Recently, I had the pleasure of sitting with 60 local high school students to talk with them about the importance of good credit, how to establish credit, and how to avoid major pitfalls. They asked some good questions and I hope that this wisdom serves them well in the future (crossing my fingers – teens listen, right?). After the session, one of the teachers commented that the presentation was the most comprehensive lesson on personal finance that these students have received. I was pleased that he thought my presentation was thorough and helpful; however, as I drove back to the Credit Union, I thought, “how are our young kids learning all this stuff?” If this information isn’t part of their daily curriculum, are they learning it at home?
I shared my story with them. I was 18 years old and foolish with credit. I quickly racked up four credit cards in the Portland Mall because I was offered a great deal of 30% or 40% off if I opened a charge account. How could I go wrong with that? I’m saving money, right? (Insert BIG, GIANT buzzer sound here!) It didn’t take me long to run up high balances, miss payments or only pay the minimums because I could barely make my car payment, insurance, rent AND all the payments. Ugh! I was in hot water up to my credit card purchased earrings and I had to go to my parents for help. Let’s just say I still remember that conversation today and the look on my father’s face….one of disappointment. That was worse than anything he could say. It took me a long time to dig out of that debt and years to repair what I had done to my credit. The debt lasted longer than any sweater, purse, or pair of jeans did.
So, what’s my point here? Talk to your kids about money. Tonight. Pull up a chair after dinner and talk about needs versus wants, creating a monthly budget, how credit works and how to keep it good. Use real-life examples from your household. Encourage them to attend one of the upcoming Credit Union Financial Fitness Fairs that travel to their school. Here’s a link to the schedule: http://www.mainecul.org/community-involvement/financial-education-and-resources/financial-fitness-fairs/. Even before I worked for New Dimensions FCU, I fell in love with the Financial Fitness Fairs; it’s similar to the game of LIFE. Students are given a career and monthly income and then have to visit booths associated with various expenses that the average adult is faced with each month. Costs, such as transportation, housing, clothing, food, student loans, insurance and several other everyday expenses, are filled in on a monthly budget form by each student. At the end of the event, the goal is for students to have a monthly budget that does not exceed monthly income. I particularly love “the wheel of misfortune” where the student may encounter unexpected expenses like broken glasses, speeding tickets, a damaged tire and more. They need to fit that extra expense in their budget. Oh, the looks of horror on their little faces are priceless. By the end of the event, I hear students saying things like “man, life’s hard” or “no wonder my Mom flips out when I ask her for money all the time” or “I plan on living with my parents until I’m 50.” To which I reply, “yeah, good luck, kid…I tried that with mine and they didn’t go for it!”
Benjamin Franklin once said, “Tell me and I forget, teach me and I may remember, involve me and I learn.” – I think Mr. Franklin hit the nail on the head.