Thursday, January 17, 2008

A Tale of Two Families

I was standing in a bank lobby the other day and was struck by two conversations I overheard.

The first began with two parents and their little boy who was about five years old. As an advocate of personal finance education I was thrilled to observe the parents patiently showing the child how to fill out a deposit slip. While they stood back a little bit, the boy shyly approached a teller and presented his deposit slip.

After making the deposit, the teller showed him how to read his receipt to make sure his money had been deposited correctly. She then asked him what he planned to do with his money. By this time many eyes in the bank were watching the little boy and all probably expected a typical child's response--a bicycle, a skateboard, perhaps a future car. Not this young saver! He very assuredly explained he wanted to save enough to invest in a mutual fund!

At another counter, a middle-aged woman was asking a teller to check her account balance. Once the parents with the child had left, this woman loudly expressed her opinion: "How ridiculous! Children that age can't understand money."

Standing behind her, I couldn't help jumping into this conversations and saying that young children can and do understand money. I explained I was a teacher and that I often have young adults in a a community college class who are experiencing the negative results of no parental instruction--large debts, poor credit histories, etc. I could see my argument had fallen on deaf ears and finally gave up.

Now it was my turn to approach the teller who had helped the women. The teller very quietly confided to me. The woman regularly visits the bank to get her balance versus calculating it herself. The teller went on to tell me another interesting bit of information. The woman has two sons of her own. One is 22 and the other is 25. Both along with a girlfriend still live with mom. They have never been able to figure out how to be on their own financially.

Wouldn't it be wonderful if all parents were like those teaching the little boy? Unfortunately, this is not the case. Many parents do not have the time or skills to teach their own children. The woman represents a worse case scenario. A parent who does not recognize the importance of financial literacy. She and her children are certainly experiencing the consquences.

Wednesday, January 16, 2008

19 Year old wishes she learned more in school

The article below about a 19 year old Plymouth resident who wishes she learned more about money management in school demonstrates the need for financial education. You can also read part two at tangentlife.com

Jasmine Millwood: Lessons Learned about the Cost of Living … Part I
Written by Deb Madonna
Thursday, 10 January 2008

I cleaned out my car yesterday and my uncle happened to notice several empty Starbucks cups and high-amount receipts from Target. I continue to vacuum and such when he shakes his head and walks inside.

In confusion I say, "What was that about?" He says, "Yes you seem like a really broke college student who eats nothing but ramen noodles," in a low voice dripping with sarcasm. I thought to myself, he is right.
What am I going to do when I move out? I should start saving, big time. Because little did I know, the real world is a lot more expensive than I thought.
You always hear the jokes about how parents start saving for their children's college funds when they learn they are pregnant. But in reality, it's much more complex than that. My dear cousin bought me this book for Christmas, "The Young, the Fabulous and the Broke." This is what I should be. Instead I'm wearing the latest fashions from Twelve Oaks and splurging and Max N' Erma's Once a week with my friends. Although I work three jobs, some large percentage of my paychecks should be directly deposited into my savings account for the grueling days of unemployment and never ending study sessions.
You could take a random survey in the high school and ask the students all about credit and checking accounts, interest and APR. You could ask, but probably not receive any answers. Thinking back to my high school years, which weren’t so long ago, I think how my perspective on money and finances was so miniscule and narrow-minded. Obviously, my uncle was the source of most of my monetary needs however I did start working a part-time job at the youngest age possible, fourteen years and nine months old. With a workers permit from my school's counseling office in hand and a big gleaming smile I set off into the crazy world of long hours, that glorious payday and the grueling taxation you can never escape from.
I am thankful for my early working experiences, I learned so many things about the professional world; commitment, responsibility, punctuality and employee expectations. My uncle always made it clear that school was above work, because without school you good work is hard to come by in this world. I started a savings account and adding some of my paycheck every week. I got my first debit card when I turned 16 and became open to a whole different animal. I learned about NSF fees and available balance.
Although I have gratitude towards my past monetary experiences I wish someone would have sat me down at that perfect age where I could begin to comprehend how important good credit is. I wish I could have learned more in depth about interest rates, budgeting and everything else for that matter. I unfortunately learned the hard (and extremely expensive) way.
In my opinion my generation, due to the easy access to pretty much everything, is very impulsive. Too impulsive. We want something, we go get it.
If I could lend advice to my fellow young students and friends about money, I'd give you four pieces of advice.
1) Never, EVER lend anyone money. You might as well wrap it up and put a big bow on it as you give it away, you'll never see it again.
2) Credit cards are for emergencies and essentials only, not splurging. Examples: Gas, oil change, groceries. Not examples: Twelve Oaks shopping spree, Max n Erma’s once a week.
3) Make sure you know what an available balance is: the money that is ACTUALLY in your checking account. Keep a checkbook if you need to!
4) Save, save save. It is the best thing you can do. Keep saving. You can never have too much in your savings account.
College is not cheap, one must realize. To complete my career aspirations, I have about $66,000 more to fork over to my institution of choice for my remaining baccalaureate and the final stretch through dental school. College costs rise more and more each year. This year, average college costs have risen 6.6% than that of last years alone. How's that for some apples?
And don’t forget your studious hard-working pupil needs transportation, car insurance, a cell phone, health insurance. Sit in math class for a minute and crunch those numbers. I don’t know how my uncle does it.

Monday, January 7, 2008

Congratulations on your blog! This can be an effective tool to share information, ideas, upcoming events and other activities designed to help improve the financial literacy of kids in your great state!

As we begin 2008, please remember that April is Financial Literacy Month through the United States so keeping the Michigan Jump$tart Coalition updated on public events and educational programs will be a great way to get the word out with one voice. Given the wobbly condition of our economy right now, financial education is certain to become part of the dialogue as we proceed to the end of this century's first decade.

Daniel Hebert
Northeast Regional Director
Jump$tart Coalition

Thursday, January 3, 2008

Michigan Youth Financial Educators Win Awards

Michigan Youth Financial Educators win awards! Below is an article from the Michigan Credit Union League. Check out the video clip to hear more about why helping youth learn to handle finances is "Taking Charge of Michigan's Financial Future!"


MCUL/FIC Youth Achievement Awards Presented (Includes Video)
The Family Involvement Council proudly presented two credit unions with first-place plaques for their involvement with youth. MCUL Public Affairs Director Mike Bridges attended the Metro West Chapter luncheon Dec. 10 and handed out the hardware.
Natalie McLaughlin of Community Financial Members FCU (MW) won the Youth Involvement Award. McLaughlin is the education partnership coordinator at Community Financial and has been instrumental in its student-run branches. She said the credit union began making youth a priority in its operations 16 years ago.
Michael Poulos, president/CEO of Michigan First CU (MW), accepted the Generation Next award. Michigan First CU has 10 student-run branches. Its program began in earnest about seven years ago and Poulos said he hopes to double the number of student-run branches in 2008.
To view a video clip of the presentation and hear from both Poulos and McLaughlin click here: http://support.cu-village.com/MCUL_Email/lt/t_go.php?i=203&e=Mzk5MA==&l=http://www.youtube.com/profile--Q-user--E-MCreditULeague.