We all know "Financial Literacy" is important, but how do you get kids excited to learn about it?  Yes, you guessed it, have them start a small business!  Real interest in finance happens a little at a time.  First, they need money, but not money someone else earned and gave to them.  Kids will be more "invested" in the experience when they earned the money themselves.  That money now represents the time it took to earn it.  The idea that with investing, that money can now earn money (with no additional work!) is the key concept.  Consider this situation... 

 

John joins TREP$.  He gets really into it and works many hours to create his products.  He sells out at the Marketplace and earns a net profit of $100.  His parents suggest he open a bank account to protect his money and see it grow.  The local bank does their part by offering a $10 incentive for new student accounts.  When the first statement comes he is excited to see he now has $110.12  It's all good until the following statement comes and he now has 110.27.  It is then that he realizes his money is barely growing in this situation.  He asks about the interest rate for savings accounts and learns that it is .5%  He asks if there's any other way to earn more on his money- and so the conversation continues into CD rates, the risk/rewards of the stock market, etc.  Talk about opening the door to teachable moments!

 

These financial lessons are more easily understood when we seize these opportunities to share parts of the "grown up world" with kids when they have a reason to be interested.  Happy Financial Literacy Month!