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Nov 3, 2014
The subject of money management may be about as exciting to kids as taking out the trash, but on Monday, the subject was brought to life with a theatrical flair at Charles O. Stones Intermediate Center.
Portraying a variety of characters in a variety of humorous scenarios, Morgan Phelps and Skot Rieffer, actors with The National Theatre for Children, taught students four main rules for wise money management: budgeting; the difference between cash and credit; investing; and forming a savings habit.
“It’s kind of a way to sneakily teach them something,” Phelps said about the Mad about Money program. “It’s pretty fun, and the kids seem to like it.”
In their first skit, the duo played the parts of a father and son to help kids understand the importance of budgeting.
“The budget is a plan of how we spend the money,” said the father, played by Rieffer. “It tells us what we spent it on, and how much we spent on it. It has things like food and car insurance.”
“And house payments and insurance, blah, blah, blah, yes dad,” said the son, played by Phelps. “Can’t we have a little money left over for fun?”
After considering his son’s input, the father said they could start prioritizing their budget based on things they needed vs. things they wanted.
But the tables slowly started turning and the roles started reversing as the father started getting pie-eyed, thinking of outrageous things to add to the wants list, like a Learjet.
“Go to your room and don’t come out until you prove to me that you know the value of money, and you know how to budget your money wisely, and you’re not going to spend it on things like a Learjet!” the son told his father. “Parents these days.”
Students roared with laughter as they related to the skit, which Rieffer then recapped for them.
“You need to prioritize your needs and your wants,” Rieffer said. “In general, needs are ‘yes,’ wants are ‘maybe.’ Start out by making yourselves a list and put all the things you want and all the things you need on that list.”
In teaching the students about the difference between purchasing an item with cash and purchasing it with credit, the duo took suggestions from the students to incorporate into their skit involving a customer at a used car lot.
“What is a chore you hate doing?” Phelps asked the kids, to which they answered with a resounding, “Taking out the trash.”
This became the option that the car salesman, played by Phelps, used to persuade the customer, played by Rieffer, to purchase an automobile.
“Press the yellow button. An extendable arm will come out, grab your trash, take it out and dump it. Your mom will say good job,” the salesman said.
This option convinced Rieffer to purchase the car, until Phelps told him how much it would cost him.
“That will be $312.50 a month for the next 48 months,” Phelps said.
“That means that after four years, I’ll have paid $15,000 for an $11,000 car,” Rieffer said. “Why so much?”
“Well, we charge you a fee to use our money. That fee is called an interest rate,” Phelps said.
Rieffer summarized the lesson to the students by explaining the drawbacks of using credit to purchase things.
“By the time you guys are 21, more than a third of you will have your very own credit cards. With a credit card, you can buy things now, but you have to pay that price back plus interest if you don’t pay it off by the end of the month,” Rieffer told the kids. “We want you guys to understand the basics of how credit works so you can make wise decisions.”
The duo also taught students about the importance of investing their money.
“When you invest your money, the interest you make on that money compounds, or adds to itself, year after year, year after year,” Rieffer said. “It’s all about money making money. Compound interest can make a huge difference over long periods of time.”
Rieffer also encouraged the kids to save their money.
“If you start saving now, then the habit will probably stick with you the rest of your life. Now, I’m not saying that if you get $100 you have to put it all in the bank to save up for a car. But what I am saying is if you get $10, save $2 of it. If you get $5, save a buck,” he said. “Pay yourself first.”
The Mad About Money program is being performed again Tuesday at St. Dominic Catholic School, and the tour is also making stops at schools in Kansas, Oklahoma, Nebraska and Iowa.