Teaching Money to Kids

Money and Kids
Money and Kids

Kids need to learn about money while they are young, so that they can develop good habits of spending, saving, and investing.  Although not as useful as the Dangerous Child curriculum discussed more below, here is an overview of a useful mainstream curriculum for kids from the Consumer Financial Protection Bureau of the US government:

Here are 10 highlights per educational level from the CFPB guidelines.

In grade school

In elementary school, kids should be learning about the financial world beyond their own piggy bank. Yes, the basics of saving, spending, investing and borrowing, but also more advanced concepts like compound interest, budgets and insurance against financial risk.

Saving and investing:

1. The difference between saving and investing.

2. The concept of compound interest.


3. Possible sources of income (not including mom and dad), like salaries, benefits and interest rates.

4. Why more education can lead to more income.


5. You can’t buy everything you want. What goes into deciding to buy something?

6. How to count and use money.

7. What is a budget? And what goes into making one?

Borrowing and financial risk:

8. Borrowing allows you to buy things now and pay for them in the future.

9. Credit is when you use someone else’s money for a fee, and interest is the fee you pay to borrow money through credit.

10. Financial risk is an unavoidable part of life, and you can choose to protect yourself by avoiding risks or taking out insurance.

In middle school:

Now for the stock market. In middle school, kids should be learning that there’s a thing called Wall Street, and why it matters to them. Also, false advertising, and taxes.

Saving and investing:

1. How time, interest rates and inflation all affect the value of savings.

2. How to calculate interest, i.e. multiply the principal amount, the interest rate and the time of the loan or investment.

3. Financial assets you might want to invest in include stocks, bonds, mutual funds, real estate and commodities.


4. When buying things, look for information beyond advertising claims to make a decision.

5. A good budget should account for expenses, income, savings and taxes.

Borrowing and financial risk:

6. The benefits to using credit to finance long-term purchases last a long time, but the benefits to using credit to make daily purchases are short-lived and don’t add up over time.

7. What is an interest rate on a loan, an annual percentage rate, and why do rates fluctuate based on changes in the market?

8. How to avoid getting charged interest on credit card purchases.

9. What is a credit score, and why does it matter?

10. What is an insurance premium, and why do they vary?

In high school:

Preparing for the huge financial decision of college is paramount in high school, but kids should also be learning the basics needed to navigate life as an adult after college. High schoolers should also be learning about the economy, financial regulatory agencies and policies, and should be taught the value of developing a personal financial plan.

Saving and investing:

1. The possible benefits — and risks — of starting a business of your own.

2. Going to college is an important financial decision. Consider tuition and fees, and the future economic opportunities of a degree.

3. How taxes affect income.

4. Some adult things you’ll soon need to worry about saving for: a car, higher education and retirement.

5. The factors that go into calculating an investment’s end value: investment amount, time, rate of return, and frequency of compounding.

6. What do the government agencies (like the SEC, FDIC and CFPB) do, and why does it matter for your finances?

Borrowing and financial risk:

7. The important factors in financial aid for college: grants vs. loans, amount of loans necessary, loan forgiveness and repayment schedules, and expected future income.

8. How to compare the cost of credit from different financial institutions, how to use credit wisely, and the risks of excessive debt — including declaring bankruptcy.

9. How to protect yourself from identity theft.

10. The different types of insurance, from health to auto to disability, and how things like deductibles and copayments work.
___ http://www.marketwatch.com/story/what-your-child-should-know-about-money-by-grade-school-middle-school-and-high-school-2015-10-22

51 pp PDF providing more detailed information on the CFPB youth financial curriculum

While the above curriculum falls far short of the Dangerous Child curriculum on money handling and entrepreneurship, it is far better than what most children and youth receive on their journey through the dumbed down educational system.

One of the biggest mistakes of the above curriculum is the high school curriculum — which is based upon the flawed assumption that all youth should go to college. For the majority who would do better following a shorter route to financial independence, the assumption of universal college attendance is a huge mistake and disservice to the students who are shortchanged and wastefully diverted away from a more productive future.

Dangerous Children are taught how to start businesses based upon entrepreneurial skills and personal competence. They will master at least 3 pathways to financial independence by their 18th birthdays. This is in addition to the mastering of the financial and legal skills necessary to buy and sell automobiles, homes, and other relatively high value items.

From before the Dangerous Child’s birth, parents focus on assisting the child to developing multiple crucial competencies. As the child develops, skill-building that contributes to personal independence is emphasised.

Emotional independence is likewise stressed, although it is well understood that self-esteem generally arises from personal competence — not from touchy-feely self-love affirmations or indoctrination. The social component of emotional independence is not neglected, but is rather developed to a fine art — in a style fitted to the individual child and youth.

Early training on money: earning, saving, spending, and simple investing, is carried out in the form of games and practise markets. Play-acting is one of the most utilised and useful forms of early childhood instruction along with experiential self-discovery.

As for the dumbed down government school system, we can only hope that most school districts will choose to eliminate a good deal of current dysfunctional indoctrination, and substitute useful training such as basic money skills in its place.

Bonus Information from “Survival Mom” on Self- Employed Kids:

My own daughter was just six when she began her own business, “Jog Your Memory”. Her motto? “I remember so you don’t have to!” I had told her she had a great memory since she was constantly reminding me of things I had forgotten! So, we printed out a few business cards, I gave her a Day-Timer I wasn’t using, and off she went to see if Grandma might need some help remembering her appointments! A couple of years later we created a business plan for a neighborhood garbage can retrieval service! Lesson learned? There are no limits to the ways a person can earn money.

Encourage your children to think of their own natural gifts and interests. Seek out family friends and relatives with skills that could be taught to a young apprentice. If your child is a computer nerd, help them discover a money-making niche in the vast world of technology. If your kid is an artistic dreamer, as mine is, take their creations and help them develop a business plan for earning money. Don’t overlook volunteerism as a way to learn skills and establish important contacts as a route to self-employment. Combining a young person’s natural skills with a marketable skill or product may open up a whole new way for them to earn money other than working for the nearest fast-food joint.

Self-employment breeds self-confidence, independence and important business and people skills. Take any skill, any interest, put your creativity to work and develop an idea for a new business!

__ http://thesurvivalmom.com/unemployed-kids-vs-self-employed-kids/

Teaching Kids About Money at Every Age

Teaching Kids Finance and Entrepreneurship

Teaching Kids Business

Finding mentors

Parents can educate themselves to provide a more individualised curriculum for their own children than most any school can provide — if they take a bit of time to look.

If a youth is financially independent in multiple ways — and is a skilled entrepreneur to boot — he will feel more in control of his life than most young people currently do.

There is much more than this to being a Dangerous Child, of course. But early financial independence is one of the cornerstones of the training.

Early Childhood Learning Methods: Getting to the Dangerous Child

What is the Best Approach to Early Childhood Learning?

Three well-known European approaches to early learning include Montessori, Waldorf, and Reggio Emilia.

All three approaches view children as active authors of their own development, strongly influenced by natural, dynamic, self-righting forces within themselves, opening the way toward growth and learning.

… Underlying the three approaches are variant views of the nature of young children’s needs, interests, and modes of learning that lead to contrasts in the ways that teachers interact with children in the classroom, frame and structure learning experiences for children, and follow the children through observation/documentation.. __ Three European Approaches to Early Learning

The three approaches generally developed long before modern educational theory, pictured in the graphic below. As such, they are useful for their relatively pristine approaches, unpolluted by modern social science jargon.

Early Learning Theory https://thelifelonglearner.wordpress.com/2013/11/09/can-we-teach-creativity/
Early Learning Theory

Contemporary designers of approaches to early childhood education generally draw from some academic theory — such as those illustrated in the graphic above. This “sanctification” of early childhood curricula is unfortunate — not necessarily for what it includes, but for what it leaves out.

Consider Friedrich Frobel and the original “Kindergarten” concept:

Friedrich Fröbel’s great insight was to recognise the importance of the activity of the child in learning. He introduced the concept of “free work” (Freiarbeit) into pedagogy and established the “game” as the typical form that life took in childhood, and also the game’s educational worth. Activities in the first kindergarten included singing, dancing, gardening and self-directed play with the Froebel Gifts. Fröbel intended, with his Mutter- und Koselieder – a songbook that he published – to introduce the young child into the adult world. __ Wikipedia Friedrich Frobel

Frobel’s goal was to assist the early unfolding and development of the parts of the child’s mind that are necessary for further independent development. Contrast that pre-Prussian approach, with today’s fashion of indoctrination that pervades modern educational institutions from K – 12 thru university.

Or consider Edward de Bono and his approaches to creative thinking. Because “lateral thinking” and other creative thinking approaches encourage independent, divergent thinking, they are avoided by the dominant educational cultists of today, for fear that too much independence and creativity might lead to a loss of control by those in charge.

Learning Approaches http://www.learningandteaching.info/learning/
Learning Approaches

Those and other approaches to learning theory can be found at this website. But you will not find the ideas of John David Garcia or Arthur Robinson in conventional listings.

Modern education is all about conformity to groupthink and preparing children to sing in echo choirs, in unison. Modern parolees from official systems of incarcerated education are too often already under a lifetime’s burden of school loan debt, but at the same time suffering from an academic lobotomy and permanent lifelong adolescent incompetence, that makes ultimate freedom almost impossible.

Established orders and power hierarchies have little to fear from these zombie-drones, living in parental basements, their expectations squashed by the very system that was meant to empower them.

When children are very young, the possibilities seem endless. But the moment the parent hands control of the child’s mind to institutions whose only loyalty is to their own existence and enlargement, the child’s potential begins to shut down and collapse.

Dangerous Children master the abilities to live independently — financially, cognitively, emotionally, socially, educationally, and in many other ways — by the age of 18. That is how it should be, but not how it usually is, for most youth.

How Do You Get from Conventional Lifelong Incompetence to the Dangerous Child Who is in Control of His Future?

By beginning at the beginning, and not diverging from the exciting and unpredictable course in front of you.

The Dangerous Child Method takes the useful parts of the hard-earned experiential insights of Montessori, Steiner, Vygotsky, Doman, Piaget, etc., and combines them with the fundamentals of Garcia’s early curriculum, and Robinson’s hard-nosed approach to self-teaching and “mental junk food avoidance.”

A Dangerous Child follows a path that he sets for himself, but he builds his own path upon a foundation laid by many others, using tools chosen from what is provided by caregivers, coaches, mentors, and guides.

Conventional thinking in this area will only destroy a child’s potential, and make him into another statistic.

You may ask, “What can one child do?” And of course, it all depends upon the child. What could one Einstein do, or one Edison? What could one Leonardo, one Newton, or one Archimedes do? Mozart, Galileo, Darwin, Leibniz? More

More important than those individuals mentioned above, are the thousands who took their ideas and turned them into sciences, technologies, and advanced societies and civilisations.

You may think that all of that is in the past. In that, you would be mistaken. It is in the future. Choices you make now can help determine how that future unfolds.

Much more on this topic later.


Glenn Doman

Bottlenecks to Learning: Spoken Language

Serial vs. Parallel http://www.explainthatstuff.com/how-supercomputers-work.html
Serial vs. Parallel
This is the first mistake people make with small kids. They try to teach them by TALKING to them as if small children can simply reason along with their TALKING and automatically see the adult’s intent and adopt the adult’s logic. But even young adult brains do not learn so well by the TALKING method — much less small children!

Verbal language is processed in a relatively “serial,” straight-line manner. Visual information is processed in a highly parallel manner. Large amounts of information can be transferred in a short amount of time via parallel pathways. The image to the right illustrates the “serial bottleneck” that verbal language suffers from. Never forget that each word is slippery beyond belief, and each thought accompanying a word is both highly viscous and subject to total fragmentation.

A Picture is Worth a Thousand Words

In the learning pyramid below, we can see that humans retain far less from a lecture than they do from a demonstration. This is infinitely more true for toddlers and pre-schoolers than it is for university students — and it is true enough for them.

How People Learn
How People Learn

More on the “learning pyramid.”

For particular areas of special interest, many young children may be ready for self-directed learning practise by the age of 2 or 3, but most of the time — for most areas of learning — they will need careful guidance, with an emphasis on exploratory play, expanding movement skills, simple music appreciation and training, basic underpinnings of art, and creative story-telling.

Such young children are not ready for lectures, or even group discussions of any depth beyond a rudimentary analysis of characters in stories.

They need to be shown, encouraged, guided, and playfully cajoled, but always with a consistent end in mind. No lectures, no debates, no group discussions except in playful, creative mode.

Cognitive Pyramid of Learning
Cognitive Pyramid of Learning

The cognitive pyramid of learning by Williams and Schellenberger, demonstrates how academic learning depends upon a deep and broad set of nervous system functions. Most meaningful learning takes place automatically, well beneath the level of consciousness.

Many years of profound preparation are needed before children and youth will be able to easily and automatically adapt to the style of learning common to modern secondary schools and universities. Unfortunately, 90% of young students never receive the preparation they need, to achieve broad success and competency in the larger world beyond their parents’ homes.

Hierarchy of Skills https://en.wikipedia.org/wiki/Skill
Hierarchy of Skills

The hierarchy of useful skills by Kokcharov is a useful concept. But it is meant to be applied much earlier in child development than is done in many societies. A large number of “children” reach university without having acquired more than a sprinkling of basic knowledge — the bottom-most layer of the skills hierarchy! One hates to tell the young darlings and their parents that they are starting too late to achieve anything close to their best.

Keep in mind that where the term “knowledge” is used in the above pyramid, non-verbal knowledge will be key during the early years, and will serve as a foundation for later learning. An early mastery of many non-verbal skills will put the child at an early advantage in Dangerous Child training — particularly in areas of movement, art, basic mechanisms and forces, music, and the non-verbal aspects of language.

Very young children should be exposed to a wide range of situations where they must develop problem-solving skills. In fact, besides executive functions (including basic social skills), the love of difficult problem solving is at the top of vital childhood lessons to be learned.

Again, these vital early lessons are largely learned on a non-verbal level, by observing and by doing — and by creatively varying the basic approach.

Prism of Competence Clinical Medical Competence Used as an Example
Prism of Competence
Clinical Medical Competence Used as an Example

The image above illustrates development of competence in the field of clinical medicine, for medical students and doctors in training. Going from novice level to the level of mastery requires many years of training. By this time in a person’s education, he is expected to have mastered verbal knowledge acquisition, which involves a great deal of reading, testing — written and verbal — and little by little, practical hands-on skills training. The old saying in medical training is: “See one, do one, teach one.” And in basic terms, that is how medical and surgical skills propagate in training.

But a medical student, resident, or fellow will not reach his optimal levels of competence if he has not built a solid foundation of basic skills, competencies, executive functions, and a love for problem-solving, in his early years. These basic skills and competencies need to be mastered to the point of “conscious automaticity.” More on that seeming contradiction later.

OODA Loop John Boyd
OODA Loop Col. John Boyd

The OODA Loop pictured above was developed by USAF Col. John Boyd, several decades ago. It was used to help fighter pilots to gain the advantage in dogfights against enemy fighters. But over time, it has been seen to be useful in a much wider range of situations.

Here are the four steps:

  1. O…bserve
  2. O…rient
  3. D…ecide
  4. A…ct

It is called an “OODA Loop” because it should be running constantly, feeding back into itself at different points, as the situation changes.

But . . . humans should not have to wait until they train to be fighter pilots to learn this basic concept of moment to moment interaction with their environment. We have talked about “situational awareness” and “mindfulness,” but the OODA Loop gives tangible and actionable bones and structure to those verbal concepts, once it is mastered and applied to daily living.

How old do children need to be before they can learn the OODA Loop? If taught properly (nonverbally through play), children as young as 3 can learn to apply the OODA Loop automatically and unconsciously — long before they would be able to learn the concepts verbally. And to be sure, one never knows when his own life may balance on the ability of his child to act automatically with wisdom beyond his years.

More on OODA and John Boyd:

Human reaction time is defined as the time elapsing between the onset of a stimulus and the onset of a response to that stimulus. The O.O.D.A. Loop, which stands for Observe, Orient, Decide and Act, is Boyd’s way of explaining how we go through the process of reacting to stimulus. First we Observe, and keep in mind that although we process approximately 80% of the information we receive with our sense of sight, we can and do make observations with our other senses. For instance you might hear a gunshot and not see the person who fired it. Once you look and see the source of the gunfire you are now in the Orient stage of the process. In the Orient stage you are now focusing your attention on what you have just observed. The next step is the Decide step in which you have to make a decision on what to do about what you have just observed and focused your attention on. Finally you have made your decision and the last step is to Act upon that decision. Keep in mind that the O.O.D.A loop is what happens between the onset of a stimulus and the onset of a reaction to that stimulus.


The ideas are there, but the way it is presented above is not truly practical, in action. Going through the OODA Loop step by step in a conscious, “check-list” manner is a good way of getting yourself and others you care about, killed.

Ideally, Observe and Orient should be combined and Decide and Act fused together by practice, so the opponent’s action triggers your automatic reaction, without your needing to decide. Even below such a level of automatization, not having to think about your movements improves your reaction time because reaction time is shorter when set on “signal” than when set on “action.” (For example, if you are in a car stopped at a red light and you are thinking “green,” you will move faster than if you are thinking “green: press the gas pedal.”)


Intro to John Boyd’s Strategic Thinking

John Boyd Compendium

Strategy books by and about John Boyd

Strategic Theory of John Boyd 349 PDF free download by Frans Osinga

Thesis on Air Power Strategies of John Boyd and John Warden

Children will go much farther in life if they are provided with useful and productive strategies along with a broad range of skills, competencies, and real world experiential knowledge of how people, groups, and institutions behave.

The foundations for all of this are built of non-verbal material. Sure, one should always talk to the child on a child-appropriate level (each child is unique). But in the early years, non-verbal forms of communication are much more potent than any semantic meaning of the words themselves. Even the “non-verbal” aspects of language itself exercise far more influence on the young child than the word or phrase meanings: Tone and speed of speech, prosody, speech melody and inflection, as well as facial expressions and body language that accompany the speech.

Dangerous Children master at least 3 different ways of supporting themselves financially by the age of 18. But as we have said, that is the easy part — and only the beginning.