Are You Smarter Than a Fifth Grader About Money?

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Are You Smarter Than a Fifth Grader About Money?

These elementary school students have a better understanding of personal finance than some adults.

Fifth graders at Potter Gray Elementary Cameron Huddleston

Recently, I volunteered to help with a 4-H “Dollars & Sense” program for fifth graders at my children’s public elementary school. The kids, including my daughter, were given $200 in play money to spend at 12 booths, including a candy booth, toy booth and pet booth. The only rule: The students had to spend at least some money at each booth. In short, it was an exercise in budgeting. The results were both enlightening and encouraging.

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I manned both the bank booth, which allowed the kids to put any leftover money they didn’t spend into savings, and the SOS booth, which offered assistance to those who spent too much and ran out of money before making it to all of the booths. I was impressed that only two out of about 75 fifth graders came to me for help. Almost all of the students put at least 10% of their $200 into savings. A few managed to set aside more than 50%. That certainly tops the personal savings rate of American adults, which is just 5.8% of disposable income, according to the U.S. Bureau of Economic Analysis.

It got me wondering how much these fifth graders really know about money. After all, the once-popular quiz show “Are You Smarter Than a Fifth Grader?”, which the Fox network is resurrecting in May, required adults to answer questions from elementary school textbooks. It proved there's a lot young kids know that grown-ups don’t (or at least don’t remember from their school days). So I met with the fifth graders at Potter Gray Elementary in Bowling Green, Ky., to find out if they understand the basics of personal finance – and, it turns out, they do. In fact, based on my experience, plenty of them seem to have a better grasp of what it takes to manage money responsibly than many adults.

Here’s what the fifth graders I spoke with know about money, which could serve as a refresher course for those of us well past elementary age.


You need a budget. A nationwide survey of adults by Wells Fargo found that 42% of respondents didn’t have a budget to manage their spending. However, 94% of the fifth graders in my informal survey said they knew what a budget was and agreed it was important to have one. As Bella says, “It’s a plan for how much you can spend. If you spend too much on things you want, you won’t have enough money for things you need.” Well put.

Several other students also mentioned that it was important to prioritize spending by focusing on what you have to buy first, such as food, before buying things that aren’t necessary, such as video games. Certainly, many adults struggle with budgeting. Perhaps it's because many think of a budget as a straitjacket that limits spending and takes the joy out of life. In reality, it can set you free. When you have a plan, know how much money you have and where it's going, you don't have to worry about it. Here is our guide to creating a budget and our favorite budgeting sites that can help you stay in control of your money.

Debt is dangerous. The hands of every single fifth grader I spoke to shot up when I asked whether they knew what a credit card was. A few were a little unsure how they worked, but several had a good understanding. “A credit card is like using a loan from the bank,” Paige says. And you have to pay more to the bank, adds Nathaniel. Yes, he and several others were aware that credit cards charge interest. The biggest problem with credit cards, as Cooper puts it, is that they might cause people to overspend. When you pay with cash, he says, you see how much you have and can only spend what’s in your hand. Whereas, with a credit card, you don’t actually see your money disappearing as you buy things.

Unfortunately, the numbers show that Americans are relying heavily on credit cards and other borrowing. The amount of consumer debt owed is a staggering $3.3 trillion, according to the Federal Reserve. That doesn’t even include mortgages – just credit card balances, auto loans, student loans and some other personal loans. It averages out to $17,205 per consumer, according to the Federal Reserve Bank of Kansas City. As fifth grader Lily wisely puts it, “Once you’re in debt, it’s hard to get out.” If you need help paying off what you owe, consider these proven tactics to overcoming debt.


You have to save. All of the fifth graders I spoke to agreed that it was important to save. Why? “You don’t want to spend everything you earn, because you won’t have money for emergencies,” Joseph says. “If you spend all your money on video games, you won’t have enough to pay for college,” Alex says. “It’s important to save so you have enough money so you won’t have to get a loan and go into debt,” Daniel says. All good reasons.

Yet, about one-fourth of Americans are not saving because they are spending all of their income, according to the 2015 America Saves survey. One-third of those surveyed said they don’t have sufficient emergency savings. And about half of those surveyed don’t have a savings plan with goals. As for the kids I surveyed, most said they have saved some of the money they’ve received – and that’s a good start. If you’re looking for ways to cut spending so you can save more, consider these five easy ways to save money fast and eliminate these common money-wasters.