Are You Smarter Than a Fifth Grader?

By now you should know that I am a personal finance advocate and love educating and talking on all things personal finance. So, when I got a call from my old diving coach, who is also a fifth grade teacher in my hometown, on giving a personal finance lesson to her summer school student’s I was more than happy to accept.

I shared with her during that call I was worried about presenting the material in a way that was relevant to a fifth grader and easily understood but was up for the challenge. I do my best to simplify personal finance topics here on my blog and was excited at the opportunity to distill some of those concepts even further.

The direction I was given was to cover how money can be used for spending, saving, investing and donating and to provide some overall smart money advice along the way. With that information, I started to create my lesson plan and build my presentation.

To get some inspiration, I talked with friends who teach a similar grade level to better understand what that age group is interested in in hope that I could make the presentation more exciting and relevant for them. I also spent some time thinking back to my earliest money lessons taught by my parents and how they introduced the concept of savings and investing to my brothers and me.

Pulling from what was modeled in my home growing up and my own research, I sat down excited to put together a two-part lesson on spending, savings, investing and donating fit for a (virtual) classroom of fifth graders. I really enjoyed the exercise of taking the most basic building blocks of personal finance and tweaking the delivery of the messaging for a new audience. I enjoyed it so much, that I want to share with you what I came-up with in hopes it helps you look at personal finance through a new lens or helps facilitate a conversation with a little one in your life.

Let’s Talk About Money

I kicked off the discussion around money (duh!) and where it comes from. In this particular class, the student’s experiences with earning money came from chores, grades or special events (birthdays, holidays, etc.). Prior to the lesson, I put together a survey to get a better sense of where their interests lie and where they spend their hard earned money. One of the first questions was where they spend their money and I was surprised by the answer. Some of the kids responded that they bought toys or crafts with their money but the majority of them just had it sitting in a wallet at home. This got me really excited to talk to them about other ways to use those funds like saving, investing and donating.


But not to get ahead of myself we started the lesson with spending as it was an interaction with money they were most familiar with. I was tipped off prior to the lesson that it’s common for these kids to ask for the “card” to buy things i.e. the parent’s credit card to make purchases. I used this intel to focus this part of the lesson on the difference between using cash to make purchases and using credit cards.

To bring the complex nature of credit cards to life, I shared with them the story of my first credit card. The story starts with shopping at Deer Park, goes onto a high credit card bill, the cliffhanger was that I didn’t have enough money in my bank account to cover the bill and the story promptly ends with my parents making me cut up the card after working to pay off my debts. Not a fun lesson to learn but it was impactful.

I emphasized the big difference between using cash and credit was that with cash, the action of paying for the purchase is instantaneous while using credit it’s a delayed repayment process that needs to be handled with care and is where I fell victim to using my first credit card.

I walked them through the transaction process and the troubles someone could potentially run into if they spend using cash and credit at the same time and don’t have a system to track their purchases. At the end of the day, the point I got across was to spend less than you make and to track all expenses to help stay on track. Moral of the story, the less you spend, the more money you have to put towards savings, investing and donating.


I struggled with how to best communicate the concept of saving money to fifth graders that they could relate to and landed on the following definition. Saving is assigning a purpose to your money and taking the time to prepare for that goal. The example I used was preparing for a big history test. The goal is to get a good grade and to do that, you have a decision to make on how to spend your time in the days leading up to the test. You can choose to hang out with friends, to play video games or study. In the case of test, the best result will come from making the decision to spend time studying to make sure you are prepared.

In true Financial Fashion Planner fashion (no pun intended), I brought it back to the importance of goal setting. Whenever there is a goal, financial or otherwise, you are going to be more successful if you write that goal down and take the necessary steps to prepare for that goal. In the case of financial goals, the preparation is saving money.

Continued on to discuss the timing element or certainty of a goal and that it should give them a clue to where the savings for that goal should live. One thing that I found very interesting from polling the kids was that most of them kept all their money in a wallet and the majority of the students didn’t have any plans to spend it.

I preach over and over again on my blog and when talking to clients, that for any goal that is less than two years away, the recommendation is to keep those funds in a bank account. In the case of these students, this money was in a wallet, so I encouraged them to explore opening a bank account with their parents or at least move those dollars into a piggy bank at home. In the case of goals that were longer than two years, examples we talked about were buying a car or money for college, that one option they have is opening an investment account.


I shared with the students, that at the highest-level investing is to put money towards something that has an expectation of getting even more money. I introduced the concept of stocks and bonds by relating it to a pizza order. In this example, stocks were peperoni pizza and bonds were sausage pizza and that how much stocks or bonds someone chooses to invest in is based on their preference. Some people like all pepperoni pizza, some investors like sausage pizza and some want to have a pizza with half and half.

I shared the story of the game my father set up for me and my brothers when we were younger to teach us about the stock market. At the time, each of us got to pick five stocks for our “accounts” and we tracked their progress every Saturday morning by looking up the current stock price in the paper. Oh boy how things have changed.

On a side note, I came in dead last. My dad suggested that we pick the names of companies we like so of course I pick my favorite places to shop. Unfortunately, The Limited and Abercrombie and Fitch didn’t do as well as Nike, Disney and the other stocks my brothers picked. Lesson learned, always be diversified!

Circling back to the concept of investment growth, we did some math together as a class to teach them the Rule of 72 . We used the hypothetical money they get from grandma and grandpa for every birthday and looked at two different scenarios assuming the one time investment of birthday money vs. investing birthday money every year. The kids were amazed by how much $50 could grow assuming a rate of return over time. In one of the examples, the money grew to be over $100,000. Oh the power of starting at a young age!


I loved that I was asked to speak on donating. I think it’s so important to teach kids at an early age that there are people in the world less fortunate than ourselves and important causes that need support and that one way to support is through donating. Working with charities and organizations to donate amplifies your donation by combining them with the other contributions for a greater impact. It reinforces the idea that together we can so little but together we can accomplish so much.

 I didn’t go into as much detail as this post but I did spend time discussing some other ways to give which include donating items, time and talents. The survey asked about giving and if they have donated in the past. The responses I got back were that they have donated to programs and causes with their families. I was so happy to see that the kids were and hope I gave them a few more ideas on how they can donate even if they don’t have a lot of money to give. 

Money Lessons

I ended the lesson with big picture money tips that helped to summarize our two day money discussion.

  1. Spending – the secret to wealth is living below your means. Spend less than you make. Ways to help pair down spending is to track everything and the use the 48 hour rule on purchases.
  2. Savings – Create good saving habits at a young age by always setting aside 10% of income. “Making money is easy. The difficult thing in life is not making it, it’s keep it” –
  3. Investing – Remember the power of the Rule of 72. Start investing early and often
  4. Donating – “Alone we can do so little; together we can do so much” – Hellen Keller

I am so grateful for the time I got to spend with this (virtual) class of fifth graders. They asked some great questions and seem inspired to take some of the lessons they learned and implement them in their lives.

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