ourselves and got an electrician to hook it into the panel and check our work. The budget would probably be less than 10% of the guess from your real estate agent. &gt;We're supplementing their workers' food budgets and medical budgets. That is money that ought to be coming out of Walmart's pocket.  They are not forced to work there. It is really their choice. They also have the ability to supplement their own budgets by working more, or at another company. This is a choice, and the safety nets that the taxpayer subsidizes are supporting these choices, and are not a DIRECT support for Walmart. People have free will. If you can't understand this, then we may as well stop the argument right here.  &gt;Listen, everybody who doesn't come from money is forced to work. Unless you don't mind living outside without medical care, fresh food or family. If you happen to have poor access to education or failed to achieve for some reason then you're forced to take what you can get.  I grew up poor. Government housing, foodstamps, the works. I find it amusing that the majority of people who want to argue about this type of topic with me actually come from a much more well-off situation than me, and then want to make it sound like they know what they are talking about. I never blamed low paying companies for my situation. My parents could have and should have worked harder. And the same goes for many of my poor friends growing up. I see human beings as powerful, amazing things, not victims who are helpless to the whims of others.  &gt;If that job doesn't offer a living wage than you'll have to pick up a few extra shifts or another job altogether.  This is my point exactly!! It's just reality, folks. I'm in that situation myself right now, but I'm not blaming a business owner for trying to make money themselves. Sometimes you're given a shitty situation, life has dealt you a shitty hand, and you have to find your way out of it. It's hard, but sometimes that's life.  &gt;Let's talk about the one that you espouse where high school dropouts get to negotiate with corporations for a living wage and if it doesn't work out that's just fine -- after all nobody is forcing them to take a job.  I don't remember saying high school dropouts get to negotiate for a living wage. I'm pretty sure I said I support *legislation* that will *force* these corporations to pay a living wage. Please don't put words in my mouth.  &gt;People shouldn't have to work more than 40 hours a week just to put food on the table or pay their medical bills.  I agree. I think the government (subsidized by taxpayers, obviously) should provide 100% free medical care to it's citizens. This shouldn't be an issue about a company not paying enough to support an entire family. A greeter at Walmart was never supposed to be able to feed a family of five, sorry, and it's never been that way in the past. Some jobs are not meant to be high paying, and shouldn't be. But I do support universal healthcare, and at least a living wage (enough to support oneself in one's city). &gt; Vouchers pay the private schools what the public school would have received in the first place. The public school doesn't pay as much in taxes, and has a government supported administration that cuts waste at every chance. So the private schools collect all the voucher money, figure out they can't turn a profit, and go bankrupt. Sending all the kids they had enrolled back to the public schools or forcing another issuance of another voucher. Costing the school system double to triple for every kid that gets screwed that way. Which means the public school system doesn't have that money in their budget either, forcing further cuts.   I have never considered this before. I can see the issue with it. You've changed my view on vouchers being a good system.  &gt;Secondarily it also causes self segregation at the schools, because all the affluent parent can afford to drive their kids to another school, poor kids need a bus that's not covered by a voucher. So we end up with schools that are 90% black/hispanic with only 50% speaking english in a county that is 66% white. While around the corner is a 90% white school where only 5% speak spanish when over 25% of the population does. And that's just the racial demographics that are immediately obvious. The poverty levels are harder to get data on.  I don't consider this is necessarily a bad thing though. If schools are self segregated, it allows for teachers to teach in a certain way that is better for their demographic.   &gt;Either school security officer Bob on a power trip, or the delinquent in the hall, the problem is the same. Fearing for safety when there really shouldn't be a problem.  You don't get either of those at schools where there is almost no poverty. You will have the same problem in Canada if you move to a school district that has a significant amount of poverty.  &gt;And I get the feeling you don't live near a population center.  I don't live in a big city, but I live in a suburban area. "The real question is what can you NOT do!  If you track all your monetary actions, you know everything about your monetary situation.  That means you have the tools to ask and answer ""what if"" questions, such as: ""If I get a 10% raise, could I take longer vacations?""  You could calculate how much you spend per day on vacation and then consider the amount of your raise and how much of it you'd need to allocate to vacations to, say, be able to take a two-week vacation instead of a one-week vacation. ""How much more would I have to earn to move to this nicer apartment?""  This may seem like a simple question, but a surprising number of people can't answer it in a reliable way, because they don't have a clear understanding of how much money they make and how much of it they can afford to spend on housing.  If you find you have lots of spare income, maybe you can move to the nicer place right away; if not, at least you can get a sense of how much more money you'd need to make it happen. ""If I started taking the bus to work, how much would I save?""  You can look at how much you spend on gas and compare that to the price of a bus pass.  By separating out categories like gas, repairs, and car insurance, you can also calculate different scenarios, like if you still kept your car but only used it for occasional trips, versus if you sold the car and used only public transportation. ""If I want to take a trip to Tahiti, what can I cut back on to save the money?""  Using your table you can pencil out scenarios like ""Suppose I stop eating out for lunch at work and just bring my lunch, how long would I have to do that to save enough to pay for a plane ticket?"" These are just a few random examples.  The general idea is that with a record of hard numbers, you can start to consider potential tradeoffs in an objective way --- that is, you can ask ""how much in category X would I have to give up to gain this thing I want in category Y?"" The real trick in making use of your data is not so much ""what"" you can do, but ""how"" exactly to do it.  You may have to become more of a spreadsheet wizard to really delve into these questions.  Also, if you have programming expertise, you can even use something like Python to do calculations that might be laborious in a spreadsheet." "Here's some way of thinking about it, and I'm not really sure if it's completely correct, but sometimes we oversimplify when trying to tell a five year old :)  Say there are two people in the world. You and me. We both have $100. A total of $200 in the world.  Suddenly, a wild bank appears. I deposit my $100 in the bank. I still have $100 and you still have $100. Now you want to buy something from me that costs $150. You go to the bank to loan money. The bank has $100 available so gives you $50. You give me $150. Now I have $250 and you are $50 in debt. I deposit the $150 in the bank.  We do this again and again, until I have $1000 on my bank account, and you are $900 in debt. I want to buy a house of $500 and go to my bank, demanding to take out $500. But there is only $200 in the whole world so the bank can only give me $200.  ""Money"" has been created out of thin air, but it's actually you who are in debt. If you go bankrupt, the bank has a big debt it won't get back, and is in deep shit when I come around to demand my money back. At that point governments step in to loan the bank money for cheap, because if the bank fails, I will lose all my pension savings I put into that bank, as well as my companies and a lot of my employees.  And other banks loaned this bank money, so if this bank fails, the other banks will be in the exact same position and will also fail, because then they will also have debts that won't be paid back.  There are regulations minimizing this - i.e. a bank is required to keep a percentage of the amount of money on its accounts, so there's a maximum limit of ""money created""." Unlike other responses, I am also not good with money.  Actually, I understand personal finance well, but I'm not good at executing my financial life responsibly.  Part is avoiding tough news, part is laziness. There are tools that can help you be better with your money.  In the past, I used YNAB (You Need a Budget).  (I'm not affiliated, and I'm not saying this product is better than others for OP.)  Whether you use their software or not, their strategy works if you stick with it.  Each time you get paid, allocate every dollar to categories where your budget tells you they need to be, prioritizing expenses, then bills, then debt reduction, then wealth building.  As you spend money, mark it against those categories.  Reconcile them as you spend the money.  If you go over in one category (eating out for example), you have to take from another (entertainment).  There's no penalties for going over, but you have to take from another category to cover it.  So the trick to all of it is being honest with yourself, sticking to it, recording all expenditures, and keeping priorities straight.   I used it for three months.  Like many others, I saved enough the first month to pay the cost of the software.  I don't remember why I stopped using it, but I wish I had not.  I will start again soon. Did a little bit of digging, and found this article, from Staples High School in Westport, Connecticut.  Hopefully this will be a growing trend.  They say: A personal financial management class will now be offered at the beginning of the upcoming school year (2011-2012). According to the course catalogue, the focus of this course will be using mathematics as a tool in developing financial literacy skills. Topics covered in the course will include: earnings, banking, credit cards, loans, taxes, insurance, investing, loans, budgeting, and buying personal property. “In a perfect world, everyone would be required to take a personal finance course,” Principal John Dodig said.