The Hidden Connection Between Math & Your Child’s Future Bank Account

By Troy Makous, Owner & Director of Mathnasium of Pike Creek 

You will hear all sorts of content out there about the importance of financial literacy, something that is not taught in school directly. 

You will hear just as much out there about the importance of math, but most of the information on this is focused on math as a stepping stone: you need it to get good grades, you need it to develop critical thinking skills, you need it to get into college, you need it to get a high-paying job in STEM. 

Those are all true. Full stop. 

However…math is also about one of the most fundamental components of the human experience: money and finances. The connection between the two is something that we can feel, but it isn’t something we often explicitly talk about and strategize around. Let’s do just that. 

Mathematical Mastery Precedes Financial Literacy

“I can’t believe they don’t teach financial literacy in school.”

Same. 

But also…they kind of do, or at least they lay the groundwork for it and that groundwork is math. 

When you think about what financial literacy actually consists of four things: managing money, budgeting, saving, and investing. Every single one of these topics requires number sense. You must be strong in addition, subtraction, multiplication, division, place value, fractional reasoning, proportional reasoning, and a litany of other skills mostly derived from the seven previously mentioned. As you start to get into more advanced financial literacy, exponents and algebra are needed. Critical thinking--something built from math--is always needed. 

For this reason, I am genuinely heartbroken when I hear adults say, “Kids don’t need mental math. They have calculators. They have Excel. Math is not that useful anymore.” When parents and adults say this to me, they are revealing that they themselves are almost certainly not financially literate, because financial literacy is both a skill and a way of thinking about and existing in the world. 

No matter how good you are with a calculator or how good you are with Excel, you cannot confidently work with numbers without a strong sense of numbers. In fact, being good with a calculator and Excel depends on how good you are with numbers. 

So where does math end and financial literacy begin? The truth is they are both two wings of the same bird. Without math, there is no financial literacy. Without money, there is less practical application of math in most adult lives. The juncture between the two of them is percentage. While it is a math concept and skill in and of itself, it is where math becomes real with money; it is where things like interest can make or destroy a future. It is where allocation of budget requires proportional knowledge. It is where simple daily realities like getting a good deal or paying taxes are quantified and understood. 

When you think about percentage itself, it is the culmination of many different forms of math literacy: proportional reasoning, place value, division, fractions, multiplication. These concepts begin when your child is in second grade. Unfortunately, they do not just “click” with time. Even if they were to somehow click, by the time that happens, the student already has a bad relationship with a very learnable skill and that attitude becomes the greatest challenge to development of the skill of math. 

In other words, by ignoring math issues when your child is seven years old, you are risking lifelong financial challenges. Much more is at stake than just bad grades or being behind in school, and there is a much smaller window to handle it in the first place.

How to Ensure Number Sense 

Firstly, number sense is not a personality trait. It is a skill that–-barring severe disability–-can and should be developed at an early age. While some kids are more predisposed to number sense than others, there is exactly zero scientific evidence suggesting that someone is a “math person” or “not a math person.” That self-fulfilling myth is one born of our own societal failing to make sure all kids can interact with the world through numbers. What can you do?

1. Change your tune about math 

With that in mind, the very first thing you need to do to ensure number sense in your child is to monitor the way that you talk about math and numbers. Since kids see their parents as infallible, especially at a young age, hearing that mom or dad isn’t good with math is a free pass for them to not even try to be good at math. For your own sake, if you are not good at math, know that this is a result of your education and not a result of your genes. The same is true for your kid, so break the cycle. 

2. Make numbers and money a conversation at home 

A lot of parents incorporate numbers into conversations with their children but just as many do not. Very few talk openly about money, which is a shame because money should not be taboo in the family. Of course, sharing financial stress with your children is not what I am suggesting, but talking to them about how much something costs anchors them in the reality that they are going to enter as they become young adults. 

When you are paying a bill, or making a recipe, or filling up the gas tank, talk to your kid about it. Numbers are meaningless until meaning is assigned and use is made relevant. I assure you that this will not happen only in school; it is on you to make it a part of all of their life. 

3. Evaluate number sense professionally

For families considering Mathnasium, we have the student take a free math skills assessment. Before we even have them put pencil to paper (or stylus to iPad), we assess them for their number sense via mental math. By the time a child is in third grade, they should be able to count from any number to any number by any number. Can your child do that in their head quickly and without using their fingers? If not, the number sense needs work. 

Evaluating number sense is not particularly difficult but it is easy to not get the full picture. That is where a professional comes in, which is why we offer this assessment free of charge. Parents should have a professional diagnosis of their child’s number sense. If you’re interested in booking a free skills assessment, you can do so here. 

How to Incorporate Money into Their Life

Beyond number sense, money itself needs to be a part of every child’s life. This need is a bit more complicated than it was when you and I were kids, because money is much more abstract than it once was. Coins are not functionally useful and money is mostly stored on the internet rather than in physical currency.

April is Financial Literacy Month, and as such, we made making change a part of every student’s daily math routine at Mathnasium; we call it their verbal warmup. It was truly shocking just how many young kids didn’t know how many pennies make a dollar, how many older kids didn’t know what making change is let alone how to do it, and how foreign the use of coins felt to many of these students. 

As a result, I asked three of our instructors who are current students at UD their thoughts on the matter. Mind you, we have a very rigorous hiring process that includes a math test that 80% of applicants fail, so these are extremely sharp mathematical minds which is probably why they are all studying STEM. Interestingly enough, when I asked them how their parents made sure they understood money, all three of them told me that their parents required them to use cash. Whether that choice was intended to teach or not, I do not know, but it is certainly telling that the use of cash correlates with extremely smart math minds among Gen Z people. So the advice is simple: use cash with your kids. 

In addition to that, encourage—or engineer—the use of coins. Even though they are not that functionally relevant anymore, they are potent tools for ensuring the understanding of place value and subtraction. 

Lastly, build a system of allowance. The great debate of allowance probably will never go away but regardless of one’s stance on it, the intention behind allowance should not be so that your child has money. It should be that your child understands money. Learning the lesson at an early age that money can be spent once and then it is gone is quite valuable. 

If you are feeling really ambitious, build in interest to the allowance, so that they learn that money saved creates wealth. 

At Mathnasium, we have an incentive system that functions like an arcade. Kids do math and earn star cards for their work. They can cash those cards in for rewards, or they can save them. More expensive rewards such as gift cards, giant squishmallows, and an iPad, are discounted versus the dollar, compared to the cheaper rewards like candy. Additionally, they earn monthly interest on the star cards that they save. 

While our currency is star cards and not the US Dollar, kids are learning about money, saving, interest, and value. Do something similar with your children’s allowance.  

How to Develop Financial Literacy That Serves Your Future Adult Children

Beyond the core math number sense and the use of money, help your child understand how money works when they start to reach adolescence. Here are a few key considerations and recommendations: 

• No plastic: Do not get them a credit or debit card until they fully understand and can use cash. Only then will they comprehend that a card is real money. Credit and debit cards are abstract for many adults—as evidenced by some of the credit card debt crises among the American adult population—so it is even more abstract to a child or teen who doesn’t understand cash. 

• Paystub knowledge: Once they reach an age to work, teach them how to read their pay stub. Help them understand their taxes. Make sure they recognize that money earned is not money received and that the percentage differences make a massive difference in the long run. 

• Do not bail them out: Let them run out of money. It is sad to see them suffer, but letting them suffer today is far less harmful than letting them suffer as adults in debt. 

• Teach them core skills: They should be able to build a budget, balance a checkbook, understand APR, and forecast interest on high yield savings accounts. Help them know how to do all the things that you do as an adult. They will either learn it with you, learn it by choice later, or not learn it at all.

• Keep talking about money: Keep discussing money no matter the age of the child. Even consider bringing them into financial conversations to the extent that you are comfortable. Talking to your child about college from a financial perspective is a kindness, especially if loans are involved. Don’t make talking about money taboo unless you want them to think money is taboo. 

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All said, children need multiple sources of support to develop into financially savvy adults. Their education is a part of it but their parental guidance is a bigger part of it. Make numbers and money a part of life and you will raise children who know how to navigate the future better than most. 

And remember: any kid can be a math kid and any person can be financially literate.