I’m not an economist, but I play one at home.
Asking for new sneakers – is that a want or a need? Upset about the cost of concert tickets – consider supply and demand. Suggesting a sleepover – what’s the opportunity cost? More time to play video games – sounds like diminishing returns.
Far from the widget manufacturing examples I learned in college, economics is now the language of love I speak with our kids. We’ve even declared that “free” is a four letter word because something for nothing does not exist. We prefer contemplating tradeoffs and opportunity costs instead.
Really, it’s fun!
The subjects of economics and personal finance are included in most state standards, but vary by grade level and are not necessarily required to be implemented by districts. The 2016 Council for Economic Education’s biennial Survey of the States reveals, “There has been no improvement in economic education in recent years and slow growth in personal finance education.”
In the recent PWC report, “Bridging the Financial Literacy Gap: Empowering teachers to support the next generation,” 67 percent of educators believe financial education should begin in elementary school. Nearly the same amount of teachers, 65 percent, think it is somewhat unlikely that children are talking about financial literacy at home.
In our family, we talk about economics both early and often.
It all started three years ago when my husband asked if I wanted to attend a Detroit Economic Club luncheon with him. I’d heard of the speaker, Dr. Arthur Laffer, and knew it was my chance to right a 20-year wrong. When we were newly dating in a decade and a West coast city far away, he’d extended a similar invitation to hear Milton Friedman speak. I, regrettably, passed.
Dr. Laffer’s presentation provided redemption.
We were energized by the well-known economist’s upbeat personality and easy-to-understand examples, and I leaned over to my husband and whispered, “I wish the kids were here too.”
That night, our family dinnertime conversation revolved around Dr. Laffer’s presentation, the basic principles of scarcity, supply/demand and even the automotive bailout. We were surprised that the children, ages 10 and 12, easily understood the concepts and provided their own examples. Not necessarily keen on the kids’ suggestion that raking leaves in the backyard was an example of diminishing returns (no one can see back there anyway.), but we were excited about our new connection.
It was a yin and yang moment; there was economics and there was laughing.
To keep the conversation going, I searched for books we could read together that bridged the financial decisions we made as adults with choices the kids faced daily. There were books that encourage business and entrepreneurism and some that explore economic decision making but not one that combined the actual terms with everyday family scenarios.
An idea formed, a letter was written to Dr. Laffer and I held my breath. This Renaissance man’s perfect response opened with the lyrics to a Hank Williams’ song and closed with a Latin phrase – fitting from a man who worked with the great communicator. A grandfather to many as well as a great grandfather, Dr. Laffer agreed that kids were really smart, could easily understand the laws of supply and demand and apply economics to daily decision making.
Dr. Laffer and I would collaborate and Let’s Chat About Economics was well on its way.
Writing the book was fueled by our family interactions and the desire to replicate an economic connection for thousands of others. Its chapters are conversation starters, explaining real terms within everyday situations such as going to the grocery store and planning a family road trip and includes illustrated graphs to reinforce the concepts.
Before publishing, Let’s Chat About Economics was read to elementary and middle school students in and around Detroit. Children were eager to learn about economics and raise their hands to share how the terms applied to the choices they made every day – to sleep in or not, what to have for breakfast or to play outside instead of studying for a test.
During one presentation, a group of eager-to-learn girls in a large residential foster care facility took copious amounts of notes, provided insightful feedback and taught me more about scarcity than I could ever know.
Our children are a few years older now and the daily conversations have evolved from how to spend their time after school to which colleges they hope to attend. The choices are different, but economics remains the common thread. Our job as parents is to nurture and guide them as they make choices and develop into happy, healthy adults.
We can start chatting about economic decision making now or later, but be assured those conversations will happen.
We don’t know what paths our children will take but that is part of the blind excitement of their journey to test the waters. As is true of the Latin quote Dr. Laffer included in our initial correspondence – “hic sunt dracones” translated as “here be dragons” – each family is exploring new frontiers. Why not take economics along for the ride?
Photo by @southcrest411
Michelle Balconi is a writer and speaker focused on connecting kids and adults with economics. She worked with well-known economist Dr. Arthur Laffer on her first book, Let's Chat About Economics, to get the conversation going and empower kids' decisions. www.letschataboutecon.com