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Thursday, Mar 28, 2024

From the Mouths of Babes: Economics 101

From the Mouths of Babes: Economics 101 By MICHAEL HART Staff Reporter The homework assignment dovetailed beautifully with the lesson plan in a fifth-grade class at Kester Avenue Elementary School in Van Nuys one day last month. The assignment had been to do some price comparisons at the grocery store. Anna Treybich dutifully reported that Ralphs’ version of Cocoa Puffs was a better deal than General Mills’. Kirby Shaw noted that a roll of Bounty paper towels was $1.39 while Ralphs’ brand, Green Forest, was $1.19. With that bit of real-life experience under their belts, it wasn’t hard for their teacher, Mel Kohn, to lead them gently to the conclusion that Vons’ creamy peanut butter was preferable to Jiff’s, even after they’d passed samples of the two around, noting the color, label and price. In fact, a show of hands revealed that 23 of Kohn’s students would rather buy Vons’ brand while only three were willing to pay a little more for Jiff’s. The classroom exercise in shopping habits was a bit of a break from the kinds of subjects fifth-graders spend the bulk of their time on. That, however, wasn’t the only unusual thing about it: Kohn isn’t really a fifth-grade teacher. He’s an accountant, a partner in the Encino firm of Kirsch Kohn & Bridge LLP, only moonlighting briefly in the classroom. Kohn and several of the associates at his firm have taken on a program called KiddAccounts that puts them in elementary schools from time to time with a series of classes designed to help children begin managing their finances early. “It ties in to what we do in our company anyway,” said Kohn of what he views as the kind of thing accountants should be doing: community service related to their profession. The accountants at Kirsch Kohn & Bridge have a three-part course on money management for elementary-school age kids. The point, Kohn said, is to get them started thinking early that there are other things to do with their money besides simply spend it. “They’re really just going through the beginnings of financial planning,” Kohn said, “which is learning how to allocate your funds.” In their first appearance in the Kester Avenue school, Kohn and his colleagues talked about the different ways students could divide up their dollars: by saving them, giving them away or, of course, spending them. In the second session the class’ regular teacher re-emphasized the concept of saving and finally the accountants returned to talk to students about spending. The essentials of KiddAccounts were hammered out seven years ago by partners at a Santa Rosa accounting firm, Linkenheimer LLP, who were looking both for a new way to market themselves and a community service project that was somehow relevant to what they were doing in their professional lives. Steve Miksis, CPA and a manager with Linkenheimer, took the lead and found the program did both: it satisfied his desire to help others and it managed to provoke enough local media attention that his firm wound up with a few new clients it might not have otherwise snagged. Next, he developed a slick-looking curriculum including a character called Lester Lynx and began licensing it to other accounting firms like Kohn’s. Initial licensing fees run from $1,000 to $3,500 with annual renewals in the area of $250 to $875, depending on how involved the accounting firms get. Kohn learned about the Santa Rosa project and, after being principal for a day at Encino Elementary, talked that school’s real principal into letting him try it there. That led to a small mention in the L.A. Daily News, which in turn led to the gig at Kester Avenue. “It’s a piece that maybe in school we don’t always address,” said Kester Avenue principal Sandi Barrett, “how to spend money and how to save it.” And, since kids in the United States between the ages of 6 and 12 spend about $24 billion every year, it’s a piece that’s worth considering. Apparently it’s not just the cereal and peanut butter makers, video game developers and toy manufacturers that know about that figure either. Banks are tailoring accounts and products for children and dozens of companies now market financial management curricula on the Internet similar to Linkenheimer’s. In 1996, the California State Legislature mandated that all students have at least a semester of money management before they graduate from high school. That mandate was not accompanied by funding or penalties for non-compliance, so school districts have not exactly rushed to recruit economics teachers for the elementary school-age crowd. But there have been inroads, according to Paul Richard, executive director of the San Diego-based Institute of Consumer Financial Education. “It’s been 20 years of work to get into the schools to show kids that these issues have an impact on their lives,” Richard said. “Parents don’t always do it because they’re not confident of their own ability to manage their money. The consequences of not doing it is that there’s just an awful lot of debt out there and an awful lot of bankruptcies right now.” Washington Mutual Bank recently opened the latest of a series of retail outlets at its Encino branch called the Pig Store, featuring a mascot called Pixie Pig, with books, games, backpacks and, yes, piggy banks all with the intention of drawing young customers and their parents. It also has a program that offers savings accounts for students at some Valley schools that allows them to make deposits or withdrawals on their own campuses. Christine Campbell, Washington Mutual’s West Valley regional manager, said, “If you look out there, we find a lot of our customers who don’t know how to save, maybe don’t even know how to balance a checkbook. “If we can help some of them become better educated, they’ll be better savers when they grow up.” And in the short term, she said, “We don’t track this directly, but parents do bring their kids in to the Pig Stores. So we got some business from the parents because of it. And, of course, a lot of the kids end up staying with us as they become grown-ups.” Back at Kester Elementary, the price comparison lesson had gotten a little more complicated. Kohn passed around bottles of Heinz Ketchup and Vons catsup. The spelling wasn’t the only distinguishing element. One student noted Heinz had 15 calories per serving while Vons had 20. Another realized an apples-to-apples comparison would be out of the question this time since the Heinz bottle had 40 ounces and Vons only 36. Chloe Wright looked very closely at both labels and announced that, with Heinz, “If you don’t like it, you can get your money back.” The ever-watchful Anna Treybich saw that, according to the Heinz label, “The company’s been around since 1869.” Everybody then looked, without success, to see if there was any indication as to when Vons had been founded. In the end, the vote was Heinz 22, Vons 4. The clincher? Heinz, even if it costs more, offers a deal on a Grinch watch if you mail in a coupon. Kohn said, “They’re trying to get your $24 billion, aren’t they?”

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