Compound interest is a big concept for children, but federal finance officials put it all into one bite-size word: pizza.
"If you spend $5 on a pizza slice and soda each week for 50 years, how much is that?" Gerald Dougherty asked several hundred children at Ridgecrest Elementary School in Cottonwood Heights on Friday. He is the associate director of the Financial Industry Regulatory Authority in Denver.
Hands shot into the air and guesses went wild. $250? $300? $1,500? The answer was $13,000.
And if you put $5 in the bank each week and collect 8 percent interest for 50 years? $160,000, Dougherty told the group.
Ridgecrest, in Canyons School District, was one of 18 schools nationwide chosen to welcome federal finance officials for a special assembly. The officials discussed saving money, the difference between wants and needs, making wise spending decisions and understanding how a bank works.
It's never too early to start learning about money, said Ken Israel, regional director of the U.S. Securities and Exchange Commission in Salt Lake City. "We want to give kids ideas on ways to earn money and what to do with it."
The finance officials gave each of the students a moon jar, a bank that has three compartments, to divide income for savings, charity and spending. The young financial students also received backpacks with goodies, including a workbook and playing cards with financial information.
"The students need to know if they don't work hard in school now and get a better job through better education, their lives will be really tough. There is a way you can have control of your life," said Ridgecrest principal Catherine Stoneman.
Israel said he believes the biggest challenge people have with money is spending it too fast.
Dougherty agreed, saying that many people need to avoid the urge to "buy things compulsively and then not have money for necessities. This is a lot of what we saw in the excesses of the economy over the past couple of years."
As a result of the recession, the Utah Legislature may be facing an $850 million deficit as it convenes for the 2010 session in January. If lawmakers asked Ridgecrest fourth-graders for advice, this is what they would get:
"If they could talk it out ..." said Connor Chytraus, 10.
Gabby Maxfield, 10, said Utah leaders should look higher for help: "Maybe they should try and talk to the national government — get money from there."
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