I want to teach children real skills that will help them for the rest of their lives. Being organized is one such skill. It can be cute to hear a kid describe his room or desk as a nuclear war zone, but in reality it’s a bad sign. Smarter people than I have observed that a person’s room is representative of his state of mind. A child who knows how to organize and balance his time is more likely to find happiness by doing things he enjoys—and he’s more likely to do them well. Learning to save money, balance a checkbook, and plan for future expenses takes organization. It’s essential for young people to see the importance of orderliness and how to get there.
To get things started, I give each student a ledger sheet on the first day of school. You can buy pads of such sheets for a few dollars at any office supply store. I teach the students to label the top of the sheet with date, transaction, deposit, debit, and balance. The class usually employs about four bankers, each of whom supervises the accounts of about eight students. Bankers receive extra ledger sheets and keep duplicate records of their customers’ transactions. In this way, if there is ever a discrepancy in the balance, the banker and customer can compare their ledgers to find the error. But the kids become so careful about keeping their financial records in order that this rarely happens.
Students have to pay rent each month to sit at their desks. However, if a child can save up triple his rent, he is allowed to purchase his seat and call it a condominium. Some kids even carefully save enough money to buy the seats of other students and charge them rent every month!
As the clever students buy up property, they begin to understand the value of ownership. Each month they see their peers scramble to pay the rent while their own bank accounts bulge. They begin to empathize with the plight of their parents. The property owners in Room 56 discover that owning their own homes leaves them with disposable income to spend on exciting treasures at the monthly auction. As the months fly by, they learn through firsthand experience the benefits of saving money and owning property. The students who continue to pay rent learn the same lessons—and probably with more poignancy.
The goal is not to create a real-life Monopoly game in the classroom, but rather to expose the students to the benefits of ownership. Not one student in Room 56 lives in a family-owned home; all of them come from families that pay rent. One day, I want each of them to own his or her own house.
If you’ve ever been on the road with your own children or a student group, you’ve probably noticed something: Kids are downright terrible with money. If they have five dollars in their pocket, they’ll spend it. They’ll buy anything. To paraphrase George Carlin, they’ll buy a left-nostril inhaler with the words New York City engraved on it. Kids return from trips with their pockets empty.
I want to teach my students the value of thrift. It’s not listed as a California State Standard, but being careful with money is a valuable lesson to learn.
Through economics, the kids learn both to be thrifty with their money and to value their belongings. When a student has to work to buy a book or calculator, he takes better care of it. Don’t get me wrong: I am not a materialist and am far from cheap. In Room 56 we use the best instruments, the most expensive baseball gloves, and art supplies that are, well, state of the art. We like good things, and because the kids have to work and sacrifice to earn them, they appreciate their belongings.
By participating in auctions at the end of the month, the students learn to spend their money wisely. There may be an item for sale that excites them. Perhaps it’s a complete set of The Chronicles of Narnia or a gift certificate to Barnes & Noble. Hands shoot into the air and the kids begin calling out offers. Often a student gets so caught up in the competition that he winds up emptying his bank account for an item he doesn’t really care about. When the excitement of the auction fades, he looks at his prize and asks himself, Was it worth it? This is a good question for our future consumers to ask themselves when they are young. Many students learn the hard way that it’s rarely a good idea to empty their bank accounts in highly emotional situations; something better might come up for sale just around the corner.
This system teaches kids to save. I see it when we are on the road. They do not buy very much. They are unimpressed with slick advertising or enticing displays. This is a virtue that serves them well in college and beyond. We all have to learn to live on a budget at some point, and it can’t hurt to start when we’re little kids.
By helping the kids learn to save money, the economic system teaches another important principle: delayed gratification. In our fast-food society, young people are encouraged to want everything and to want it now. But Room 56’s program teaches students that those who save money and spend prudently almost always wind up in better financial situations than those who spend recklessly in pursuit of immediate satisfaction.
Take a student like Amy. She didn’t make a fuss about it, but early in the year she decided to sit quietly and refrain from bidding in the auctions. She was the student who inconspicuously did extra work, joined every optional activity, and studied tirelessly to earn top grades. You guessed it: Partway through the year, Amy snapped up several pieces of property. She ended the school year with the most desirable auction items—all because she understood that the best things come to those who wait.
The kids in Room 56 take this lesson and apply it to their quest to be the first person in their family to attend college. In high school, while some students waste time and blow off studying, these kids apply themselves seriously. They have fun, but it’s balanced with an understanding that by working hard today they are opening a door to a much better tomorrow. They delay their gratification. They may not be the most popular kids in class, and they certainly aren’t the most visible—that is, until senior year. It’s amazing how people tend to notice the kids who get the scholarships to the top colleges. Recently, a former student named Linda e-mailed me about a “problem” she had—she was accepted by so many colleges she was having difficulty making a final decision. She remained humble, but confided to me that when peers marveled at her “luck,” she would think to herself that luck had very little to do with her good fortune—it was mostly hard work and perseverance.
To help young people become remarkable, we need to challenge them with lessons they will use for the rest of their lives. The Hobart Shakespearean economic system does just that. Last year I received a letter from Helen, a former student who attends Washington and Lee University in Virginia. During her third year of college, she chose to study abroad. She wrote me a letter and mentioned something that is a more accurate measure of classroom success than any standardized test. Living with other students in Japan, she remarked that all of her friends were having financial troubles and had desperately wired their parents for more money. Helen told me she was the only one in good shape. With her appreciation of thrift, sticking to a budget, and delaying gratification, Helen not only had enough money to survive, but planned to travel to other countries before returning to the States. And she was a poor kid. She thanked me and wrote that unlike the other students, she had a complete understanding of economic responsibility. She had learned it in the fifth grade.