This is my last newsletter before I take summer break, so I wanted to reflect on what I’ve learned from writing Paper Robots over the last two years and from publishing a book in that time.

First, doing regular creative work – like this blog – takes a few hours every couple weeks. More than I thought in those breathless first two weeks back in Spring of 2023 when it was all fresh. Paper Robots now has 2,600 subscribers! Writing the blog brings benefits I never foresaw, including:

• It’s helped me find a professional / creative voice and brand. Working at the VCU School of Business and the Virginia Council on Economic Education is awesome, but they’re not all mine. Paper Robots is.

• Blogging takes my shapeless, idle musings and turns them into real, new material that (I hope) humans actually want to read. I can now be really “productive” just while tooling around Richmond. And if you ever see my car veer dangerously to the side of the road and see me punching ideas into my phone, it’s because I thought of something that y’all might like to read about, and I need to write it quickly down before I lose it. (My good ideas have about a 15 second life span in my head before they flit away forever.)

• My friends actually understand better what I do for work. Before, I’d be picking the kids up at school and other parents would say “so, how’s… teaching, what finance? Or what is it that you do?” Now they know!

• I’ve made lots of new connections.

• I get many new options for cool new projects from cool new partners.

• It’s helped put my book, Teach a Kid to Save, on the map.

• And, I hope, it’s provided entertainment and learning for you, good readers.

In the modern economy, it’s good to have one’s own professional brand. It helps clarify what makes you you, and differentiates you from your employer. But a good personal brand can also bring value to your employer. It’s best when it’s a win-win.

There’s also something I’ve learned since publishing Teach a Kid to Save: A Fun, Hands-on Approach to Teaching Smart Money Habits, which came out in January. The book is about how to set up a mini-economy to teach your kids economic values.

Here’s what I’ve learned that I should have put in the book: You can run your mini-economy in just one hour on a Saturday morning. That’s what it takes for the week.

So what? This allows the family to experience the entire economic process together, and therefore to learn family economic values together. The family, as a group, experiences goal-setting, production, cooperation, sharing, making saving plans, saving, paying taxes (for a family trip), and spending on things that each person wants. In one hour. Together. And every family member observes every other family member. This is especially important for elementary-age children who need things to be up close, tangible, and brief. You are developing a family culture in a way that they get.

Is that the only way to do it?

Is it bad to have kids earn a normal real-money allowance or get paid for chores? No, that’s fine, especially if they are moving into middle school age. They learn to handle money that way too. But if you do that, then the whole economic process is spread out throughout the week. The lessons aren’t as vivid; the teaching moments don’t present themselves as readily.

It’s a tragedy that so many families don’t talk about money, because the family is the best place to learn about money. The power of the mini-economy is family culture. A mini-economy doesn’t need to sprawl out through the week. It just takes one hour on a Saturday to:

• Have a family meeting (8 minutes)

• Do jobs (25 minutes)

• Check jobs and get payments and the store set up (7 minutes)

• Get paid, sharing, and saving (10 minutes)

• Shopping at the family store (10 minutes)

• Enjoy the rest of the day! (23 hours.)

As the rest of the week passes, the kids will more readily soak up economic lessons. They will have a context for understanding. They’ll know “what our family does” in economic situations.1

And well well well, look at this: Amazon is having a flash sale on Teach a Kid to Save! It’s only $13.60 now, right here! That’s a good price. Go ahead and order a copy. Send a copy to a friend who has elementary-age kids. Pick it up for summer reading. It’s like a longer, superior version of a Paper Robots post.

Get it here!

Lastly, would you like to share family-based economic practices with the parents in your school community? Next year, VCEE will be offering Family Financial Fun Nights, where I come with some community volunteers to lead families in fun little conversations and games about money. I’ll show them how to extend the conversations back at the house. If you think that’s something your community might be interested in, drop me a line and we can plan.

Paper Robots will be back in September. I will need to take on a couple guest posts next school year, so if you have a clever idea and know how to write, shoot me a message. I’ll be taking submissions.

Friends, thank you for being a great learning community! I love the conversations, comments, and emails. I hope I see you soon.

Best,

Stephen

The average gas price at the pump in the U.S. is $4.53. In 2025 the average price was $3.10. That’s almost a 50% increase in a short amount of time.

But how much does this increased cost really affect people? I decided to investigate by consulting not only economics sources, but also normal people, specifically at the OrthoVirginia orthopaedic clinic.

(You may not know, but I’ve been spending a lot of time there lately. I just had surgery because a bone spur in my shoulder sliced through my rotator cuff, and the orthos also just found a split in the tendon on my right foot. This is the fruit of a lifetime of skateboarding.1)

I asked three people at the clinic the same question: “Have you changed your behavior as a result of high gas prices?”

Desk worker: “I don’t really go anywhere except work. So no, not really.”

Nurse: “I don’t really go anywhere except work and the gym. So no. If the prices stay like this I might exercise at home more.”

And the orthopedist: “No, I mostly just drive to work. But it’s killing my kids. One drives an old F-150 and is outdoorsy. One lives in San Diego (traffic jams; driving everywhere; $6.22 / gallon gas). The prices are really making the outdoorsy son not travel so much, and my daughter has asked for work-from-home days.”

I was happy that these honest workers at the ortho clinic weren’t too badly affected by the gas prices, but slightly alarmed that they don’t seem to do much in life besides fix people’s joints.

How exactly does changing behavior reflect the cost of the increased gas price?

In economics, we don’t just look at the money cost (or “explicit cost”). We also consider the opportunity cost.

Opportunity cost is the value of your next-best choice. It’s Choice #2. It’s facing trade-offs. If you’ve ever had a really hard time choosing between two great options, the anguish that you felt is knowing that you’re about to pay a high opportunity cost. You’ve lost a great opportunity.

As my professor Jim Charkins used to say, “An opportunity cost is an opportunity lost.”

Interestingly, the OrthoVirginia staff just went ahead and paid the money cost of the gas. Their gas price might be high, but their opportunity cost is low. Apparently they don’t have much more to do in life than fix tendons. This increases my confidence in their professional work, but I hope they can learn to get out more.

I asked my son, Calvin, what we would do if we couldn’t afford travel soccer because of gas prices. In case you didn’t know, the “travel” in travel soccer refers largely to driving way out to River City Sportsplex at the nether reaches of the Richmond metro area for practices, besides going to weekend games and tournaments. It chews up gas in vast quantities. And infuriatingly, I have to pay a toll each way!2

“Calvin, what would our backup plan be? What is Choice #2 after travel soccer?”

“Hmm…” said Calvin thoughtfully, “My old rec team doesn’t play in the spring. And other rec teams aren’t competitive. And I don’t want to play on the Bryan Park travel team. And not playing soccer is out of the question. Maybe just watch training videos and practice in the yard?” Bless him.

For Calvin, giving up travel soccer would be a high opportunity cost. If for some reason we were finally priced out of soccer, the second best choices would be something quite different.3 If you use your car to drive to work and you’re teetering right on the edge of your budget, then those increased prices can be painful. If they cause you to consider switching jobs, the impact on your life is profound.

Tim Quinlan, Senior Economist at Wells Fargo, says that the U.S. economy is more resilient to oil shocks now than it was in the 1970s, but the effect of high prices grows the longer they last. At an event at the Federal Reserve Bank of Richmond this week, he said that “We can manage a short-term peak in oil prices… But if this goes on for six months, people would start to drop out pretty quickly.”

In the short term, we might just eat the costs. In the long term, we change our behavior to adjust. That hidden cost of doing Choice #2 instead of Choice #1, multiplied by thousands and even millions of people, is the biggest cost we face.

The combined effect can feel like we’re walking in deep sand. We can do it at first, but it adds more drag over time. It’s opportunity lost.

Teach the kids that each choice is valuable because each choice comes with an opportunity cost. Their choices matter. We have constant opportunities to do things that are important to us, whether by playing soccer or by stitching my joints back together. Be thankful for the great opportunities that we have. Let’s teach the kids to make the most of them.

I discuss how gas prices sunk Spirit Airlines on the local news here.

This newsletter is supported by the Virginia Council on Economic Education (VCEE).

It was mini-economy day in the Day household, and I was trying a new way to motivate and empower my youngest, Lucy, who is seven years old. So I told her that she gets to be The Decider.

I had noticed that she just shuffling around when she was supposed to be tidying. So I challenged her like this: “Lucy, we have some books, toys, and ornaments that are lying around causing a mess. They could look really good if they’re set up nicely. The family needs a Decider to choose how to set them up and then to do it. Would you be the Decider?” She accepted.

A few minutes later I heard one of her brothers scolding her from the other room. “Lucy! That doesn’t go there!”

“I’m the Decider!” she stamped in reply. Several minutes later she had set up the books, ornaments, and toys nicely. She had worked faster than usual, and had even accomplished an additional creative task.

Decision-making skills are the next big thing in the labor market. A survey from the Alliance for Decision Education found that “nearly half of 6.8 million job postings explicitly reference decision-making skills,” and “employers offer wage premiums of up to 23% for jobs requiring strong decision skills.”1

You might also remember that decision-making is a key part of motivation,2 as I describe in Chapter 4 of my book, Teach a Kid to Save, “Should Kids be Paid to Do Chores?” The first pillar of motivation is Autonomy. And part of working autonomously is choosing.

Can we systematically teach kids decision-making skills? Of course we can – economics is about how people make choices, after all. I’m trying to develop a new classroom resource for high school and college students to do exactly this. Want to see it?3

[I will pause and wait for people who don’t want to see it to move on to another email.]

Here it is. See the scenario below. Your job is to make the best choice you can. I call it a “Make a Choice Test,” or MAC test. Here goes:

So what did you choose? You have to have noticed that reno-ing the bathroom aligns with your incentives (via the realtors’ incentives via the homebuyers’ incentives), while the deck does not. Notice also that even though your buddy says the deck would increase the home value, by that logic, so does the bathroom.

The exercise is supposed to

1. Make the test-taker think from others’ perspectives;

2. Use the basic tools of economic thinking: goals, incentives, and opportunity cost;

3. Sort through complexity;

4. Communicate logically.

Of course, these are the future-ready decision-making skills that we want our kids to have.

Lucy’s new job is The Viper. (It’s The Wiper, but it’s pronounced with a German accent – an inside family joke4). She wipes down anything that needs it. But she’s growing in her Decider role, too. It was her idea to wipe down the trash cans and the oven hood. Instead of just cleaning what she is told to, she’s learned to identify things to clean. We try to both challenge her and allow her to take a bit more responsibility in her job each week. She is growing.

We should be rolling out the MAC tests for classroom use through the Virginia Council on Economic Education by next semester, and there are other versions for other classes (e.g. World History, U.S. History, Career Readiness, etc.) so stay in touch with me if you’re interested in using them. We also have a research project in the works.

I hope resources like Teach a Kid to Save and the MAC tests can help parents and teachers give the kids the guidance they need to be wise Deciders.

I was a new high school teacher in Raleigh, North Carolina, and I was far from home. Just twelve weeks earlier I had been a college student in Indiana. I didn’t know anyone in Raleigh except for the teachers I worked with, so naturally I wanted to spend time with them.

What did my new colleagues do on Friday evenings after work? They went to chain restaurants. O’Charley’s, Olive Garden, Applebees–you get it. I couldn’t afford to eat at restaurants that often. I assumed that the reason that they could was due to the 12% pay bumps they all got because they had master’s degrees, as were common in North Carolina teacher education programs at the time. I was newly arrived from college in Indiana, and Indiana teacher education programs only led to bachelor’s degrees.

What did I do? Sometimes I splurged and bought restaurant food for the sake of hanging out, sweating over the bill every second. Or I would just go along to get an appetizer and then load up on free breadsticks. Or I would skip dinner altogether and be sad.

It took several years before it occurred to me that they couldn’t afford to eat out either, despite their fancy master’s degrees.

Hardly anyone in their 20s can afford to eat out all the time! Everyone was over-spending just so they could enjoy time together. There’s got to be a better way.

It’s “Keeping up with the Joneses.” You know, looking over the fence at the next family, and then hustling to get what they have. None of us thinks we do it, because Keeping Up with the Joneses is for shallow people, and we’re not shallow people.

But nevertheless we pay for social access. And our peers shape our spending. Getting a nice house isn’t necessarily too expensive…unless we also stipulate that it has to be in the best school zone. If all your teenager’s friends have cars, not getting her one would mean social death, right? And then there’s the fees that go along with field trips, sports leagues (eating out on the road), and once again going to a restaurant with friends, and we must face the facts: a lot of our expenses pay for a ticket in the social door.

Social spending is a zero-sum game. If everyone is spending on it, no one can ever earn “enough.” No matter how much we earn, we'll find our way into the outer rim of a social circle that is bent on spending more than we can afford.

Would more equal incomes help? I suppose so. But maybe not. It’s not just that people are endlessly creative when it comes to creating social rankings (though we are). It’s that some people are more willing to overspend than others. Even if everyone was equal in income, just one person could upset the spending balance by being the leader in spending extra on everything. And those are the people that set the pace.

Unless they don’t. There’s two things that folks can do to put ourselves and our neighbors on a more sturdy financial footing.

First, be willing to say “sorry, we can’t do that.” Sadly, it means being left out sometimes.

• The soccer team orders new warm-ups but you don’t get one.

• You have the worst car in the school pickup line. (Or it feels like that.)

• You are a bit embarrassed to invite people to your kinda unimpressive house (do it anyway).

• Your friends get cocktails. You pass.

This path is un-fun, but what’s the alternative? Spend all your money on other people’s financial goals, so you have none left for your own?

There is another alternative, a happier one! This path means taking leadership to build a more accessible social scene.

For example, here’s what I did to solve the restaurant / teacher problem when I was in my twenties. Some of my friends had started a bi-weekly get-together called Spaghetti Tuesday. My roommate and I decided to start hosting it at our house.

Here’s how Spaghetti Tuesday worked. We invited anyone that we wanted to hang out with over to our house. Our freezer had lots of ground beef in it, and our cupboard had noodles and pasta sauce. However many people showed up, that’s how much beef, noodles, and pasta sauce we took out and cooked. Someone would bring a salad, and a few of the classier guests would bring wine. (Wine from the bottom shelf at Food Lion, of course.)

We could feed an entire party of people for same price as one person’s restaurant tab. And you know what? It was more fun. Sometimes there were 20 people and sometimes just four. We didn’t miss a Spaghetti Tuesday for four years.

Some coordination with potentially like-minded people, and perhaps some initial awkwardness, can overcome the barriers we face to planning smart group choices. Next, invite someone you don’t know well or who might feel left out. You can use your momentum to bring others along.

Be the first to suggest something low-budget and meaningful, like coffee at the kitchen table, talking around a campfire, or a bike riding gang for the kids. After all, our best memories are usually simple ones spent with friends and loved ones.

I don’t have all the answers to beat overspending, or social and income inequality. But with a bit of creativity, gumption, vision, and a conversation with a couple like-minded friends, and you can take a meaningful step in creating an accessible social scene for people you meet. You’ll find Joneses that help you keep up.

Check out my interview with Ginny Yurich on the 1,000 Hours Outside Podcast. On Apple, Spotify, or wherever you get podcasts.

This newsletter is supported by the Virginia Council on Economic Education. Check out VCEE’s Mini-Economy Market Day event from a couple weeks ago. Awesome!

During the Great Resignation of 2020-2021, waves of low-wage workers boosted their incomes by getting new jobs. The Great Resignation is over now, but it was heralded as workers standing up for themselves. Which it was, by using the most powerful tool in a market economy: competition.

How do people get a fair wage in a market economy? Competition between employers. When employers must compete for talent, they bid up the price of that talent. That means higher wages.

That also means that you need three things to be true if you want a raise:

1) You have talent.

2) There is competition for your talent.

3) The wage you want is worth the price to employers.

If any of those things aren’t true, then you will get no raise!

But what if one of those things is actually illegal? Employers would prefer not to compete with one another, after all. Can they actually prevent employees from hawking their talent to competitors?

Sure they can. It’s called a noncompete clause. A noncompete clause is an item in a job contract that says that you can’t go work for a competitor after you’ve left your current job.

This is so companies can protect trade secrets, so the argument goes. For example, in the 2010s many fast food chains used noncompetes, therefore theoretically protecting, say, McDonalds from having their Big Mac Secret Sauce recipe stolen by a recently-fired and vengeful worker, who might take it to … Taco Bell, which in the logic of the noncompete clause must be yearning to make that new Secret Sauce Burrito that customers keep asking for. (Hey, there’s no accounting for taste.)

And do they really reduce wages? To solve this mystery, economist Evan Starr from the University of Maryland is on the case. He and his colleagues did a real-life experiment to find out the effects of noncompetes, and reported the findings at a seminar here at VCU last year.

Dr. Starr was able to work with two different, competing finance companies that used noncompete clauses for short-term contract workers in marketing roles. He assigned noncompetes to some workers but not others. In some cases he simply reminded recent employees of Company A via email that they weren’t allowed to work for Company B. You can read their working paper here, cleverly titled “Clause and Effect.”

Dr. Starr and friends knew that job-seekers were reaching out to competitors because he was working with Companies A and B at the same time! So he was able to send them the email reminding them of the noncompete at the exact moment they were about to apply for the new job.1

Imagine yourself just about to finish your application to Company B when you get an email: “Thank you for working with us at Company A. This is a courtesy reminder that Company B is the enemy and you may not work for them.” (Not the verbatim email wording.)

People often replied “Thanks, I didn’t know that.” Though several replies were along the lines of “You can take that noncompete clause and __________, you _______!” (Unprintable. This is a family newsletter).

What did Dr. Starr et al. learn from this experiment?

1. “We learned that people don’t read their contracts,” he told the attendees at the seminar. What you don’t know can hurt you.

2. Removing noncompetes increases pay at the next job by between 12 and 16 percent. People can leverage the competition to negotiate better wages.

3. Removing noncompetes increases mobility between firms by about a third.

What about trade secrets? The noncompetes may help firms by protecting trade secrets, right?

Nope. Starr et al. described in another paper that noncompetes don’t protect secrets any better than a simple nondisclosure agreement (NDA) could.2

The noncompetes pretty much just reduce pay. By reducing competition between firms for workers.

What should workers do? Here’s a few takeaways.

1. Know whether or not you have a noncompete on your contract. In fact, noncompetes have drawn hostility from lawmakers and are increasingly restricted. They are completely banned in California, Oklahoma, North Dakota, Minnesota, and soon Washington. As of 2025, Virginia bans the practice for “low-wage” workers.

2. Understand the law. Many noncompetes are cannot be legally enforced. No one can take you to court. But they still just lurk there in your contract, watching you. Many workers still obey unenforceable clauses.

3. Use the competition; keep an eye on other jobs. Dr. Starr told me, “Sometimes we have set up our own informal de facto noncompete clause by simply not considering other jobs.”

A market economy depends on competition in order to work well. But no one likes competition when they are the ones who must compete! After all, shoppers desire secret deals and companies would prefer to have monopolies. But a good system is a competitive system. It keeps people honest.

Workers should make the best use of competition by keeping an eye on the job market. Find out what skills you might need to take the next step in your career. Don’t write your own noncompete clause. Being willing and able to make a move puts you in a better position to get the job you want, and the wage you want.

You can read more on the economics of noncompete clauses at this short but effective post by Nominal News.

This newsletter is supported by the Virginia Council on Economic Education. View upcoming VCEE programs for teachers here.

I’m leading a study tour to Peru this summer! All teachers are welcome. See here for more info and to sign up for the contact list.

The following is a repost of one of my first Paper Robots posts, from two years ago. Back then, housing affordability wasn’t as big a deal as it is now. Enjoy.

When I drive my kids around, I feel the need to call their attention to the things we pass, no matter how uninteresting the things are. “Look kids,” I might say, “those workers dug a hole in the road.” Where does this urge come from? Is it just that I’m bored and want them to look at what I’m looking at? Am I trying to distract them from arguing or complaining? Is there a clause in the Dad Contract that we sign requiring us to point out the pointless?

In one recent case, I was trying to teach them something.

“Kids,” I said as we passed a construction site in our neighborhood, “see this nice new building? Do you think new buildings make people in the neighborhood pay a higher price for rent, or lower?”

“Ugh, is this more economics, Dad?” groaned Daisy. On-brand for a middle schooler.

“It makes the rent lower, because there are more houses,” said Calvin, eager to please.

“No, it makes it higher, because it makes the neighborhood nicer,” said Robbie, eager to contradict his brother.

“My friend Davis is having a birthday party this week,” reported Lucy.

As Daisy suspected, my question was premeditated, and even more diabolically, based on economics research. I got my information from a new paper by Divya Singh and Luis Baldomero-Quintana, which estimated the effect of new building on local rent in New York City. Their paper shows that new building has contradictory effects in the short-term and medium-term: 

• In the short term, new construction increases nearby rent because of increased demand for housing and amenities. A new vintage shop sells used clothes for the same price as new ones, and a kombucha bar opens on the corner.1

• In the medium-to-long term, new construction decreases nearby rent because of the increased supply of housing.2

Calvin and Robbie used the same reasoning as the researchers did, with Calvin focusing on supply, and Robbie on demand.

“So who was right?” asked Calvin.

“You both were,” I replied. “First, the rent goes up for the reason Robbie said, because things in the neighborhood are newer. Next, the rent goes back down because there are more apartments to go around.” 

“But who was more right?” asked Robbie.

“Both. It’s a tie,” I replied crisply, “just at different times.” I made a mental note that pointing out things as we drive doesn’t necessarily stop arguments.

So you’re not an economist, and not comfortable teaching about supply and demand on the fly? It’s not so hard! Keep it simple: when people want things more or have more ability to pay for things, demand and therefore price go up. If people produce more things, supply goes up and therefore price goes down. But there are more important things at stake in this example than whether my kids learn about supply and demand (which is awesome, make no mistake). 

First, it’s important to get the kids thinking about the short term versus the long term. Delaying gratification is the main skill you need for managing money. It’s also the starting point for many (most?) difficult choices that people make. The longer we can get the kids to extend their time horizons, the better choice-makers they will be. 

Second, these conversations help them focus not just on themselves, but on other people. This particular conversation was about their neighborhood, but it could be about any neighborhood. It’s an issue that happens all around the world. Conversations about our neighborhood, our local economy, and the economic forces that move through it help them get a larger view of their world.

A follow-up question could be: “How do you think the neighbors feel about a new apartment building being built?” When the kids think through the positive and negative effects on the neighborhood, it can help them build awareness and empathy for the people around them.

This isn’t just a parent question. When I talked to Dr. Baldomero-Quintana about his research, this was just what he was concerned about. He is afraid that policymakers might fail to understand the feelings and therefore the politics of neighborhood residents, leading to clumsy policymaking and overly restrictive regulations on new building citywide.

As he and Singh pointed out in the paper, if people can’t pay for increased rent in the short term, they may be displaced and have to move. But if cities don’t build more housing, rent will be permanently high everywhere. After all, we all live in someone’s long term. There are always trade-offs. (His opinion is that cities should incentivize housing construction in run-down industrial areas, but not so much in established, older residential areas.)

Why do we feel the need to call our kids’ attention to things outside the car window? Dear reader, if you know, please tell me (perhaps in the comments below). It doesn’t have to be about supply and demand, or about change over time, but it can be. I think that it’s all part of our big mission to make the kids more aware of the world around them, and it is my secret joy.  

If you like reading about housing and want a deeper (much deeper) dive, check out my friend Dave Young’s new Substack newsletter, “Trade-offs Included.” In particular, this post, “What Housing ‘Affordability’ Means.” Dave just got his master’s degree in economics and is ready to put it to use by leading discussions on fresh topics.

I’d love to sign your copy of Teach a Kid to Save, but you have to buy it first, obviously. You can do that at Amazon, B&N, Revell/Baker (the publisher), or wherever you buy books.

Early in my high school teaching career, I would give my World History students the worst assignment: a four-page paper on ancient American civilizations (e.g. the Olmecs). The students hated writing these papers, and I hated grading them. They were boring to grade because they were boring to write.

If I gave that assignment nowadays, most of the essays would be written by A.I. The students would learn nothing.

This relates to one objection to the A.I. Revolution: that it will sap our fundamental skills, like writing. Several great thinkers I’ve read that describe the problem. Here’s one.

From Antowan Batts writing in Decode Econ,

“Consider what happens when you always have a shortcut available. You’re writing an essay and get stuck on how to articulate a complex idea - do you struggle through it, building your ability to communicate nuanced thoughts? Or do you ask ChatGPT to phrase it for you? The latter is faster, often better, and requires zero cognitive strain. Do that enough time, and you never develop the skill at all.”

The concern here is about human capital, that is, the education, training, and experience needed to do sophisticated tasks. Boring work gets us the skill we need to get to the fun work. If A.I. slurps up all the boring work, we’ll never get to the good stuff. And it might also slurp up the intern’s meagre paycheck.

I’m a guarded A.I. optimist, so I’ll give a guardedly optimistic answer.

There are at least two paths out of this conundrum: One is by not ever gaining certain basic skills at all (and that’s ok). Another is by education.

First, there are some things that we just don’t need to know how to do. For example, interns shouldn’t ever have to learn data entry if they can help it. Professionals shouldn’t be formatting slide presentations. If machines can do all this, so much the better. This is uncontroversial.

There are also some skills that we might lament seeing go by the wayside. Perhaps mid-tier intellectual work such as generic pop songs or listicles will be entirely done by A.I. Same for some artwork. Some activities will become hobbies rather than paid work–most art is already in this category.1 As is this newsletter that you’re reading right now.

But for the basic skills that we do need, we can rely on school, specifically teachers. We already do this for many skills that can’t be developed on the job. Think about your math class: your math teacher had a math machine called a “calculator” – right there in the room – that could do all the calculations she was teaching you. You knew it. She knew it. And she knew that you knew that she knew it. But she kept right on teaching you how to do calculations. The nerve!

Maybe a brave soul would challenge her about this. And she would reply, “If you don’t know how to do the calculations, you won’t even know what to tell the calculator to do.” The brave soul (me) would harrumph and slump back into his chair, defeated yet defiant. But she was right.

If we don’t learn what input to give A.I., we won’t get good output.

What about the more enriching skills for which humans have a comparative advantage2 over machines? What about innovative artistic skill, teamwork, personal connection, and decision-making?

Batts (see above), despite making an A.I.-pessimist argument, gives us a way forward.

“Teachers are making what might seem like a backward move: they’re returning to traditional teaching methods that many had abandoned years ago…More in-class essays written by hand. Oral presentations replacing written reports. Process-focused grading where students must show their work at every stage. Teachers sit with students during brainstorming sessions to ensure the ideas are their own…The teachers’ retreat to traditional methods isn’t wrong. They’re protecting something precious: the irreplaceable experience of genuine learning. Of struggling with an idea until it clicks. Of building knowledge through effort rather than acquisition through prompts.”

Think back to the terrible essay I assigned my World History students. I figured out that the essay wasn’t teaching them much. (I was also desperate to read better essays.) Over time, I started to assign shorter papers and asked for more focused arguments from the students. I began to work with them on developing topics and theses. Students explained their ideas in small groups. Eventually I only assigned two-page papers, but they had to have their sources mapped out and diagrammed by hand, and the papers revised and reworked until the arguments in them were compelling and supported by data.

In short, I moved from making my students churn out soulless, information-heavy slop to making them think. It was hard to do, but it was worth it.

I began by treating my students as if they were A.I. bots, doing work that wasn’t worth doing. But I got better. I moved toward helping them learn authentic intellectual work.

Make no mistake: if teachers aren’t rediscovering low-tech, traditional methods, then students will absolutely use A.I. to replace skill development.

It will be hard work, but I think we can do it.

This newsletter is supported by the Virginia Council on Economic Education. Click to learn more about the various ways that VCEE supports teachers and students.

Researchers in Turkey have uncovered a way to make kids more patient and to help them get in less trouble. The key: classroom teaching.

What did they do, and how did they measure success? Here’s how it worked.

A team of economists, psychologists, and teachers put together a curriculum1 that had one focus: to help kids think about the future when making choices. The team, led by economists Sule Alan and Seda Ertac trained teachers from dozens of schools in how to use the curriculum.2 (Non-paywalled paper here.)

Crucial for measuring the impact of this program was the way they rolled it out. The rollout was done in three phases. This way they could make sure that the effects they observed were causal, not mere correlation. It also allowed them to see the effects of the program over time.

Here’s how the researchers describe what they taught:

“The core material involves eight mini case studies and supporting class activities, with topics that include imagining the future self (forward-looking behavior), self-control against temptation goods, smart shopping, games to make future utilities vivid and close by, saving for a target, viewing and evaluating alternative future outcomes, and developing coping mechanisms against temptation to meet a savings target.”

In one example,

“Children cover a case study titled ‘Zeynep’s Time Machine,’ telling the story of Zeynep, a girl who wants a bike for which she has to save but is also faced with alluring short-term consumption possibilities. The time machine allows Zeynep to travel to two alternative future states (having saved for the bike or not) and observe the consequences of her decisions. Students discuss how Zeynep would feel in each scenario and are asked to imagine themselves in similar situations. Case studies are complemented by class activities and games. … Zeynep’s story involves children actually building a time machine and pretending to travel to future dates of their choice … (e.g., end of the semester, when they get their report cards), as well as drawing related pictures.”

What was your reaction to those activities? I hope it was “wait, that’s not that different. We already do activities like that3 right here in the good ol’ USA! (Or in whichever good ol’ country you are reading this.)

And that’s right. We do use lessons like this in our classrooms. So what makes this study special? A few things:

1. It rare that researchers go to this much trouble to evaluate the program impact. Making a causal study design is tough to do. This one took resources, and a lot of buy-in from teachers and school divisions, and a very large sample size.

2. The program was sustained and laser-focused on creating one particular outcome.

3. Teachers implemented these activities using a Turkish invention called “spare class time.” The time had been set aside by the school systems for enrichment activities. I hope that we can import this invention someday.

How did the researchers measure delayed gratification? They used a well-tested tool that is often used to measure patience in behavioral economics. It’s called the Multiple Price List (MPL) task. In it, students are asked to choose between gifts now or gifts later. (The “gifts” were little trinkets and toys. The students were really given the gifts, though not exactly according to their choice; random students’ choices were picked to divide up gifts amongst the whole class.)4

Here’s what the MPL looks like. Think the famous “Marshmallow Test,”5 but with different steps for more nuanced measurement.

As the researcher put it, a child who has been taught with their program “is expected to more easily and more vividly imagine or remember to think carefully about how he or she would feel as a result of a certain action in the future.”

Well, what was the outcome?

It worked. Students who got the practice in delaying gratification were willing to wait longer to get more real-life gifts. They even improved their classroom behavior grades. And lastly, the researchers followed up with the students into middle school, and found that the effects of delayed gratification persisted.6

What are some takeaways for parents and classroom teachers?

1. When teaching, connect head knowledge to regular practice. This is how you form habits.

2. Find a few goals to teach toward over time. Emphasis on few.

3. Economics and personal finance education has real, enduring effects if done well.

4. Professional development matters.

5. Good teaching matters.

6. If you are already doing these things, you’re probably having the impact that this study describes. You just might not see it yet.

Check for the link to the paper and description of their curriculum in the footnotes. They might be paywalled, so if you can’t get them, just email me and I’ll email them to you.

You are doing great. Keep up the good work!

I offer a Savings Template as a free download at my website, here. It’s a perfect tool for teaching delayed gratification, since it makes the kids draw not only their goal, but also their opportunity cost and the work they must do. Check it out!

This newsletter is supported by the Virginia Council on Economic Education.

Teach a Kid to Save has kicked off Week 1 with a bang: it is the #1 New Release on Amazon’s “School-Age Parenting” list, and #8 on the overall “Parenting” new release list!1 Thank you. You’ve allowed me to bug you these last few weeks with thinly-veiled book ads. Trust me, next week we will be back to your standard econ / personal finance / education / parenting content.2

For now, thank you for the conversations, re-posts, reviews, personal introductions, and (not least) book purchases that have Teach a Kid to Save off to a strong start.

I have one more request. If you have the book, please write an Amazon review as soon as you’ve read it. The sooner the better. This engages the algorithm and lets potential readers know that it is a Real Book. Goodreads reviews are good, too. Let’s keep this book on K-12-age economic education at the top of the list.

I want to thank the many organizations who have helped me along the way. So many have generously given me space in their platforms. Below I will share some of their content. If you like Paper Robots, I guarantee that you’ll like the teaching resources and blogs below. Enjoy.

• Virginia Council on Economic Education (VCEE). Award-winning lessons made by Virginia teachers, the Life After High School curriculum, and a scope and sequence for the Economics and Personal Finance class.

• Foundation for Economic Education (FEE) Learning Center. A constant stream of free new lesson plans in all kinds of categories, from Econ 101: Taylor’s Version to lesson plans that go with Monday Morning Economist.

• Monday Morning Economist by Jadrian Wooten. A free, weekly newsletter that makes economics easier to understand with insights from current events and pop culture.

• The Jump$tart Coalition. The Jump$tart Clearinghouse has a whole universe of vetted materials for teaching personal finance.

• Decode Econ by Abdullah Al-Bahrani. Substack economics blog that unpacks the trends and stories behind the headlines.

• National Association of Economic Educators (NAEE). Here is NAEE’s Curriculum Awards page. You can access the award-winning lessons, free.

• Council for Economic Education (CEE). If you haven’t visited EconEdLink lessons in a while, it’s time to go back. There’s always something new.

• Nebraska Council on Economic Education. Landing page for various econ and personal finance resources from an org that is always on the forefront of economic education.

• Next Gen Personal Finance (NGPF). Turnkey lessons and units for teaching personal finance. Plus awesome arcade games.

• M is for Money, Rob Phelan’s easy-to-use personal finance books.

• Leila Ugincius and the team at VCU News.

• The VCU School of Business faculty.

And that’s not even listing all the individuals who have lent their contacts and influence throughout this process. Thank you.

Next week we are back on track with regular Paper Robots programming. Until then, so long!

Teach a Kid to Save is now published! Your books should ship today. Thank you all so much for being with me on this writing journey! Enjoy your bonus Paper Robots post. At the bottom of the page you can find out about something you get for free.

The following is an excerpt from the chapter entitled “Sharing” in Teach a Kid to Save.

I am not naturally a generous person. Saving comes much more naturally to me. Generosity is something I’ve had to learn. I’m still learning. But I have come to believe that generosity is just as important a money skill as any other.

One way to steward our money well is to plan for generosity. Sometimes I look at my checking account and wonder where my money has gone. I’m not always happy with the result. But when I consider that I’ve donated money to causes I care about, I feel like I’ve accomplished something. I’ve made an investment in building or sustaining something that matters, been a part of creating a lasting legacy, and have served my neighbors.

Donating money brings many benefits to the donor:

• It prevents you from being miserable with money.

• It forces you to live within your means.

• It keeps you away from a mindset that always demands more.

• It shields you from life’s uncertainties (because you’re not living at the limit of your resources).

• It changes your heart. It molds you to care about the things you’re giving to.

• It gives you a sense that you’ve accomplished something. You haven’t frittered your money away.

But if we have no control over our money, we won’t be able to give generously. So many of us don’t have control over our money. Maybe we spend all of what we earn. We live right to the margin. We don’t have money to give or to save. When life throws us a curveball, our finances are thrown out of whack, and that leaves us feeling more insecure than ever.

It may seem strange to promise that giving money away can help with this, but it can. When we plan to give and do it consistently, it puts us in a more secure place. It takes our heart away from the constant dread of living on the edge and puts it in a place of generosity.

My friend Carl has been a financial planner for more than twenty years. The other day he told me, “I’ve been doing this a long time. Every single person or couple I’ve worked with who prioritizes giving, and lives on the rest, has believed that it’s worth it. They may have other problems, but in the area of finances they have peace.”

One thing is certain: We won’t be able to share generously in a way that matters if we can’t control our money. That’s why it’s important to build habits that help us control money, rather than have money control us.

One thing you can do is teach your kids generosity with their time. Plan service work projects. “Service work” is another category they should learn besides “family work” and “job.” Last weekend our church did “start with service” day, and my family found themselves out in the rain picking up trash. Thanks,1 family.

You can also teach your kids that “when our family gets money” we make a donation right away. Our family puts money in the “tithe jar.” This helps them develop responsible habits from an early age. They know that their money is already partly spoken for. Each dollar has its own special task.

That’s all for now. Short and sweet!

But if you go to my author website, drstephenday.com, you will find something new: free downloads. My wonderful wife, Sarah, has created downloadable mini-economy templates. There are templates for:

• Savings goal (with built-in opportunity cost)

• Money template

• Sample coupons for your family store

• Sample jobs

• Money book (accounting) chart

Now you have a nice, slick starter pack for getting a mini-economy going. Forward it to a friend!

Ok team, I will check in with you all next week. Until then,

With gratitude,

Stephen

Teach a Kid to Save has been published Friends, thank you so much for being with me these last two years. I cherish all the amazing conversations I’ve had with amazing people. Goodreads reviews are trickling in. This week’s post is an excerpt from the book. Enjoy.

I am concerned that kids get practice with money too late. They should be learning about money when they are elementary school aged. When parents do teach them, what the kids learn might not be age-appropriate. With due respect to enthusiastic dads who regale their kids with disquisitions on compound interest and fractional reserve banking, this just isn’t the time. I know; I’m one of those dads.

Elementary grades are the time for kids to learn money habits and values, not too many facts (see the citation for details about this).1 Developing those takes practice. Your magic words for elementary age kids are “when our family gets money, we…” Demonstrate these habits with your own money, explain why you do it, draw the kids into conversations, and set up systems so that the kids can develop the same habits and values.

You can do these practices in normal, everyday life, but you’ll have many more opportunities in your mini-economy. And if your own financial habits aren’t that good, the mini-economy is a good way that you can practice and demonstrate some better ones in cooperation with your family.

Let me show you how it worked in my house.

My daughter Daisy is now 13. She has been a part of our mini-economy for five years. For the first three years, we did mini-economy only during the summer, and this last year we have continued through the first semester of school.

She has grown in her knowledge and habits with work and money. When we first introduced the household store, I asked the kids how they planned to spend their money (after they had given their 10% donation). In the first summer, eight-year-old Daisy replied, “I want to make a pattern. So one week I will buy something small, like one piece of candy. The next week I’ll buy something big. Small, big, small, big.”

What an opportunity to wonder at the mind of a child! My mind is practical and budget-focused. Daisy’s is more imaginative. But inside the framework of a values-based plan, Daisy had freedom to think through how she wanted to manage money. I still don’t know if making a spending pattern has a practical value, but it got her thinking about how to use money. It helped teach her that she has control over her money. Kids need opportunities to make meaningful choices about money over time, and she took advantage.

Two years later, when she was 10, she had a different approach. She wanted to buy a “hoverboard.” You know, the two-wheeled gyroscope-balanced electric vehicles. (I think “hoverboard” is a tragic misnomer; the boards do not actually hover, unlike the ones from the movie Back to the Future 2). I told her that since the hoverboard was expensive, she’d probably have to save up all summer for it.

She told me, “I think I can get it faster.”

She proceeded to pull together all the resources at her disposal to expedite the achievement of her goal. (Recall that Bucks can be exchanged for U.S. Dollars at at rate of two-to-one.) She used birthday money, took an extra job, had DayBucks saved up from the previous summer that I didn’t know about, and even – appallingly – asked her friend who gave her a birthday present if she could return it for store credit and use it to buy the hoverboard. It wasn’t classy, but she achieved her goal quickly. Thus she was able to buy the contraption two short weeks after I told her it would take all summer.

She had demonstrated that she could be ruthlessly goal-oriented with money. Borderline rude, if you count the returning of the birthday present. But certainly not lacking in initiative and gumption.

When she was 12, her goal-orientation was up to a new level. We were amassing tax money to buy a big trampoline (see the Chapter Six section on taxes). I told the kids that we could buy it on credit once they had enough for a down payment. (Read more about that in Chapter Ten, “Mistakes.”) At this point, Daisy was too old to be interested in many of the items in our store—we are in the process of refreshing the store for kids who are another year older.

But she was really excited about the trampoline. She volunteered to donate all her money to the down payment, and she encouraged her siblings to do the same. They didn’t want to since they had other saving goals. No matter that others weren’t donating much. She wanted the trampoline and she wanted it soon. She donated her entire salary and savings the next two weeks, and we quickly had enough for the down payment.

You learn a lot about your children when you watch how they manage money. She displayed grace, generosity, and leadership. She also showed verve and quick decision-making when she saw something worth getting. She identified what it would cost her, and wasted no time paying the cost and reaching her goal.

Daisy isn’t someone to whom life happens. Daisy happens to life. I hope that, as a parent, I’ve been able to be a part of that.

As always, friends, see you in two weeks. If you have any thoughts, leave them in a comment. Blessings to you all!

“These young workers!” sighed my friend Austin as he mournfully munched on a powered sugar Danish, “They act like they’re doing you a favor coming to work in-person once a week, and they’re half an hour late.”

“They’re ‘acting their wage,’ dude,” I told him, “They figure that they should work what they’re being paid.”

Are you familiar with the phrase “Act Your Wage?” Around 2020, this axiom spread through the TikTok accounts of young workers everywhere. The advice was simple: if your work tried to get you to work above and beyond what they were paying, just ... don’t do it. You should only work as much as your paycheck is worth, then stop.

Depending on your point of view, Act Your Wage was either brave resistance for mental health against an exploitative system, or alternatively a whiny excuse to get out of work.

“I dunno, man,” said Austin, “They would think differently if they had been around in the 2008 Crash. Being a freelancer, I was lucky to get any work back then. For, like, years.”

What to make of all this? I want to give the young generation more credit than just scoffing that they need to “pay their dues,” which I know is the age-old reaction of people who have already been there and done that. As a teacher and a dad, I need to be ready to offer good advice that respects the young workers and also points them to the right path.

Here’s three points for evaluating “Act Your Wage,” and what to tell young people who are trying to forge a path in life.

First, the labor market matters. We can expect worker empowerment phrases such as “Act Your Wage” or “Quiet Quitting” to gain traction when the labor market is strong. When employers are desperate for workers, workers can flex their muscles.

Let’s review the labor market landscape from the past couple decades.

• Real wage growth was slow in the 2000s, and then…

• Wages and employment got clobbered by the Great Recession of 2008-2009. This was a tough time. Prices stayed low, but it was really hard to get a job. So basically the opposite of how things are in 2025.

• Wages and employment grew steadily but very slowly until about 2014. And then…

• Things got better! From 2014 - 2020 wage growth was strong, especially for low-wage and young workers. Finally! And then…

• Covid-19 struck. You know the story. Massive government spending. Massive infusions of cash from central banks. Broken supply chains. And a worker shortage.

“Act Your Wage” came about during the Covid era as employers grasped for whatever workers they could get. Young workers rallied together (digitally) and demanded better wages, or if the wages weren’t forthcoming, fewer job responsibilities.

• Today the unemployment rate is low, but that’s mostly for current, older workers. But inflation is too high and high interest rates eat into wages. Evidence suggests that job openings are scarce for new college graduates.

It’s not 2020 anymore; employers have some leverage again.

I decided I needed more down-to-earth, real-world data. So I reached out my most reliable source, the Day Children. As you all know, they’ve had excellent training in our household Mini-Economy. They know how to work, how to negotiate, and how to talk and think about work.

“Kids, I have a question about work,” I said. They had me on speakerphone as they rode in our van with their mom. “Should kids ‘act their wage?’ I mean, should they only work as hard as they’re paid, and no more?”

“You made me clean the whole basement for just $2!” thundered my 13-year-old, Daisy.

“Wh - what?” I stammered.

She repeated herself, louder this time.

“I don’t remember this,” I protested, “was it a mini-economy job?”

“It was the whole basement, and it was $2!”

“I don’t believe this at all,” I retorted, “because I don’t remember the whole basement ever being clean!”

“I had to vacuum and everything!” Clearly Daisy is on Team Act Your Wage.

Her argument was compelling. My mind flashed back to an incident from when I was 18 years old. I had taken a job mowing a neighbor’s lawn. (My little brother Bubba, with whom you are familiar from last month’s post, having been fired because he had mowed over her flowers.) The neighbor had a section of her yard that served as her dogs’ bathroom. It was full of poop. I mowed every other part of the lawn, but when I got to that part I walked to the back door and asked my employer what I should do.

She didn’t answer me at first, but turned to discuss things with her dog.

“Poookie! Did you go poooopy!?” she trilled.

Having paid Pookie the respect it was due, she turned to address me: “Pick it up.”

There was no amount of payment that would have made it worth it.

“I’m sorry, I’m not going to do that,” I had said evenly, “It wasn’t part of the job description.”

She fired me. I had two other brothers that she could have hired next, but at this point the name brand of Day Brothers Yard Work had been irreparably damaged in her mind. Who knows how the yard ever got mowed?

This rebellious thought process was mercifully interrupted by my 11-year-old Calvin: “If I had to do really bad or hard work, I’d want to know ahead of time that it was coming.”

“Yeah!” came another voice over the speakerphone, probably Robbie. (“The whole basement!” I heard in the background.)

Calvin continued, “If I thought that the work was too hard, I’d ask for more money, or I wouldn’t agree to do the work. The parent should tell us what we’ll have to do.”

This is utterly reasonable.

This brings me (finally!) to Point #2: Businesses have an obligation to be up-front about all job responsibilities. If they don’t, it’s both a public service and economically efficient for workers to let the word get out about what the job actually entails.

Lastly, young workers must realize that the main value of the first job is the next job.

Consider:

• Young workers get lots of on-the-job training. The resultant gain in human capital accounts for an important share of their lifetime wages, according to a University of Chicago study.

• According to the Federal Reserve Bank of Richmond, higher‑order skills such as teamwork, self‑control, and strategic thinking are well rewarded in the labor market for disadvantaged youth.

• The Youth Development Survey (YDS) found that moderate, steady employment during high school—work that does not crowd out schooling—helps young people build human capital in the form of responsibility, time‑management, and social skills.

• However, The YDS also found that very intensive work or unstable, low‑quality jobs can harm academic progress and do less for skill formation. This supports Point 2. Call these “Pookie Go Poopy” jobs.

We are ready to deliver a final verdict.

First, this is all largely a function of worker negotiating power, which depends on market conditions.

Secondly, employers should be expected to be up-front about what a job entails. And workers should avoid work that inhibits their human capital growth.

But jobs usually help workers grow, which is the last point. Austin summed it up perfectly:

“Workers should act their next wage.”

Thanks to the Virginia Council on Economic Education for supporting this newsletter.

A possible reason for the difficult labor market for graduates is “labor hoarding.” If this interpretation is correct, then employers are neither hiring nor firing now, leaving no room for new workers.

Publication Day for my book, Teach a Kid to Save, is less than six weeks away. Maybe you’ve already pre-ordered your copy, thus helping ensure a big Day One. But did you know that TAKS is being offered in a free book giveaway on Goodreads? There are 15 copies available, so the odds of winning are steep, but give it a try, Goodreaders!

Last summer I found myself on an Amtrak train late at night, putting the finishing touches on a Paper Robots post about motivation. I so badly wanted to sleep, but I still needed to record the audio.1 Many people in the train car were asleep. So I did the logical thing: I went into the train’s bathroom to record there.

Now, it’s not uncommon to hear people murmuring strange utterances from behind the bathroom door of an Amtrak as it labors down the track, but I still think the people in the cabin could hear me and were weirded out.

When I emerged, I listened to the audio on my headphones, and it sounded like…I was recording in the bathroom of a speeding Amtrak train. So I re-recorded in the cold hours of the morning when I arrived home then collapsed into bed.

That is the content that I am re-posting today. I’ve always liked my Paper Robots series on motivation,2 and it formed an early part of Teach a Kid to Save. In fact, here is a short excerpt from the book itself:

Don’t forget to give the kids jobs that require skill. Remember, one of the basic psychological needs for motivation is competence. If we give the kids jobs then only require drudgery, then all that’s going on in their minds is drudgery. But if their jobs take creativity, then their minds will be on what they need to create.

Enjoy this re-post below, originally titled “How Do I Motivate Kids?” But I’ve since learned that the real takeaway involves lawn mowers and chainsaws.

What do you do when a child won’t do their work?

Saturday is a job day in the Day Household. Everyone has a job description, which helps the kids envision what work to do:

• Five-year-old [now six] Lucy is the Zookeeper. She takes care of the cat and stuffed animals.

• Seven-year-old [now nine] Robbie is the Gardener.

• Nine-year-old [now 11] Calvin’s job is Hospitality and Front-of-House [he has since moved to Apprentice Landscaper]. He [tidied] the front rooms and offered visitors a cold drink.

• 11-year-old [now 13] Daisy’s job is Communications Officer. She maintains the electronics and cleans the TV room.

• And the 40-something-ish folks are Kitchen Worker and Landscaper, respectively. As I said in the last post, the adults should have chores to do at the same time as the kids.

We began the day as we do most Saturdays: with “morning meeting” in which we discuss the plans for the day. We also discuss our mini-economy. Perhaps they want to switch jobs, they think a certain job needs to be done, they wish our home mini-economy store sold so-and-so item, or they want to go on a particular outing. Then we pray, sing the family song (“This is the Day”), and huddle up and cheer “Go Team Day!” (There are a lot of Day family puns, now that I think about it.) Deliberation, goal-setting, family traditions, giving the kids a voice, and work planning set structure and expectations. As I showed in my last post, these are often missing when parents try to get kids to do chores.

Our seven-year-old gardener was not feeling his job last Saturday. Reasons included:

• “I have the hardest job”

• “I just don’t like pulling weeds”

• “I already did it” [editorial comment: inaccurate]

• “I have the hardest job”

• “I have the hardest job”

In economics, the fundamental lens through which we view the world is “people respond predictably to incentives,” and in fairness, as Gardener, he does have to pull weeds, which might be the worst job. It’s no fun. Hot, time-consuming, strenuous work brings plenty of disincentives with it. (I gave him the option of switching to a different job, which he refused.)

“Great work, Adam Smith,” a sarcastic imaginary parent might say, “you’ve discovered that kids don’t want to work. Thank you, economics.” What incentive does a seven-year-old have for doing his job at all?

Well, Sarcastic Imaginary Parent, people are motivated in two ways: internally and externally. Decades of psychological and economic studies have worried that too many external rewards and punishments can crowd out more wholesome internal motivation. This problem even has a name: Motivation Crowding Theory. I’m thinking about the best way to motivate my children here. We do pay them for their chores, but Motivation Crowding Theory makes me hesitant to emphasize payment too much, or to use withholding payment as a threat.3 This is the day that I tried the route of internal motivation.

“You still didn’t answer the question,” jeers Sarcastic Imaginary Parent, who has now taken up permanent residence in my head, “how are you going to make someone be internally motivated?”

You can’t. If someone doesn’t actually enjoy the task at hand, you only have so much to work with. But you can support people in whatever internal motivation they have, like cupping a flickering match with your hand in a high wind. One way to understand what fosters internal motivation is the “RBG Framework,” which economists have drawn from educational psychology research. Here’s what RBG stands for:

• Relevance. People want to know why a task is important.

• Belonging. People want to feel like their work supports a community, and the community supports them.

• Growth, or a “growth mindset.” When people think they’re immutably good or bad at something, they’re less likely to put effort into working on it. But they will work if they think their work helps them get better. [Note from 2025: and as I argue in Teach a Kid to Save, it’s crucial to give kids jobs that require skill and perhaps which make them learn how to use a tool.]

I helped Robbie finish his job. While we worked, I tried to reinforce the points above. I reminded him how the job maintains the hard work we did making a flower bed. I told him the family needs him, and he needs the family. And I talked about how all this work makes the house better. Did this talk help? It seemed to help a little. He did his job. I didn’t love this kind of speech when I was a kid. I don’t think a talk like this always works immediately in the moment. Cultivating RBG isn’t an intervention that turns a situation on its head. It’s something you work at over time. It’s a part of creating the structure and expectations that kids need and even crave.

What did work? My wife came outside, and noticing Robbie slumping, asked “Stephen, could he try to mow?” (I had started to mow. I am the Landscaper after all.) He immediately perked up. It was the first time he had been allowed to cut the grass. By the time he was done mowing, he was striding around the yard like he had personally conquered it, and I was digging in the dirt. We had switched jobs, but they got done. Whether this was a parenting victory or not is unclear.

[Now, in 2025, I’ve learned that teaching the kids to safely use power tools is one of the most motivating things you can do.]

How to explain this transformation? If it was due to internal motivation, then you could say he felt like he was growing (the G in RBG). Perhaps mowing made him feel more competent, which is another important aspect of motivation. But there may have been an aspect of external motivation here: mowing felt like a reward. And it was something new. I am quite certain that he won’t be stoked about mowing if he does it every week.

Here’s a good way to think about motivation with kids: you should try to tend to their internal motivation over time, mostly by not snuffing it out. You can do this by using the RBG framework as a tool. Economists and psychologists have long understood that people respond to all kinds of incentives, and those incentives are often not money. But there is a place for external rewards. Sometimes we need rewards or punishments if we’re going to do things that we don’t like. Next week [or the link in the footnotes] we’ll switch our focus from internal motivation to external motivation. We’ll look at when rewards do and don’t help motivate people.

Let me know your experiences in the comments.

• How have you built internal motivation for a task? Was it an internal or external incentive?

• How have you helped build children’s motivation? (Looking at you, teachers and coaches.)

• Kids, what motivates you? What de-motivates you? When is a time that you felt you’ve grown?

• What builds relevance? Belonging? A growth mindset?

  

Also, my wonderful wife, Sarah, made this new website for me. Enjoy the new drstephenday.com.

My youngest brother, Bubba, was a walk-on on the Purdue varsity basketball team. Bubba didn’t see a lot of playing time, but he did win ESPN’s 2011 Coolest Name in the NCAA Tournament competition, defeating the likes of Skylar McBee and Shabazz Napier in online voting.

When Bubba was a college athlete there were strict rules against earning any money from sports. You were allowed a per diem when on the road, and Bubba managed to turn these $100 one-off payments into his entire income, as he hardly spent anything, but squirreled it all away.

The Supreme Court changed all that in NCAA vs. Alston (2021), opening the door for the current free-for-all in which college athletes (in big-time revenue sports only) are showered with cash, ostensibly-but-not-really in return for the use of their name, image, and likeness. Basically, they’re just getting paid.

What do they do with all that money? The New York Times has interviewed 47 college football players to find out. The article is paywalled, so I’ll summarize it for you. The money tends to go to one of four categories:

• Cars, including Dodge Chargers, Ford Raptors, and Dodge Durango Hellcats. (When did Dodge become a cool car brand?)

• Hobbies, including a fishing boat, NERF guns, video games, and a 150-acre deer hunting ground.

• “The Finer Things,” including cruises, Disney, restaurants, deep-sea fishing, and;

• Investments, including houses for parents, dress shoes, Rolex watches, and…wait, how are these investments? The New York Times says they are. C’mon, NYT. Oh, wait, one player, Collin Wright of Stanford “put it in index funds and ETFs…they give me a very diverse portfolio with consistent growth. I hate losing money.” Good job, Mr. Wright.

I suspect that many of these players are falling victim to the mental accounting fallacy that I discussed in last week’s post, which tends to make people see new windfalls of cash as “free money.”

Readers, question: which of the categories above would you most likely spend the money on if you were still in college? Here’s a poll for you to vote on. I’ll reveal the results next week.

To learn more about what athletes can teach us about money, enjoy this re-post below from early 2024.

“Which is a better way to save money: to decrease your spending, or to increase how much you make?” This is the question I asked my two boys en route to soccer practice. (Yes, all Paper Robots questions are tested on real children!)

People disagree strenuously about this question, and the boys were no exception. In my experience, the divide is between steady, doughty types, who dolefully answer “decrease spending,” and perky entrepreneurial types, who exclaim, “increase income! 100%!” It’s Team Spend Less vs. Team Make More.

I’ll tip my hand: I’m on Team Spend Less. One reason is that I was so affected by a Sports Illustrated article from 2009 on the shocking state of retired pro athletes’ finances. The article reported that “78% of former NFL players have gone bankrupt or are under financial stress” and “Within five years of retirement, an estimated 60% of former NBA players are broke.” These guys make as much money in a year as many workers do in a lifetime. Increasing income sure didn’t seem to work for them.

What happened? Athletes’ money fell victim to flashy but shoddy investments, grifters inside and outside their family, overspending, and divorce. Another report from the British Professional Players’ Federation found that only 30% of athletes chose when they retire; the rest had retirement thrust on them by injury or not being re-signed. Their income evaporated overnight.

I decided to follow up and see if there were any more recent or rigorous statistics. There are, and it turns out the situation for pro athletes isn’t quite so dire. According to Annamaria Lusardi and coauthors, the actual proportion of bankrupt former pros 12 years after retirement is 15%, compared to about 5% in the general population at the same age. That’s triple the rate. Not nearly as bad as the SI article claims (their numbers were from simply asking sports agents), but still really, really bad.

Other sources estimated that the proportion of Americans who will file for bankruptcy sometime in their lives is between 10% and 12%.

Lusardi’s data showed that the chances of bankruptcy weren’t affected by the length of an athlete’s career, nor by how much they made. For athletes, having wealth is not about what you make. It’s about what you spend.

(The pay of minor league or female athletes was not part of these analyses. I hope someone runs the numbers on this, since pay in women’s sports has been in the news a lot lately.)

Team Make More argues that there’s no upper limit to how much you can make, while you can only cut expenses so much. Fair enough. But there’s no upper limit to how much you can spend, either. Building wealth has an order of operations: you have to have financial skills first, then you can actually keep and grow the money you earn, however much that is. If you don’t know how to manage your money, any money you get will take wings and fly away.

What financial skills do you need? The Consumer Financial Protection Bureau summarizes them:

1. Knowing when and how to find reliable information to make financial decisions.

2. Knowing how to process financial information to make financial decisions.

3. Knowing how to execute financial decisions and adapt to stay on track.

Not only do retiring professional athletes often lack these skills, but they also face unique pressures, such as the randomness of their income stream. But that’s just the point. You have to have skill at handling money if you come into large amounts of it, or the money will disappear.

How can we talk about these things with young people?

First, use the example of pro athletes, since many kids are convinced that they’re on track to be a pro themselves. I used to share the SI article with my high school students, and it really resonated with them. The one problem was that a subset of students was actually attracted to the idea of having a three-year spending binge before descending into financial oblivion!

You can ask your own kids the questions I asked mine. In addition to the main question at the start of the article, you can also ask,

• “Who do you think has more money when they’re my age: people with regular jobs, or famous athletes?”

• “Which is harder, saving money or earning money?”

To make the questions more vivid, you can use examples from daily life – shopping, chores, allowance, or, if you have one, mini-economy jobs. When I asked my sons “what about your mini-economy job? Would it be easier to do more jobs and make more money, or spend less money at the store?” they immediately began debating. They answered confidently – and they went in different directions. One said “more jobs for more money,” and the other said “less spending.”

Whether you’re on Team Make More or Team Spend Less, start thinking about these things, and get the kids involved. As they talk through these questions, they will begin to build the financial knowledge and skills they will need to thrive as adults.

This article is supported by the Virginia Council on Economic Education (VCEE).

Rock stars and top-league athletes are famously broke. I’ve written before about their struggles: lack of financial literacy; not knowing whom to trust; comparisons with friends who are big spenders; injury; and the unpredictability of contracts. There’s an important reason I forgot, though, when I first wrote that article. It’s something we all do: we treat windfalls as free money. Play money! Treat yourself money! When we come into a windfall we relax our long-term goals and just spend.

This is the infernal cognitive gremlin that economists call mental accounting, that is, treating different “pots” of money differently depending on where you got the money or what you plan to use it for. It’s why people carry credit card debt while keeping money in low-interest savings accounts. It’s why we turn a perfectly predictable tax refund into a spending spree and then wonder where it all went.

The rational thing would be to look at all the money you have in light of your overall budget. But mental accounting says “no, this money is special money.”

Mental accounting is one reason why everyone finds it so difficult to get ahead.

Here’s hard evidence: in this Harvard study, economists tracked how people used money they saved from surprise coupons at the grocery store. They spent an extra $1.59 on groceries for every $10 they saved. But here’s the kicker: they spent it on things they didn’t usually buy. They inflated their lifestyles ever so slightly in response to a tiny windfall. Similarly, people buy more when using store cards and gift cards, and gamblers gamble more when they are playing with “house money.”

My father-in-law Charlie calls it OPM: “other people’s money.” In his book That Ain’t No Deal, co-written with his son Art, Charlie describes OPM (which for him often refers to debt) like this: “you just naturally tend to spend your own money with more care and consideration than you do money you did not earn yourself. ‘Borrowing dulls the edge of husbandry.’ Debt isn’t the only form of OPM. An unexpected windfall or dividend can also lead to OPM.”

(Wow, I just noticed that OPM sounds like “opium.” Is that intentional? I’ll ask Charlie next time I see him.)

If us little people tend to blow through our small windfalls, pity the demigods who inhabit the Olympian peaks of the world’s top sports leagues! Likewise, lottery winners often struggle to turn their winnings into lasting wealth.

But not so fast: mental accounting can help us, too. For example, if we struggle with overspending, mental accounting can help us by saying “no!” if we spend one category’s money (say, college saving) on overspending in another category (say, for a cruise). It can act as a firewall. We can use this little bit of irrationality to rescue us from even worse irrationality.

Now that I think about it, you really ought to mentally account when you get birthday money. Go out to eat. Your loved ones will be offended if you sniff “thanks, this will be a great extra $50 in my emergency savings fund” and hoard it against the dark day that your HVAC goes out. I personally put my birthday money in a “coffee endowment” which I use to buy nice coffee shop coffee. The actual cortado or cappuccino, not just my regular black cup-a-joe.

The important thing is that you see your mental accounting for what it is. So you’ve come into a bit of money? It might be an opportunity to put it in the kids’ college fund–you’ve been trying to do that, remember? But if you’re a little bit ahead, maybe just take your special someone out for a nice dinner. You might be behind on that, too. (Pauses to reflect…)

So you see, you don’t have to be an economist all the time. You can just be a human sometimes, too.

As long as you budget for it.

I’ve made a bet with my dad’s friend Keith about the future of work. If, after 10 years, coffee shops are staffed by robots, I owe him a cup of coffee (to be served by a robot). If coffee shops are still run by plain ol’ humans, he owes me a cup.

Whose side of the bet would you take, dear reader? Will a kindly smiling barista hand us our coffee and wish us a good day as Keith forks over 10 bucks? Or will I burn with shame as I buy his coffee from my new robot overlord?1

The thing is, we made the bet five years ago, which means there are only five years left on the clock.

Here are the arguments. Keith says “In the not so distant future, everything that we regularly use and much of what we do will be made and done by machines. My axiom is: if a machine can make (or do) it, a machine will make (or do) it.”

I say the opposite: machines may not do all the work that they are capable of. Why? For the same reason that a particular human doesn’t do all the work that he or she is capable of: it might not be the best use of your time and talent. Just because a machine can do the work, it doesn’t mean that it will.

We’ve had automatic coffee machines for years. But here humans are, still serving coffee. Why? The barrier to robot baristas isn’t the level of technology. It’s that robot technology is best used for other tasks.

In economics this is called “comparative advantage.” It means that we don’t necessarily do the work that we’re best at. We do the work that others don’t have time to do, the same way that a lawyer hires a paralegal or a parent hires a babysitter. The lawyer could make legal briefs better than the paralegal and the parent would do a better job watching the child. But in both cases they have things they need to do, so they hire help.

In the coffee shop scenario, the human baristas are the paralegals or the babysitters. (Though I’m sure baristas will insist that robots can’t pull espresso shots as well as humans can.)2

Of course, the hot topic isn’t robots. It’s artificial intelligence (A.I.). A.I. is sweeping the planet with its breathtaking powers. It looks like it and its robot accomplices will be able to do absolutely any job. And I’m sure they can.

You see, I’m going out on a limb a bit by arguing that a particular job won’t be taken by machines. Because many jobs have been taken by machines in the past. My logic only holds that all human jobs won’t be taken by machines, and that A.I. won't cause permanent human unemployment. There’s a real chance that in four years, there’s a sudden surge of robot baristas, and I lose the bet. Technology can’t take all human jobs – there will be jobs as long as there are problems to solve – but it certainly can change what jobs people do.

We have seen the growth of A.I. jobs close to home, in fact, in the very home of the Day family. My eldest daughter, Daisy, decided to write a young adult novel. It’s handwritten. When she started writing, she asked if we could transcribe it to the computer so she could print it. I explained to her that transcription is tedious and time-consuming; transcribing a whole novel might not be possible.

But then I tried using A.I. I took a picture of her first page, uploaded the picture to Google Gemini, and told it to “transcribe this page of a handwritten novel. Copyedit it and format the spacing.”

Presto! It came out perfectly. I copy and pasted it into a Google Docs and the book was on its way. Daisy was exhilarated and decided to write even more. She used A.I. image generation to create a cover. We got it printed through a website.

Calvin, the next oldest, saw how do-able this all was and decided to write his own short novel.

Check out this sweet book!

What’s the point here, and what does it have to do with robot coffee?

In the example of the books we see jobs been destroyed and jobs being created. By doing our editing with A.I., we were destroying their grandmother’s job. My mom was a long-time editor. She helped graduate students smooth out their academic writing.

Poof! With the advent of A.I. Large Language Models, her job disappeared into thin air. Don’t worry, she retired a couple years ago. She's not looking for work.

But here’s the crucial part: the A.I. got my kids to write more. It created jobs. Without the A.I. tech, their books would have been too laborious to transcribe and they wouldn’t have such nice covers. They wouldn’t have gone to the trouble of writing the whole book. But because the tech enabled them to make a glorious, professional-looking book, it induced them to write more. The payoff was worth it.

Think of it: an A.I. tool that writes caused the kids to write more. Handwriting, too! This shows just how difficult it is to predict the effect that technology will have on jobs. Even tech that should crowd out a job can sometimes crowd it in.

Similarly, technology that helps keep a coffee shop open could provide more jobs for baristas. The robots will do all kinds of work that makes the coffee shop experience cheaper to provide. But there will always be a place for the humans. I’d bet a $5 cup of coffee on it.3

If you haven’t pre-ordered your copy of Teach a Kid to Save yet, now is the time to do so. A.I. had no effect of any kind on this book!

When I was a little kid, I told my parents that I wanted to be a church pastor when I grew up. They were quite pleased, and asked me why.

“Because you only have to work one morning a week,” I replied. My parents were less pleased with that answer.1

I suspect that this is sort of what kids have in mind when they say they want to be social media influencers. They love being on social media anyway. The friends, the clicks, the likes, the funny videos, seeing and being seen–why not do it for a living? It’s hardly even work!

Do they actually say they want to be influencers? You bet they do. According a 2024 Morning Consult poll, 57% of GenZers say they would be a professional influencer if given the chance. 30% of 12-to-14-year-olds say they want to be a YouTuber, with the career path of TikToker coming in at a close second with 21% of the aspirants.2

You see, you ancient Millennial, different platforms constitute different professions. So you can’t just say “influencer.”

The survey says young people would be influencers if they were given the chance. But “aye, there’s the rub” as an old influencer once wrote. One problem with this line of work (and there are several problems) is that you’re never simply given the chance. Unfortunately for social media influencers, you have to build up a following over time, which means that it can take years to start getting paid.

What we’re seeing here is kids simply wanting to do what they know. If they know social media, they want to do social media. There must be a better way.

To find out that way, I sat down with a real, live influencer to ask some questions. Should young people actually aspire to careers on social media?

My source is Liz Thomson, the creator of I Heart Vegetables and a bona fide social media careerist. On her website, Liz announces that “my goal is to help people eat healthier and live happier! Healthy eating doesn’t have to be complicated or expensive.”

Liz says: “When I first started out in 2010, it was purely a hobby; there was no way to make money. It helped me figure out which parts I truly enjoy. I love photography and recipe development. By doing it over and over, I got better at it.”

“Sports is a good analogy because you can spend your whole childhood playing and never get a scholarship. But you learn skills that help you down the road. In content creation, you learn a bunch of skills around marketing, collaboration, and communication that can really help you.”

Besides, Liz doesn’t even think “influencer” is the best word if you’re doing it all the right way.

“I resonate with ‘content creator.’ not ‘blogger’ or ‘influencer.’ It gives more freedom than ‘influencer,’ and I want everyone to feel included,” she said.

“Thinking of it as ‘content creation’ makes it easier to get started because it lets you explore the things you’re interested in without pressure. I don’t think I made a single dollar for about four years, and I was blogging three times a week, every week. You have to really enjoy it if you want to spend the time.”

“Even if you don’t end up being a full-time creator, you may discover what kinds of jobs you’re interested in. You might be interested in writing, for instance. Creating content opens doors for new opportunities and can lead to a career down the road.”

Liz’s answer made me more positive about the idea of “influencing” than I had been before. Maybe that’s because I imagined it to be pure vanity: people prancing around on screen begging for “likes,” or maybe rotting their brains and eyeballs by never escaping the hall of mirrors that is social media. Liz’s principles made the whole enterprise seem more healthy, helpful, uplifting, and not so, well, solipsistic.

For me personally, writing Paper Robots has done just what Liz said it would: I’ve gained skills, connections, and learned about the kinds of work I like to do. I’ve gotten better at communicating a message. I’ve found new avenues to teach about economics and personal finance, which is what my day job is. So instead of being a pure grump about “content creation,” I’ve learned that having an outlet for one’s “personal brand” has a place in the modern economy. It gives you a chance to build a professional voice.

But there are wrong ways to do it. It’s the dark side of content creation that I’ll be writing about in the next Paper Robots installment in a couple of weeks.

Your pre-orders got “Teach a Kid to Save” as high as #26 on Amazon’s “School-age Parenting” list last week! It’s down to #204 now, but I’m still very proud. If you haven’t pre-ordered yours yet, now is the time to do it, here. Thank you, team!

Friends, here it is! I’ve written a book entitled Teach a Kid to Save: A Fun, Hands-on Approach to Building Smart Money Habits. It now has a cover design and is available for pre-order at Amazon, Barnes & Noble, Baker Publishing Group, or wherever you like to buy books. Go ahead and order one. It will ship on January 13.

Why isn’t it available before Christmas? My editor patiently explained to me that “people don’t buy self-help books for Christmas. They’re a New Year thing.” That makes sense. So if you are planning on panicking that you broke the bank Christmas shopping and want get a strong start next year, this is the book for you.

Or rather, for your kids, since they’re the main ones who are to benefit from the book.

Speaking of breaking the bank for your kids, there is a new survey showing that parents are struggling with debt. A reporter (Jana Pollack) for Parents.com reached out to ask me about the study and why parent debt is growing. Here’s what she wrote (click here for the full article):

National Debt Relief and Talker Research looked at financial pressures facing 2,000 US parents of kids ages 0-18. Their findings show that 6 in 10 American parents have gone into debt for their children. Of those, 81% prioritize paying for their kids over paying their debt, and nearly half say that their debt is unmanageable...

According to Dr. Stephen Day [of the Center for Economic Education] at Virginia Commonwealth University and author of "Teach a Kid to Save,” rising interest rates are one of the primary contributing factors to a rise in debt among parents.

“In the wake of COVID, we had a surge in inflation; and to combat inflation, the Fed raised interest rates,” he explained. “To the extent that people were already using debt, [for example] credit cards, that made the interest rates for those worse, and people just were not able to budget...”

In other words, many people planned to finance purchases with a certain amount of debt—but then all of a sudden found themselves with skyrocketing costs they hadn’t planned for.

Another factor is wages, which have not kept up with inflation. “Wages lag behind rising costs, and people fill the gap with debt—which suddenly has a much higher interest rate,” Dr. Day added.

The culture of parenting has changed drastically, too. It’s not just costs that have risen—expectations for parenting have also ballooned in recent years. More engaged parents combined with social media platforms that connect kids to trends that incite comparisons, embarrassment, and peer pressure if they don’t conform, has created an environment where some parents may feel as though they are actually required to spend any amount of money necessary to see their kids excel both socially and academically.

“If you look at the cultural shift in the past couple of decades, we just parent more intensively,” said Dr. Day, who cites that change as another factor which increases parents’ debt. Parents are paying for more sports team fees, more extra curricular activities, and any other extras that they think might boost their child’s development.

Studies back up that claim, and acknowledge that parenting today is harder than it was twenty years ago. Studies also confirm that social media creates added pressure to parent in a way that can sometimes feel competitive with those in your orbit (and beyond, with many parents seeing people they don't know on social media sharing their ideal parenting strategies).

Add to this the rising cost of childcare and the very high (though finally, blessedly stable) cost of college tuition, and parents are really in a fix.1

However, I think that parents are in debt for much the same reason that everyone else is. Wages have lagged a bit behind inflation for the past five years. To combat inflation, the Federal Reserve raised interest rates, sort of like how firefighters spray water on a burning house. The water stops the fire, but it still soaks and ruins your stuff.

When interest rates go up, debt is suddenly more expensive. Debt brings risk. It adds uncertainty to the future. We think that we have plans to pay it off, but if something unexpected happens – like a surge in interest rates – we’re in for a nasty surprise.

On the other hand, if you’ve saved up money, then higher interest rates help you. You get a better return on your savings. That’s why it’s better to give your monthly payments to yourself in the form of savings than to a bank in the form of interest payments. Buying with saved money not only gets you a higher standard of living in the long run, but it also decreases interest rate risk.

You can help your kids save by buying my book! Yes, I will remind you in future editions of Paper Robots. But now is as good a time as any to click that Amazon link (Or B&N or Baker, etc.) and pre-order. Then you can snuggle up with it on January 13 and make plans for the new year. Thank you!

In June, I had the privilege of traveling to Arusha, Tanzania with Mrs. Paper Robots and an Economic Education colleague, Chandler Jordan, and her husband, Keach. We went under the auspices of local partners Jifundishe (“teach yourself” in Swahili) and the Global Economic Education Alliance, which seeks to build economic education connections internationally. Our mission: to teach Tanzanian teachers and development workers how to teach about money. You can see our Day 1 video here.

Tanzania is much better off than it was 25 years ago. The standard of living has doubled since then, to $3,700 per person. That’s poor compared to the United States, but it’s not the grinding, “less than a dollar a day” poverty that Westerners have long associated with Sub-Saharan Africa. Extreme poverty has declined a lot globally over recent decades. This is one of the great blessings of modern times, and we should all appreciate it more. Tanzania is the most populous country entirely south of the Equator, with 67 million inhabitants.

When Chandler and I were putting together the curriculum to teach, we had to investigate what Tanzanians wanted from economic and financial education. We quickly bumped into one interesting fact: instead of using banks, many Africans save money with their cell phone company. Tanzania, like many countries with little capital development, doesn’t have many large institutions that people trust. But the cell phone company has it all: trust, a large pool of money, a system of credits and debits, and regular communication with millions of people. In Tanzania we had pretty good cell phone coverage wherever we went, including (and especially) the Serengeti. Phone companies there now allow flexible buying and selling of phone credits, to the point where they basically act as banks.

So we had to edit all our lesson plans so they simply mentioned “saving money,” rather than “put money in the bank.” We also removed exact prices from lessons and replaced them with, for example, “one week’s pay,” or “the price of one meal.”

How do Tanzanians invest in this economy? According to the Brookings Institution, “Africa boasts the world’s highest rates of entrepreneurship, with more than 1 in 5 working-age Africans starting a new business and more than three-quarters of the youth planning to start one within five years.” Small businesses are the main way that Africans invest. For them, investment and entrepreneurship are largely the same thing.

That’s good, right?

Not so fast. According to The Economist, “Africa has too many businesses and not enough business… Many Africans continue to see land and property as more reliable places to store wealth. Though the rise in fintech firms should make it easier to save, the shallowness of capital markets means there can also be a lack of investment options.” Sub-Saharan Africans have side-hustles, but that’s about it. But because of a scarcity of infrastructure, loanable funds, and capital, it’s hard to make a business grow.

So what do you teach in this situation? Chandler and I had to remove most of the references in our materials to stock markets. Our audience just didn’t have much access to those. In place of our usual teaching about stock index funds, we had to combine our lessons about saving, investment, entrepreneurship, and human capital development (education).

We also made lessons that were low-tech. We didn’t know if everyone would have an LCD projector or wifi access or the next EdTech product that American school districts are excited about (the ZiggleZabble app or whatever). We shared active-learning lessons that a teacher could do in 45 minutes with little tech. We used classic lessons like the CFPB’s “Bouncing Ball Budgets” and the Federal Reserve’s “One Hen.” I love these lessons and I’m excited to use the entire collection here in the States (email me if you want them).

Tanzanians have mostly the same desires for financial education that Americans do: they want their kids to learn to plan (budget), save, delay gratification, and be hard-working, public-spirited, and creative. They wanted young people to avoid scams and gambling and to embrace education, employment, and entrepreneurship, which, as we learned, doubles as investment in Africa.

The big difference in teaching about money in Africa was the financial system. I learned not to take our rich-world financial infrastructure for granted. Here, financial educators urge people to invest in low-fee mutual funds (e.g. index funds). That way savers become owners of many companies, not just one. With a stock index fund, you can easily open an account, link it to your bank account, and automatically debit savings to it. Markets have had a 10% average return for the last 100 years. This allows people to get high returns over time by spending less than they earn, and making sure the savings are automatically invested. That’s a recipe for long-term financial stability. We should appreciate it by using it.

Thank you for reading. Are you still here? You are? The article is over, but in case you’re interested, here are a few more highlights from Tanzania.

• Do you have thoughts or experiences to compare and contrast with my trip? Let me know in the comments.

• Our next-door neighbor in Arusha was Pete O’Neal, an expatriate Black Panther who hasn’t been back to the United States since he skipped bail on a gun crimes charge in 1970. We met his wife, Charlotte, who introduced herself by saying, “I’m Tanzanian, but I’m from Kansas City.” She welcomed us to the neighborhood.

• I took a walk by the University of Arusha, which was in our neighborhood near Jifundishe. There happened to be a college soccer tournament going on, and when I stopped to watch the game, a student tapped me on the shoulder and ushered me up to the trophy table to sit with the Vice Chancellor, the chaplain, and an Education professor. The Vice Chancellor was wearing a three-piece suit; I was wearing shorts and a t-shirt. They chose me as the honorary guest to hand out the trophies to the winning teams. As they brought me forward, the student section chanted “Mlete Muzungu!“ which roughly translates to “Bring the Gringo.” The rest of the time they spoke English.

• Tanzanians speak tribal languages at home and Swahili in primary school. High school is taught in English, though many don’t learn to speak it well. In college, instruction in English and all students are fluent.

• After the week of teaching we went on a Safari with Chandler and Keach. (I think “Couples Safari” sounds more fun than “couples economic education institute,” but you be the judge.) You can see our trip in this four-minute video:

• The Maasai tribe has decided not to modernize. They remain pastoral herders. Fascinatingly, you see their villages and herds scattered in between modern Tanzanian towns.

• The Maasai village we toured put on quite a show. They threw traditional cloaks on us and made us join in their bouncy dance (Keach was mortified). The kids sang songs and expected extra donations. They had a little shop full of what they described as “handicrafts made by the women here in the village,” but which were the exact same as the factory-made ones at the souvenir shops. It was kind of a hustle (see “entrepreneurship” above) but a good tourist experience, so we stayed in the spirit of things.

• The weather was wonderful, even though it’s near the Equator. It was 15 degrees (F) cooler than our hometown of Richmond, Virginia.

• Thank you to the wonderful family and friends who watched our kids while we were away. It was our 15-year anniversary, and it was a spectacular once-in-a-lifetime experience.

A few weeks ago Forbes did an article on financial education for kids. The article was entitled “Teach Your Kids About Money with these Ten Expert Recommended Activities.”

In this article I’ll grade the experts’ advice. This isn’t to be snarky or catty. It’s to clarify where current expert thinking excels and where it falls short. It’s also to show how my own thinking on teaching kids about money is different – which will be coming out in January in my book, Teach a Kid to Save: A Fun, Hands-on Approach to Building Smart Money Habits. The thesis of TAKS is that kids need opportunities to make meaningful choices about money over time. Those are the criteria I’ll use to grade these ideas.

All these ideas are helpful and I’m so glad that people are working in this space. But some ideas are better than others. Let me know if you would change any of my grades. Here goes.

Magic Kingdom role-playing game. “Together with your child, create a character who rules over a magical money kingdom. Talk about the choices this leader must make with a limited supply of golden coins. Options can include dragon rides, castle-building, education for kingdom residents or anything else. Let your child lead the story, as you ask questions about the long- and short-term benefits of each decision.”

Grade: C+. This could elicit fascinating conversations about money values. But I fear that unless you’ve been the Game Master a world-building scenario already, the lesson might get lost. Simplify the scenario with basic “what would you choose?” choices.

Coin-toss Challenge. Give small children a coin-toss challenge, in which they can try to throw coins into save-spend-give jars.

Grade: C-. The save-spend-give jars are great, but the activity doesn’t match the lesson. Instead, just allow them to make the real choice: should we save, spend, or share this money we just got? Sure, toss the coins; have fun. But the kids are ready to actually use the jars for budgeting.

Needs vs. Wants Flashcards. Show flashcards with pictures of things and ask if it’s a need or a want.

Grade: B-. At first I thought that kids already get flashcards at school; why would they want them at home? But then I thought: because they love to play with their parents, that’s why. I can see my six-year-old doing this activity with me for 10 minutes or so (but that’s it). Needs vs. wants can be a good rule of thumb for helping people make choices, but we should move on to teaching about goals and priorities.

Grocery Store Games: You’ve read ideas like these in previous Paper Robots posts, here and here. Ask the kids to help with the grocery list, the prices of various goods, and find where products come from, how big things are relative to their price, the choices we make between products, and so forth. The benefit is that these lessons are authentic.

Grade: Pass.

Compound Earnings Fitness Challenge: make your kids do squats or jumping jacks and point out how the difficulty compounds over time. Then tell them about compound interest.

Grade: Incomplete. This can’t be about earning compound interest because it gets miserable. You could make it about paying compound interest — you know, debt. But your kids would be in no mood to be told about compound interest by the time they were miserable enough to get the point, you drill sergeant! (“Kids, feel that stitch in your side? That’s how it feels to be in debt!” “Dad, that can not be why we’re doing this!”) Now, teachers could get a couple rambunctious high school boys to do a burpee competition in class as an illustration! That could be hilarious and instructive.

Compound Interest Blocks: demonstrate how compound interest grows by stacking up blocks. Both the base and the height must grow over time.

Grade: C. Kids who are old enough to learn about compound interest are ready for real numbers. Just show them the money, not blocks. There’s no substitute for the compound interest calculator from EconEdLink. Trust me, their eyes bug out when they see the savings grow.

Buy the Brand Game. If your child asks you to buy a branded product, the expert encourages you to “Try asking: Would you rather own the brand or just buy from it? The question encourages a perspective shift from spender to owner. Use these conversations to start a simulated portfolio, jotting tickers, prices and dates in a notepad or spreadsheet.”

Grade B. This gets a bump because kids really need to learn the perspective of a producer (i.e. investor or seller), not just a consumer. I think kids would be frustrated if they asked for something and their parent said “no, but let’s start a spreadsheet about something I want to teach you!” A simple tweak bumps it to an A: make a summer deal with your children that for a couple stocks for which they can track and explain its fluctuations, you’ll buy the products they asked for. (Sure, it's a spend, but it's a great way to get conversations going.)

Comparison Shopping Challenge. Let the kids help you comparison shop. Pretty straightforward.

Grade: A. You are engaging them in real-life money situations that they can understand. They know they are helping the family and adding their voices, not just playing a game.

The Lemonade Stand. Help the kids start a lemonade stand. You can enrich the experience like this: “encourage the kids to budget for ingredients, set pricing with profits in mind, make sales projections and calculate their results.”

Grade: A. The lemonade stand is the most classic part of financial education! The kids learn what it’s like to be on the other side of the counter. Their business choices matter.

Conversations to Teach Kids About Money. Involve your kids in real conversations about family financial choices. Not the really stressful choices; the kids aren’t grown-ups yet. Involve them in choices that matter and that are interesting without causing fear.

Grade A.

Summary: You see the trend? The better techniques are the ones that are closer to real life. Even with small children.

Too many of the experts rely on games that come with metaphors. The problem with this approach is that the games aren’t fun enough and the metaphors aren’t clear enough. By the time the kids get the game, they’ve lost what it stands for. Sure, do the games. But a simple illustration isn’t enough. The kids need ongoing modeling and practice.

Money is interesting all by itself. It reflects real-world choices. Kids need opportunities to make meaningful choices about money over time. Involve the kids in choices about money that matter to them, and they’ll become eager to pitch in their ideas. Best yet, you’ll model responsible decision-making that the kids can emulate.

Updates:

• Friends, Paper Robots is going on summer vacation. It will return in September with loads of new content. This blog has been going on since March 2024. Thank you all so much for reading and for being a part of the conversations that keep it going.

• Drop me a line in the comments or via email. I want to hear what you think. I will reply, seriously!

• This week I’ll be traveling to Tanzania with my wife to do a week-long teacher education institute for Tanzanian high school teachers–similar to what I do here in Virginia.

• Teachers can attend the VCU Center for Economic Education’s Mini-Economy Institute, July 29 and 30, or our institute on Econ in World History, entitled “Silk Roads and Sunken Cities,” which is (tentatively) August 5 and 6. You can also see pictures from our recent Mini-Economy Market Day here.

• Teach a Kid to Save is moving along. I’ve turned in final copyedits, and the cover art has been designed! Thank you so much for being a part of this journey.

Stephen