Exploring Money Psychology with Students

“So why did we just do this?” I heard a student mutter to his neighbor.

When I responded, “that’s a good question,” this student’s eyes got big and a deep shade of red fell over his face. 

I believe it’s perfectly reasonable for a student (or employee sitting in a meeting) to question the rationale behind lessons and activities. And, frankly, any teacher (or boss) who cannot give a clear answer should rethink their planning.

Kids in a boring class — and adults in a boring meeting

After I told students they did not need to hand in their writing, I understand why a kid who has spent most of his educational life working to earn *points* didn’t immediately see value in a class activity that would not show up on his grade card. The activity in question was a “stream of consciousness” private writing about their perceptions of money.

Let’s be real–money isn’t just simple math. There’s so much emotion, baggage, and weight put into money. If budgeting was a simple exercise in addition and subtraction, we would not see so many people in debt. And since some studies show kids can grasp money basics by age 3 and establish money habits by age 7, it’s not too early to talk to kids about money.

I asked students to take time to think about their views on money–did money make them feel good? Bad? Ashamed? Proud? Anxious? Happy? Confused? I asked students to take time to think about what they learned–both directly and indirectly–about money from parents, friends, or the media. Was it something to be worshipped? Feared? Horded? Spent freely? Counted meticulously? Fought over?

By not collecting students’ writing, I encourage them to be honest with themselves. They will not face any judgement from me. We write this not for a grade, but for a starting point to realize how we attach feelings and importance to money. We put these worries, fears, and assumptions on paper so they are real and acknowledged. This is an important starting point when we identify the mental hurdles that prevent us from managing money effectively.

This exercise is one of several small things I do to address issues of “money psychology” and basic behavioral economics with students before we get to budgeting. Many of the economic concepts we discuss assume humans make rational decisions, but that is not always the case.

Economics Lesson Plan Ideas:

Here are some other activities and suggestions for talking about “money psychology” with students:

  1. Ask kids about their answers to a behavioral economics survey

Although this survey is older, it still presents an interesting question for students to address their beliefs about money. 

Where would you rather live, assuming prices are the same in both places:

A.  A place where you have an  income of $50,000, but the average person had an income of $25,000 

B.  A place where you have an income of $100,000 in a place where the average income was $200,000

This logical choice should be Option B, but 52% of subjects chose A. As one of my students who chose A put it, “It’s all about the flex.” 😂 The attitude that money is used to show your value or make you feel superior to others can be a barrier for students starting to establish positive money habits. (There’s an article about this study here)

  1. Have kids explore their “Money Personality”

Nerdwallet has a quiz to help people characterize their beliefs about money. This quiz scores you for the four types: Money Avoidance, Money Worship, Money Status, and Money Vigilance.

  1. Read Emily Guy Birkin’s End Financial Stress Now

This book explained some of the basic psychological barriers to saving and spending money effectively. After learning about concepts like scarcity mentality, tunneling, hedonic adaptation, I felt much more comfortable discussing these ideas with my students and found myself consistently referencing this book in class.

Bonus: This post from the Financial Mechanic also provides a wonderful introduction to some of these terms.

A little disclaimer for teachers: Be prepared to discuss your money views with students. Students are naturally curious about their teachers so sharing my experiences (read: mistakes) with money–often with a healthy dose of self-deprecating humor–helps me connect with them.

And exploring these questions and activities can benefit anyone struggling with managing money in a productive way. An important first step in developing a positive relationship with money is identifying and addressing any underlying beliefs that may be holding you back.

What shapes your money psychology?


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