How to Teach Economics to Children
American consumer debt was $2 trillion in 2003 according to Kim Khan of Money Central. This is an indication of how a misunderstanding of money and economics can create major financial problems. One way to prevent future generations from perpetuating the same financial behavior is to institute economic instruction on the elementary school level.
Instructions
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Explain what money is. Children need to understand that money is the tool that people use to buy items and to make more money. Allow the children to share their understanding of what money is and build on their understanding.
A good example is to ask the children a simple question. What is this used for? The children will share what coins and dollar currency are used for based on what they have seen their parents buy or what they have bought.
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Teach the children how to calculate the amount of money that they have. For example, provide a group of five students each with a nickel, dime, penny, quarter, one-dollar bill, and a five-dollar bill. Ask the children to count the amount of money that they have.
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Explain to the children how money is earned. For example, provide the children with a list of five chores that they might be asked to do at home and explain that some children earn an allowance for completing their chores.
Another example includes telling students that they can create products that people are willing to pay money for. Allow the students to list a few products that they can make that people may be willing to buy. Help the children place a value on the product that they want to create. Tell the children that they can earn money everytime someone buys their product.
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Teach the children the importance of saving money. For example, provide the children with 10 dollars each. Tell them they have to save a portion of the 10 dollars and they can spend the other portion.
Explain to the children that they will need to save a portion of everything that they receive so that they will have money during emergencies or to buy something else in the future.
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Explain the difference between needs and wants. For example, tell the students to write down basic needs and then basic wants. Share with the students the importance of buying their basic needs first before buying the things that they want.
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Provide the children with an opportunity to buy a product with the money that they received. For example, set up a makeshift store with a few products labeled with a price tag. Allow students to shop and bring all of their purchases to the front of the classroom. Tell students that they can only buy products if they have enough money. Allow the children to use a calculator to add all of their purchases together. Once they have a total, ask the children if they have enough money to purchase the items that they selected. Assist those who went over the amount that they have in money.
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References
- Photo Credit money, money, money image by easaab from Fotolia.com
