How to chat about Economics...to kids !

Special guest post this week on HootLoot!!! Our friend Michelle Balconi, co-author of  Let's Chat About Economics with Dr Arthur Laffer,  shows us some brilliant easy ways to approach fundamental Economics principles with kids.

Scarcity, Demand & Supply, Opportunity Cost are not necessarily difficult concepts if related to our everyday lives. 

You will discover how everything in the end comes down to CHOICE!  

Enjoy it, and please note that HootLoot is going to soon launch a Christmas contest where we will give away some free copies of this really useful book ! So....watch this space.

 

Add cheer to the holidays with economics!

by Michelle Balconi, co-author Let’s Chat About Economics, 

 

‘Tis the season for gathering with family and friends and creating warm memories. As our schedules become jam packed with celebrations, kids activities and endless to-do lists, we realise that much like finances, our time is a scarce resource.

In other words, a great time to chat about economics!

Economics constantly surrounds us; whether we are shopping for the holidays, planning a family trip or listening to the nightly news. Understand it or not, economics has a place in your life and that of your children.

 

It's all about choice!

It might help to think about economics less in terms of professors wearing bowties charting supply and demand and more in terms of CHOICES. That’s right, talking with your children about economics is really teaching them how to make choices that will serve them. In much the same way that adults decide how much to save and where to invest, children too can use economic principles to decide what to have for lunch and how to spend their time.

Economics is the study of the choices people make to be as happy as possible considering they can’t have everything at once. The possibilities here are endless for illustrating relevant examples to the kids. When a choice is made it shows that something was more important than the alternatives. Which would you prefer, watching a family movie together or going ice skating with friends? There is no right or wrong answer, but you believe one will make you happier.

Several basic economic principles appear on a daily basis and provide useful conversation starters with children. Here are a few tips to introduce these concepts to your children:

 

Scarcity

To demonstrate that there are finite or limited resources in the world, introduce the concept of scarcity to your children at the grocery store. Perhaps they have a favourite seasonal fruit, like strawberries or pineapples, and it is only available a few months a year. You can also talk about scarcity as you decide how to spend time after school and on weekends. The idea to communicate to children is that there is a fixed amount of resources to choose from and share with them choices you make in budgeting finances and planning for future spending. Follow up the observation by asking children if they can think of any examples of scarcity and how it affected a choice they made.

 

Supply and Demand

Children have a solid grasp of supply and demand even if they don’t recognize the terms right away. The Hunger Games trilogy and the latest video game release provide perfect opportunities to discuss how many items are made (supply) and how many people want to buy them (demand).

Reviewing your child’s holiday gift list also provides a look at supply and demand. Ask children to think of things in their room that are important to them and if those items are readily available or difficult to find based upon supply and demand – markers, stuffed animals and One Direction posters all have an economic story to tell.

 

Opportunity Cost


Children have not likely heard this term but will understand it quickly as the value of the option they did not choose. Bring children into the conversation by explaining your opportunity cost of spending today vs. saving for the future. Discussing how we spend our time can be an effective illustration of opportunity cost too. If a child decided to watch the season premiere of a favorite TV show but did not choose to prepare for a spelling test we know what the expected result might be.

The same works for sports – are you working on ball-shooting skills or battling the enemy on a video game? In each example, a lower test grade and unscored points in a sporting event may become the results. To make the examples a little more fun, have your children point out the opportunity costs of choosing where to go on an ideal vacation or choosing chocolate chip cookies over cheesecake at a bakery.

Just because economics is a measurable science and is taught at the highest levels of institutional learning doesn’t mean it is only useful to adults. Children can understand and apply this common sense approach to decision making with most opportunities in life whether you are discussing how to spend the holiday break or why the latest must-have electronic device costs so much.

Sharing the basic economic principles empowers children to make well-informed choices for their own happiness and may just add a little more meaning to your holiday season.

 
 

 

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