Experts Talk Kids and Money


Karen Gross is a multi-talented academic, communications and education expert who has authored a variety of books including the children’s series titled Lady Lucy’s Quest!

Karen currently serves as a Senior Counsel to Finn Partners Company based in Washington D.C. She speaks, writes, advises and consults on student success, improving educational leadership and handling educational crises, as well as consumer finance, student indebtedness and financing higher education.

Formerly, Karen was President of Southern Vermont College, a Senior Policy Advisor to the U.S. Department of Education and a tenured law professor for more than two decades. She also ran a small educational non-profit in New York City on financial empowerment that, in addition to conducting research, trained trainers to work to help underserved communities deal with money issues.

Karen has dedicated and invested a significant portion of her life to improving the lives of those less privileged. She has a keen interest in sports and was on the NCAA Division 3 President’s Advisory Group and continues to advocate for improving collegiate athletics.

Gross was raised in New England. She is a cum laude graduate of the prestigious Smith College in Northampton, Massachusetts, that produced many notable graduates. Notable graduates include Gloria Steinem, the late Barbara Bush, Julia Child, Yolanda King and Penny Chenery, owner of 1973 Triple Crown winner Secretariat.

So, it has been both a great honor and pleasure to have Karen share her childhood memories and current insights on kids and money.

Part II. Questions and Answers


Sam X Renick: What is the most important money habit you learned as a child? Please share the story behind how you learned the habit and what impact it has had on you throughout your life.

Karen Gross: In truth, I did not learn about money in any systematic way. Money was not discussed in my family. It was one of those taboo topics. My father handled virtually all financial issues within the family (bill paying, allowances). I remember emerging as a young adult and not knowing what anything cost. I also remember that each month he gave my mother a check and we as children received cash, but nothing was said or discussed about what things cost or how to manage money. I had no idea what utilities, car insurance or a phone cost.

I had my first apartment in graduate school. That was when I saw rent is the beginning not the end of costs one pays monthly. I think my interest in consumer finance and financial empowerment stems from the absence of education I received as a child. It has led to lots of my thinking on how to educate young people about money and how NOT to make it a taboo topic or one about which one always argues, although that was not the case in my family. We had silence. But in many marriages, money arguments are omnipresent.

Poverty and the struggle to pay bills is a whole topic by itself that I will not address in this interview. Homelessness, food scarcity, use of public supports are all complex issues – legally, psychologically and practically. They are topics that affect many children and families’ but my answers would need to be tailored to and directed at those audiences --- for whom money is a topic of vastly different proportions.

Savings Bank Books

Renick: At around what age did you realize "money was money" or that it had a value? Please share the circumstances or how the realization came about?

Gross: I grew up in an era in which we had savings accounts and savings bank books. They were both handled through the public elementary school – grades 1 --3. We brought small amounts of money to school and they were deposited for us, as I recall. I remember that savings book with its many entries; I remember seeing the amounts grow. I remember how proud I was of the many entries and changing numbers. I think that is when I realized money had value. Many years later, I came upon that ancient savings bank book and it brought back a flood of memories about saving and discussions in school.

As an educator, I wonder if anything similar exists today in terms of school-based saving; I have no idea. I can’t imagine it; with the absence of saving bank books, the sense of dollars growing is harder to visualize although a good online program is possible.

There is one more way I came to understand the value of money: a penny candy store where we went as children. It was a special treat to go there. I remember my friend Gail and I were each given a dime. We had to think hard about how to spend that in the penny candy store: what would we buy for our dime? I remember the brown paper bags in which the storeowner would place each piece of candy selected ever so carefully.

Compound Interest

Renick: If you could only teach a child one money habit, WHAT money habit would you teach them? Please explain why.

Gross: I would teach them the value of compound interest, and I would do it using the book, One Grain of Rice: A Mathematical Folktale . It is the best book about money that is not about money.

The book involves an ancient tale where a county is dying from famine. A young boy finds a small sack of rice and instead of using it to feed his family, he returns it to the king. The king is so impressed he says to the young child, “What can I give you in return? You tell me, and I will do it.” The child says, “I want you to give me one grain of rice today and then double the amount of rice you give me each day for a month.” The King agrees thinking this will yield small amounts of rice and sends the boy home with one grain of rice. The next day the boy gets two grains; then four; then eight; then 16, then 32; then 64. It continues until the boy needs people and animals to help him carry the rice back to his county. Bottom line, the boy gets so much rice he cures the famine.

The book referenced is gorgeous – the drawings are amazing, some of which fold out to show the growing amount of rice the young boy is transporting home. You can find the book on Amazon.

Related: How to Map Your Kids Money Mindset

Money Mindsets

Renick: What was your biggest money mistake as a child or teenager?

Gross: I think it was not knowing that many folks had very different amounts and views of money. I remember I was supposed to go to the movies with a boy and he had saved and saved to be able to take me. I decided I did not want to go for foolish reasons. His mother called my mother and said, “John has been saving up for months to take Karen to the movies. She is breaking his heart.” Honestly, I still feel embarrassed and guilty about not going.

Giving is a Great Habit

Renick: What was one of the smartest money decisions you made as a child or a teenager and why?

Gross: I think it was spending money on gifts for others. Indeed, to this day, I believe in a gift giving culture and gift giving as a form of leadership. Gifts that are well-chosen, have real meaning to the recipient and I do it without the need for a reciprocal gift back. I got joy from giving as a child and that has continued --- and I continue to give. I give gifts as well as time and money and it is rewarding. Deeply rewarding.

My most recent co-authored children’s book with Marc Wine is a prime example of this. The book, Lady Lucy’s Laugh Giraffe Journey , involves donating a percentage of the net profits to the Giraffe Conservation Foundation --- the only non-profit dedicated solely to saving giraffe. So, the book is filled with giraffe jokes and facts that get kids and adults to smile; but, the book also does good as monies go to save the giraffe from extinction. And, we are auctioning off a portion of the giraffes photographed in the book to generate revenue for giraffe causes and to enable us to buy the book for kids and schools that cannot afford it.

The Talk – It Is Personal

Renick: A variety of surveys indicate it is a challenge for parents to talk to kids about money. What would you say are one or two of the primary reasons parents find it difficult to talk personal finance with their children? And, if you have a suggestion on how they can overcome the obstacle, please share that as well.

Gross: Money is very personal. It is also very culturally bound. My European father would have had to be hit or prodded with a stick to talk about money. Some of it is that money reflects not what we have but what we don’t have . We also have a sense of “filthy lucre” --- money is somehow tainted and unsavory in some cultures. We also are bound by how we get money – some of which can be from unsavory or sad circumstances. Although money is fungible, we often pay attention to its root source and that is filled with emotion and feeling (both positive and negative). Sadly, in American culture, we often use money and what it can buy as surrogates for what is important and valued. We often use money too as a substitute for love. In short, money is complicated. Freud had many things wrong, but he did get that money is psychologically bounded.

My basic belief is that one cannot talk to one’s children about money unless one fully understands one’s own feelings about money and its role and value. So, I’d ask parents to think about what money means to them and ask whether their reluctance to speak to their children is grounded in how they learned about and experienced the presence or absence of money. Do they make purchases when they are happy? Do they make purchases when they are sad? Do they make purchases to reward themselves for a job well done? Do they make purchases to overcome setbacks?

Personal Finance and Schools

Renick: Why do you believe there is not more personal finance being taught in schools? And, do you think personal finance should be taught in schools? Why or why not?

Gross: One reason is that teachers are not comfortable talking about money. In that sense, they are like parents. Their views of money are complicated and not fully understood. And, many people learned about good financial practices through trial and error. So, the idea of teaching about money when one cannot talk about it or comprehend it is understandable.

My own view, and I know I differ from many on this topic, is that we should not teach about personal finance as a separate acontextual subject or course. We need to integrate money discussions into many subjects that are taught and show the omnipresence of the topic across the disciplines. Money appears in literature, social science and math and statistics. In short, our U.S. budget (indeed all budgets) are a reflection of our values; we spend on what matters to us. So, let’s look at money within society --- personal finance as a stand-alone vehicle is not my first choice. It is often not well taught and sadly, students often show lower scores on assessment tests AFTER the course. How shocking is that?


Renick: Cambridge University research indicates that adult money habits are set by age 7? WHAT IF the research is wrong and adult money habits are formed earlier than age seven - perhaps around the age the "give mes" set in? What would this mean for families, schools, and/or the financial education industry?

Gross: Surely the question is not saying that kids need to understand money when they ask for a toy or a candy bar at age 3? For me, here is a different way of thinking about this. Reflect on money as a language. We all speak different money languages. The point is to learn our own money language and the language of others. Parents and teachers can help children learn money’s language. Kids like pretend stores and cash registers. They like making change. This is all learning about money without deep free-standing money lessons or lectures.

Money’s language comes from many places: society, religion, peers, advertisements, television, the Internet and cartoons, among other sources.

One of the best ways I have ever taught about money is through development of an understanding of predatory lending --- how people try to move money from your pocket into their pocket. And, I ask: How can we stop money from moving from our pockets into the pockets of others?

Both kids and adults like to be detectives and discover how schemes work. So, studying the schemes --- whether that is advertising or consumption market research or rent-to-own or payday loans or pawnshops or auto pawns --- can help students see how money can be moved. Understanding the psychology of money is important too – why we buy, what we buy, when we buy.

There is a growing neuroscience to all this. And casinos with their lights flashing and free drinks and darkness know how to separate us from our money. Stores place the softest clothing at the front of women’s clothing stores.

The deconstruction of schemes to encourage us to buy is far and away the best approach I have ever found for teaching others about money.

Final Thoughts

Renick: Are there any additional thoughts you would like to share or questions you would like the audience and myself to consider?

Gross: I think we can start with this statement: learning about money is complex and we assume that people will freely talk about it to complete strangers like bankers and financial counselors and teachers. Money reveals who we are and how we are measured internally and externally. We would be wise to look at the deep embedded assumptions we each have about money before we are so quick to teach it to others and require everyone to talk to everyone openly about money and finance. We err when we say money is only about numbers and spending and saving. It is about way-way more than that. Of that I am sure.

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