Grants Pass dad Larry Bolint has a checklist of what to teach his kids before they leave for college: good study habits; defensive driving; community service and financial health.
“We have to try to give our kids all the tools they need to become functioning, independent adults who have the financial wherewithal to be successful,” the retired engineer says.
Before he sent daughter Amanda, 19, to the University of Portland, he signed her up for classes at Rogue Federal Credit Union in Medford. He did the same with son Bryan, 18, to teach him about managing checking accounts, credit, savings plans and identity theft.
“Our kids got the theory of personal finance at school, but not the nuts and bolts, the street knowledge they needed to help protect them from debt or identity theft predators,” Bolint says.
Busy families sometimes neglect teaching kids about money management. But in Southern Oregon, parents have many resources, says Kerri Davis, RFCU community and education outreach coordinator.
“We teach our kids how to earn a paycheck, but we don’t teach them what to do with the paycheck once they get it,” Davis says. “The three messages of financial education are saving, sharing and wise spending.”
Parents can start teaching their children about healthy finances early with Web site games. At www.usmint.gov, kids can play Dollar Drive, for example, to collect the correct change and prevent an attack of a sea monster. At www.clubmoneymammals.com, kids can learn the difference between need and want from Joe the Monkey.
Another money-teaching tool for children is “The Money Mammal” DVD created by John Lanza of Los Angeles. Lanza and Davis developed a kids’ club for credit unions based on the DVD characters. RFCU launched its chapter of the club in February.
“It is never too early to start,” says Davis, who teaches financial seminars to children, teens and young adults in the Rogue Valley.
By the time kids reach middle-school, they are ready to learn about earning power, goal setting, smart shopping, budgeting and credit, Davis says.
One student in a seminar Davis teaches for 12-to-14 year olds caught on quickly and started saving for an Xbox game console.
“I almost have enough money to buy it,” says 13-year-old Kyle Zerger of Eagle Point, son of Karen and Chad Zerger. “I learned if you start now, even if it’s little, you can save for something bigger. My long-term goal is saving for a small truck that gets good gas mileage.”
For high-school students, Davis teaches checking account basics, electronic services, a simple spending plan and credit and credit reports. In a follow-up program for young adults aged 19-24, she adds a session about identity theft. Her older students get a credit or debit card so they can learn responsible use under their parents’ supervision.
“On your first day of college, you will be inundated with credit card companies everywhere trying to sign you up,” Davis says. “Credit card companies are not necessarily your friends in college.”
Do financial classes make a difference? Yes, according to a recent RFCU report. Since Davis started teaching classes in 2004, one out of 350 students had uncollectible debt in the amount of $1,264. But of the 2,600 young customers who have not taken Davis’ class, 51 had uncollectible debts totaling $200,000.
Davis is motivated to teach money management to young people partly because she spent 13 years of her banking career trying to collect and recover negative accounts. She offered financial counseling to many families.
“We’ve seen a rise in young people getting into financial trouble,” she says. “Parents are not real knowledgeable about finances so that leads to their children not getting enough information.”
And sometimes parental advice sticks with teenagers only after they hear it from someone else.
“When my daughter took driver’s education, they assigned a project about financing a car,” says Bolint, the Grants Pass dad. “So Amanda went to Rogue Federal Credit Union for the research and they opened up our credit report and said, ‘You should follow your parents because they are doing something right.’ We liked hearing that so we signed her up for the classes. It helped prepare her for college.”