Kidnexions Connection
February 2011
Greetings!

Welcome to the February edition of the Kidnexions Connection.  Our goal is to provide you with useful information about kids and money with an emphasis on making connections between what kids learn and their every day lives.

In This Issue
Teaching Kids Money
Teachable Money Moment
February Connection: Opportunity Cost
Teaching Kids Money 

piggy bankPreK-K Savings Goal:  We created a savings goal activity sheet for the young ones who are learning to recognize coins and their values.  It's a fun way to have them save while sneaking in a few lessons.  Check it out here.

 

 

America Saves WeekFeb 20 - 27 is America Saves Week.  Click here to find out ways you or your organization can participate.


Here's a recent Here's a recent Raised for Richness Facebook tip:

Find us on FacebookAn allowance can help your kids learn how to make decisions.
For more daily kids and money tips, join me on my Raised for Richness Facebook page.
 
Teachable Money Moment 
 
The best way to teach kids financial literacy is in the context of their everyday lives. Here's this month's teachable money moment:

Knowing and understanding money vocabulary is an important step towards financial literacy. 

"We're going to cut back on our expenses and cancel the magazine subscriptions we don't use."

"How much profit did you make on your lemonade stand?"

" No, we can't buy that this week because it's not in our budget."

And here's an old teacher trick to introducing kids to new vocabulary:  Say the same thing two different ways.  For example, you may say, "I'm going to put money into my savings account; I'm going to deposit my money."  You've linked what they can figure out - putting money into an account - with the money word that describes it - deposit.  No lengthy explanation.  And, at some point, you'll just use the money word.

When money vocabulary is used as a part of daily life, kids come to see money as simply something we do.

Here is a list of money words kids should be familiar with by the time they enter high school:
    • deposit/withdrawal
    • credit/debit
    • insurance
    • mortgage/rent
    • borrow/loan
    • income/expense
    • earn
    • budget
    • interest/compound interest/simple interest
    • save
    • opportunity cost

Check out this blog I wrote a while back about using money vocabulary.
February Connection: Opportunity Cost

Making decisions can be tough for kids.  Especially when they're confronted with two very appealing choices.  I can go to my friend's sleepover birthday party or attend the premiere to the new Harry Potter movie with my family.

 

If they choose to go to the sleepover, they'll be able to hang out with their friends and stay up late.  On the other hand, if they go to the movie, they'll be a part of an elite group that has insider scoop on the popular new flick.  The choice they do not pick is the opportunity cost of getting the other. 

 

As parents, we want to guide our kids to think through their choices without making the choice for them.  And as difficult as making these decisions can sometimes be, opportunity cost teaches our kids that they can't have everything they want and that life is full of trade-offs.  

 

The Money Connection:  Consider a child who has just received $5 in allowance.  He could spend the money now on hot wheels or he could put his money in his (KidsSave) account and earn interest on it.  Of course, the benefit of choosing the interest isn't as concrete as the benefit of choosing the hot wheels.  After all, waiting for interest to accrue is not as exciting as playing with a new set of hot wheels right now.

But if we can begin to get our kids to reflect on how the money choices they make today can ultimately benefit them later on, they'll be better prepared to take on some of the choices they'll be confronted with one day.  Things like, should I take advantage of my 401(k) plan? or should I set up a (Roth) IRA?

 

In addition, teaching our kids about opportunity cost helps underscore the difference between needs and wants (do you really need those hot wheels?) and can help reinforce delayed gratification. 

 

 

 

As always, we love hearing from you.  Feel free to contact us with comments and suggestions!

Wishing you continued success as you teach your children to be saving savvy and money smart.

John and Karyn Hodgens
Kidnexions co-founders 
 
The best way to predict the future is to create it.  - Unknown

Karyn Hodgens has a BA in Child Development, a Masters of Arts in Education with a Specialization in Elementary Mathematics, and a multiple subjects teaching credential.  Her passion is designing real-world lessons that resonate with kids and their interests.  Karyn is currently teaching kids how to prepare for their financial future in addition to writing about kids and money issues.    Contact Karyn at karyn@kidnexions.com

John Hodgens has a BS in Electrical Engineering.  He is currently a software engineer committed to designing software applications that help make teaching science and math concepts easier.   Contact John at john@kidnexions.com

LinkedIn:  Join our group Conversations about Kids and Money.
 
You are receiving this newsletter because you either signed up on our site, kidnexions.com, or checked your interest as you purchased one of our products.  If you choose not to receive any future newsletters, please click the unsubscribe link below.