What Kids Say about Personal Finance

The kids of Mr. Charlie McAdoo's personal finance class at Renfroe Middle School in Decatur, Georgia, know what the overarching goal of the class is: "Save, save, save, save, save," says eighth-grader Addie. "Oh," she adds, "and save some more."

Of course, the class is a little broader than that. "By the end of the 12-week course," explains Mr. McAdoo, "the students should have a general idea of the impact of credit, spending, and saving."

So far in the 12-week term this class covers, the kids have learned budgeting and are starting to learn about credit scores. Sam, for example, describes credit scores like this: "It's like, if someone looks at your credit score, they'll know if you can be trusted with a loan." Matthew's take on credit scores: "Mr. McAdoo taught us when we get credit cards to not necessarily use them a lot, and with debit cards, make sure you have the money so you don't end up with a bad credit score."

Never a borrower nor a lender be
Over the course of the term, the students will create a 15-minute presentation on a financial problem teens may grapple with that they will deliver in the final week. Because Renfroe is an International Baccalaureate (IB) school, Mr. McAdoo is leading the students through the IB design cycle with the personal finance lessons. The cycle consists of five stages: investigate, design, plan, create, and evaluate. At week 6, they have already selected their problems and are in the "investigate" stage.

For his presentation, Dylan will focus on the perils of teens' lending money to friends. The main lesson of his presentation, says Dylan, will be "you shouldn't lend money to friends unless you know they'll pay you back. Friends may not pay ‘em back, but that's just because they're friends."

The focus of Dadi's presentation will take the other side of the borrowing/lending equation. Her lesson? Don't borrow money unless you can pay it back. "I used to borrow money a lot," says Dadi. "One time, my auntie needed it back and I didn't have the money to give her."

For her presentation, Brenna will create an iMovie to teach teens how to budget.

Life in the real world
Many of the students in the class say they are applying these lessons to their lives outside of school, not just in their classroom activities. Brenna, for example, is trying to save for a camera. So is Ainslie, who is learning to budget her allowance. Although her parents have taught her the ins and outs of budgeting, she says, "sometimes you're more open to a class than your parents." Matthew is dreaming big: he's saving babysitting money for a trip to Europe after high school. "Before Mr. Mac's class, I would just spend all my money straightaway," he explains. Now, he says, when he earns money, he spends half and saves half.

Dadi puts away $5 out of the $10 weekly allowance she gets. Her short-term savings goal is to build a rainy-day fund. She's thinking farther ahead, too. "I really want an old car when I turn 16," she says. If she saves half the funds, her parents have said they would put up the other half.

Alex says he used to blow all his money as soon as he got it. Now that he's learned a little more about saving, he's putting away about three-quarters of his allowance. Sam's parents manage a formal savings account for him. When he gets money, he figures out what he wants or needs and puts some money aside for that, then gives the rest to his parents to deposit in his account.

As any teacher or parent of young teens knows, it's hard to know if a kid is really taking in a lesson. But it seems that the students of Mr. McAdoo's finance class are grasping the importance of being in control of their finances.

By Nancy Condon, managing editor, Extra Credit
October 5, 2012