This special series is as part of CentSai’s commitment to financial literacy at every level. We’re collaborating with financial education advocate Sam X Renick financial education advocate Sam X Renick on a series of short interviews, videos, and tips. In this installment, Derek Lundsten, CEO of the mobile learning enterprise Scrimmage, tells Renick some of his childhood money lessons and shares advice on teaching kids about money.

Derek Lundsten discusses money lessons
Derek Lundsten

Childhood Money Lessons

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

Derek Lundsten: There were two significant lessons for me. The first was when I was about six or seven. I found a metal cashier's box in the basement of my Oma's (mom’s) house. It had a place for different kinds of coins, as well as for locking up cash.

I asked my parents what it was, and they explained the concept of saving. I transferred all my piggy bank money into this box (which was in my nightstand drawer) and every bit of money I received went into it. My parents jokingly referred to it as “The bank of Buster — deposits only, no withdrawals.”

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The second lesson happened a few years later. I was riding my bike and came across four twenty-dollar bills lying in the street. I felt like I hit the lottery! I ran home as fast as I could. My parents explained that I found this money and there was no wallet or indication of whom it belonged to. They said the money probably was “lost” by someone, but I could keep it.

They asked me what I wanted to do with the money. Without hesitation, I said I wanted to take my family to dinner at a nearby restaurant.

I instinctively felt that since it wasn't “my money,” it should be shared. So I did. It is a meal I still remember fondly.

The Value of Money

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

Lundsten: The above-mentioned incidents taught me about the ”value” of money, as did one other experience. I was about eight years old, and at the New Jersey shore. My parents gave me some money to buy lunch at the nearby snack stand. Next door was a restaurant where my grandfather and I would sometimes go for breakfast. So I decided to get lunch there instead of the snack stand. I was quite independent. I had a cheeseburger and soda.

When it came time to tip, which is something I had watched my elders do, I didn't know how much to leave. So I asked my waitress. She thought I was quite a precocious kid and said a quarter would be fine. So that's what I did.

When I returned to my family, they were quite concerned I had been gone so long. They asked where I'd been, so I told them the story. My dad walked me back to the restaurant, and we left a two-dollar tip. That taught me how to calculate percentages. It also taught me how good work equals more money.

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The Most Important Money Lesson to Teach Kids

Renick: If you could teach a child only one money habit, what would it be?

Lundsten: The relative and perceived value of money. And, I would also teach children that money is a tool, not an end in itself. Subsequently, I would discuss consumption and leverage.

Money Mistakes

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

Lundsten: Being oblivious. I didn’t ask enough questions to understand things like the difference between investments versus savings.

Smart Money Decisions

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

Lundsten: Saving.

Teaching Kids About Money

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

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Lundsten: We've been conditioned to be consumers, not investors.

We focus too much on what we lack rather than on abundance — what we have and how to multiply it.

Also, I think many people have an unhealthy relationship with money. They have inherited bad habits. My daughter is six months old and we are already giving her “lessons” about money.

Derek Lundsten: Learning to Save With the 'Bank of Buster'. Derek Lundsten, CEO of the mobile learning enterprise Scrimmage, talks childhood money lessons and shares tips for teaching kids about money. #moneylessonsforkids #moneylessons #personalfinancePersonal Finance and Schools

Renick: Why do you personal finance should be taught in schools?

Lundsten: Yes, personal finance should be taught in school. But. I believe our entire educational system needs an overhaul. We live in different economic, technological, and geopolitical times than when the current system was created.

What If the Research Is Wrong?

Renick: Cambridge University research indicates adult money habits are set by age seven. What if the research is wrong and these habits are formed earlier, perhaps around the age the “give mes” set in? What would this mean for families, schools, and the financial education industry?

Lundsten: As shared earlier, start the financial education process early. That is what my wife and I are doing with our child.

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Final Thoughts

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

Lundsten: Thanks for the introspection. It will help me be a better parent.

Take Action

Have a talk with your children and discuss the difference between saving and investing.

Discover more about Derek Lundsten at the Scrimmage website.