Merit Badge Clinic: Dollars and Sense

The Personal Management Merit Badge is the best lesson in what money can buy.

In the decade or so that he’s been teaching Personal Management merit badge, Ted McLaughlin has seen his share of glazed eyes and blank stares as he’s talked about terms such as compound interest, mutual funds, and return on investment. But the Minneapolis Scouter knows just how to get the attention of a group of Scouts: hand them his credit cards.

“The moment you hand them a credit card, they come to life,” he says. And as he reels off each card’s credit limit, the Scouts quickly spend that money in their heads—on Xbox 360s, iPods, cars, and other toys.

Then McLaughlin asks a simple question: “How many of you thought about how you were going to pay for that?”

When he has their attention, McLaughlin helps the Scouts work through some calculations, figuring out what happens, for example, when someone only makes minimum payments or gets hit with a late charge or a higher interest rate—all concepts related to requirement 7.

“The best part is when boys realize, ‘We’ll never pay that off,’” McLaughlin says. “That’s the point I try real hard to drive home to them.”

Craig Lincoln, a merit badge counselor from Joliet, Ill., takes a similar approach to requirement 6, which covers ways to invest $1,000. Rather than start off with long-term goals like retirement, he focuses on the Scouts’ own lives. “If you had $1,000 and you wanted to save it, what would you be saving for?” he’ll ask. “Would you be saving for college? A car?”

Once he and a Scout have discussed ways to save for short-term goals, Lincoln can talk about goals with a longer time horizon. “The thing that makes a CD or savings account the best option for saving for a car two years from now might not be as good an option for something really long term,” he says.

It’s also important to tailor examples to each Scout’s family situation, McLaughlin says. He works with two troops—one made up of middle-class suburban boys and the other of second-generation Americans living in cramped inner-city apartments. The former Scouts might plan a trip to Disney World for requirement 1 (develop a plan for a major family purchase), while the latter Scouts might talk about buying a new refrigerator. “The kids from the immigrant families aren’t going to Disney World,” he says. “That’s so pie-in-the-sky that they can’t even relate to it.”

Both McLaughlin and Lincoln often teach Personal Management at merit badge clinics. Although settings like that can make it hard to tailor the material to individual Scouts, they offer other benefits, Lincoln says. “It’s really fun to share ideas and talk things out. A group setting allows Scouts to learn not just from a counselor but from one another.”

Lincoln is also a strong proponent of using the buddy system for this badge. “Part of what makes Personal Management hard is that you feel so isolated,” he says. “It’s 90 days of you doing something on your own, and that’s hard.”

When Scouts buddy up, however, they can hold each other accountable as they track their income, expenses, and savings over 13 consecutive weeks (requirement 2). Each Scout must be reviewed individually on all of his progress, of course, but he’s more likely to finish all of the merit badge requirements when he works with a buddy. “Life’s better when you do it with a friend,” Lincoln says.

And so is Personal Management merit badge.