The first time my son started making money was in middle school. He decided to run a lemonade stand and I was so proud. I thought it would be a great opportunity for me to teach him the basics of making smart financial decisions. I have to admit though; he was shocked when I told him he could keep the money he had made but had to pay me back the supplies. It was then that I realized how little he knew about money. But teaching this age group about finance; How to save, budget, and spend wisely is not an easy task. We’ve compiled a list of the most common middle school misconceptions about money, along with five activities to help them make smarter financial decisions.
Myth # 1: see, like, buy
When students start making money, the next natural conversation is about smart spending. At this point, we should ask them to think about what type of buyers they would like to be and how retailers might approach them. One study found that 9 out of 10 buyers make impulse purchases – that’s probably 10 out of 10 for middle school students! Goal setting is one way for students to resist impulse buying. SMART goals are even better!
Mind changing activity: Money magic. This online game is designed to teach the basic principles, create a budget, and stick to it. The main character Enzo represents the urge to shop for instant gratification. The game teaches students to weigh what they want now and what they are willing to make enough money for in the future.
Myth # 2: Items cost the same no matter where you buy them
Although money doesn’t define us, our middle school students can learn the valuable lesson that tells a lot about how we spend. Spending money consciously and resisting impulse buying is key to making smarter decisions about money. Just because a store or website lists a product in a certain amount doesn’t mean you won’t find it on sale elsewhere. Comparative purchases really help students be money conscious and save money.
Mind changing activity: Get it for less. Many middle school students want a new phone or laptop for gaming or school. But not every electronics purchase is created equal! Follow a student who first assesses her needs and wants. Then she discovers that she can make her purchase at a discount. Go a step further by having students analyze the purchase of a new or used car.
Myth # 3: You don’t have to worry about saving until you get older
Saving money is one of the toughest lessons for everyone – middle school students and adults alike. But saving enough money to purchase this much sought-after item can bring incredible satisfaction. If we can teach our middle school students the concept of saving, we have done a lot to help them become financially responsible adults. Note: It is also important to teach them how the value of money can change and affect their purchasing power in the future. Inflation is affecting your savings!
Mind changing activity: Higher education costs. A lot of our middle school students want to go to college, but do they know prices keep going up? This activity walks students through college costs, which have changed over the years, and lets them evaluate the potential cost of their ideal college when they’re ready to graduate from high school.
Myth # 4: Credit Cards = Unlimited Money
Borrowing money has its place in money management, but it can also lead to overwhelming yourself. But not all debts are bad. We know we can build credit or trust as we repay our debts. This is a great time to help kids understand what borrowing is all about to prevent them from abusing credit in the future. Explain to the students that when they see their parents using a credit card, the card does not equal free money. The bill comes later, and if it’s not paid in full, you may actually have to pay more.
Mind changing activity: Shopping with interest. This free printable worksheet shows what happens when you use a credit card and don’t pay the balance in full every month. The activity goes through a variety of scenarios related to credit card debt and how much interest it can cost you. Scenarios include things that middle school students are likely to care about: video games, a TV, a new outfit, or the total cost of the prom.
Myth # 5: There is always more money coming.
Life happens. Jobs don’t last forever. So, once a student understands the concept of making money and saving, the next lesson is about learning how to invest it. Making your money work for you is the best way to build wealth and make sure you have a steady income and a path to retire.
Mind changing activity: Find the right mix. This free activity discusses the top two questions about retirement. When do you want to retire and how long will the money last? If you start saving now, retirement can come even sooner! Take it a step further by talking about diversification. Students learn that putting all of their money into one stock is not a good idea!
After all, it’s never too early to teach children altruism. Which topics excite you and which organizations would you like to contribute to? After they have made the connection about what money means to them, the next step is to teach them the importance of contributing time and / or money to their communities.
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