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What Do Our Kids Know About Money? Thumbnail

What Do Our Kids Know About Money?

Families Get to know us

 Every single team member at Halpern Financial supports investor education to help people achieve their future financial goals…especially for their children!

The Halpern Financial family includes kids from toddlers to young adults. We asked each of them the same questions, and no surprise; it turns out they’re pretty financially savvy! Have fun reading what they said, and if you have kids at home right now, see how they would answer the questions. The CFPB also has some excellent resources to start family financial conversations at each age level.

What Do the Kids of Financial Professionals Know About Money?

Magnus is almost 2, and not quite old enough to think about money… although he can officially count to 3 and when you ask him how old he is, he says “big”. His favorite thing to watch is Robin Hood (the Disney movie, not the stock picking app—for now).

Camden (5)

  1. What is money? You work very hard to earn it. 
  2. Why do we need money? To buy stuff. 
  3. Why should you save money? So we can use it when we need it. 
  4. If I gave you $10, what would you do with it? Hmmm I don’t know what I should buy. 
  5. If I gave you $1000, what would you do with it? Buy a fence. 

 Zane and Max (6 and 8) put their heads together to come up with these.  

  1. What is money? What you buy things with
  2. Why do we need money? So we don’t be poor
  3. Why should you save money? So you don’t waste money
  4. If I gave you $10, what would you do with it? Put it in a piggy bank/buy a toy
  5. If I gave you $1000, what would you do with it? Buy lots of toys/put it in a piggy bank

 Lily (10) 

  1. What is money? A payment
  2. Why do we need money? For basic stuff like to buy a house, groceries, a car, insurance etc.
  3. Why should you save money? Well for me I want to be able to buy stuff and have money left over but for an adult you should save money because you need to have enough to be able to buy groceries and you should also save because if things went downhill you would want some money to live off of 
  4. If you gave me 10 dollars what would you do with it? I personally would save it to eventually buy a phone 
  5. If I gave you 1000 dollars what would you do with it? I would save some of it maybe 500 dollars and spend the other 500 dollars on something I want like upgrading my bedroom

 Reed (11):

  1. What is money? Money is an object that you can buy stuff with. 
  2. Why do we need money? To pay for the stuff we need like food, our house and water.
  3. Why should you save money? To have money later on - or to save up for a car, house or something that you really want.  
  4. If I gave you $10, what would you do with it? Save it
  5. If I gave you $1000, what would you do with it?  Save it in a bank account. 

 Reagan (13):

  1. What is money? Currency in one’s country. 
  2. Why do we need money? To afford things.
  3. Why should you save money?  So you can have it in the future. 
  4. If I gave you $10, what would you do with it?  Save it for something. 
  5. If I gave you $1000, what would you do with it?  Save it for college or a house in the future.  

 Khyle (14):

  1. What is money?  It is something you need to purchase or invest in.
  2. Why do we need money? To buy necessities.
  3. Why should you save money? You should save money to have more for bigger items that cost more and for the future.
  4. If I gave you $10, what would you do with it? Save until I need something important.
  5. If I gave you $1000, what would you do with it? Save and put half towards college.

Lauren (17):

  1. What is money? Money is a universal form of exchange in paper or coins.
  2. Why do we need money? We need money to make us happy.
  3. Why should you save money? I should save money to eventually make more.
  4. If I gave you $10, what would you do with it? If I received $10 I’d prob spend it on food.
  1. If I gave you $1000, what would you do with it? If I received $1000, I’d initially save it and then buy a new laptop for college.

Jack (17):

  1. What is money?  Money is a tangible or non-tangible form of currency to pay for expenses or to invest.  
  2. Why do we need money? We need money to pay for expenses such as taxes, rent, groceries, etc., as well as to pay for items that we may want such as a new computer or a new phone.
  3. Why should you save money? You should save money so that you can pay for more expensive items that you may want, such as to go on a trip. 
  4. If I gave you $10, what would you do with it? If I was given $10 I would most likely put it in my wallet and use it when I need it. 
  5. If I gave you $1000, what would you do with it? If I was given $1000 I would put most of it in a savings account and keep a small portion of it to spend. 

Dylan (18, and majoring in finance):

  1. What is money? Money is an asset that helps facilitate trade between two parties and can come in many different forms: paper, coin, virtual (cryptocurrency).
  2. Why do we need money? We need money to act as a consistent storage of value and to make the exchange between two parties as seamless as possible.  For example, I may want to purchase a wool sweater from you, but if you do not want the corn that I may produce, then money acts as the facilitator in our exchange.  
  3. Why should you save money? The notion of saving money is grand, but you should only save money conventionally (in a banking account) if the interest rate being earned on it is greater than the inflation rate.  Otherwise, you would actually be losing money based on the principle of the time value of money.  Some people perceive investing as saving, and often that is the better option.  Depending on a person's goals and appetite for risk saving/investing money will accumulate exponentially over time at different rates (a known assertion is the longer the time period that the money is invested, the greater the money will accumulate through compounding interest).
  4. If I gave you $10, what would you do with it? Depending on where I live and the opportunities available to me would affect my decision with that $10.  If I live in a major city then I could turn that $10 into a couple of cases of water and sell each bottle at $1.  If not, then I would most likely just spend it on food or some other expense.  I would like to say that I would invest it, but given that it is just $10 that is highly unlikely.
  5. If I gave you $1000, what would you do with it? With $1000 dollars, I would invest it in an index fund or mutual fund.  Doing the math, if I invested that $1000 today and did not add or take anything away from it, in 50 years (with an interest rate around 10%) my investment would be in the region of $100,000.  Based on the last 50 years cumulative inflation was around 600%, whereas this investment would have cumulative interest of around 10,000% -- a stark difference.

Ryan (21)

  1. What is money? Money is society’s reward for work, or services.
  2. Why do we need money? We need money because it is how we pay for services, or products. 
  3. Why should you save money? Money should be saved because it can provide a cushion when something unexpected happens in life. 
  4. If I gave you $10, what would you do with it? If I was given $10 I would probably buy some food with it because that’s the amount of a “free meal” 
  5. If I gave you $1000, what would you do with it? If I was given $1000 I would put it in a high yield savings account to let it grow because it’s money I did not earn, but was given. 

Soraya (22):

  1. What is money?  Medium of exchange that holds value 
  2. Why do we need money? Because it allows for an easier exchange of goods than straight trade
  3. Why should you save money? Because assuming it holds its value then the future value of money is greater than the present 
  4. If I gave you $10, what would you do with it? Probably keep it as spending money
  5. If I gave you $1000, what would you do with it? Invest it

Cayman (26):

  1. What is money? Medium of trade 
  2. Why do we need money? Need an objective standard for trade 
  3. Why should you save money? Compounding interest 
  4. If I gave you $10, what would you do with it? Spend it
  5. If I gave you $1000, what would you do with it? Pay rent

Tayler (30)

  1. What is money? Something you earn to pay the bills and work hard for to enjoy fun things! 
  2. Why do we need money? To give our pets the life they deserve... oh and pay the bills (rent, bar tabs, etc.) 
  3. Why should you save money? To get more dogs and a bigger yard to put them in! 
  4. If I gave you $10, what would you do with it? Head to Starbucks 
  5. If I gave you $1000, what would you do with it? Add it to my savings account!

 


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