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Finance Expert’s Books Teach Kids How to Be Smart About Money  

Sheila Bair uses illustrations and fun stories to demystify finance for children and the adults who read to them 

spinner image left books for children on understanding and managing money right author sheila bair
Albert Whitman & Company / Courtesy of Sheila Bair

During Sheila Bair's long career in finance, she was often struck by how many people were stymied by how money works. The former chair of the Federal Deposit Insurance Corp., Bair thought, Why not teach them economic principles while they’re still kids, so the world of finance might seem less intimidating as they grow into adults?

That was some 20 years ago. Bair — among the earliest to warn about subprime loans before the crash of the late 2000s — went on to write her first picture book, Rock, Brock, and the Savings Shock, about a grandfather setting up a savings plan for his twin grandsons. He says he’ll pay them a dollar a week to do chores. If they save that dollar, he’ll double it every week — but if they spend it, they only get another dollar.

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It was published in 2006 as the debut title in her Money Tales series, which now includes eight books designed for readers ages 7-10.

“One child of course saves and has this huge stash of cash at the end of the summer, and the other one just has a bunch of junky toys," says Bair, who lives in Washington, D.C., and has two grown children. “But one of my favorite parts of the story is when the saver is tempted to buy some expensive toy. And his grandfather explains the opportunity costs and how [the boy’s] savings will go back down and start doubling from that point. It was a good introduction to compounding interest, and the power of compounding.”

Her other picture books explore financial topics such as overborrowing, Ponzi schemes and the importance of reading contracts carefully.

New timely topics

She’s just come out with two new titles in her series:

Daisy Bubble: A Price Crash on Galapagos, is a story about animals who get caught up in a frenzy over daisies, sending the flowers’ price soaring, then crashing. It was inspired by a high-profile event in early 2021 when a large number of people — including many young, inexperienced investors — tried to cash in on a “short squeeze” of GameStop stock.  

Princess Persephone and the Money Wizards: Inflation Comes to Ganymede, features a princess who wants her friends to go on summer vacation adventures with her, but they can’t afford it. She orders wizards to make more money — which causes spending to increase, prices to soar, and supplies to become scarce. It helps readers understand concepts related to inflation, including supply and demand and consequences of rapid increases in spending.

How to teach your children or grandchildren about money

Adults can help kids learn about money in other ways, Bair says. For example:

  • When parents and grandparents give a child money — whether it’s an allowance or birthday present or whatever — they should automatically give them a little extra that goes in savings. Just build that in every time they get money, and earmark it,” says Bair.

She adds that she did that with her own children: “Nobody ever touched that, and once the money accumulated you took it to the bank where it was saved and hopefully got a little interest. That’s establishing that early savings habit.”

  • Buy them inflation-protected bonds (known as I bonds), to “help them understand the power of compounding interest, as well as how to protect their savings from inflation,” says Bair, noting that I bonds are paying over 5 percent interest right now.  
  • Look for situations where you can teach them about opportunity costs. “Whenever they want to buy something frivolous, ask them to consider how much they could earn over time if they invested the money instead in an interest-bearing bank account,” she suggests. Many banks are offering kids savings accounts paying nearly 5 percent interest, Bair adds. “Do the math with them, using one of the many compounding interest calculators available for free on the internet.”
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Bair has been contemplating another lesson she’d like to share with readers in the future. “I'd like to write another book for older kids called How Not to Lose a Million Dollars. You know, all these books on how to make a million dollars and how to be rich … that’s fine, but that’s not what I’m trying to convey. I want to help people steward their money. I want them to keep their money and I want them to grow it and I want them to have financial stability.”

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