Wednesday, July 22, 2015

Financial Curriculum for teens

Last summer, I had a "Financial Curriculum Summer Camp" for my sons during the week my husband went off to the army.  We looked at budgets, made shopping lists, did actual grocery shopping (the hard, scary part for my teenage boys -- go figure!), and checked out apartments on Zillow.  It was a good week in many ways, but it was definitely a homemade kind of camp, and so it was fairly limited in scope. And of course, it also suffered from coming from their mom, who is a MiserMom, so when I say things like "don't spend more than you earn" -- well, that advice/opinion must just be total mom-quirkiness, right?

This summer, I decided to follow a suggestion from Michelle Singletary (author of the nationally syndicated Color of Money) who recommended for teens.  And boy, am I glad I did!

Okay, first I'm going to admit that when I announce that it's "Foolproof Time", I get the heavy sigh and rolling of eyes.  The boys start asking, "How long are we going to do this today?".   It's not happy dancing oh-boy-oh-boy-oh-boy response, like I get when I tell them we're going to the library to do computer gaming workshops.  This is just about as much fun as teaching kids to cook:  you know the payoff will come eventually, but it's not here yet.

On the other hand, there are definitely parts of FoolProofMe that the boys like, and they're learning a boatload  of stuff.  For example, there are quizzes at the end of each module, and J-son in particular totally gets into those.  The videos and stories are cute. Just now, I asked N-son what he thought about it. He said, "Now that we're growing up, we're learning how to save money.  I didn't know what bouncing a check was. I'm looking forward to working with my credit union."   J-son said he learned that he could go to the bank and get a checking account.

Okay, so what's FoolProofMe?  It's an on-line financial curriculum put together by some nerdy-cool young adults, mostly from Denmark.  The curriculum consists of about 16 modules, each of which alternates between stories, videos, facts, and brief fun-breaks for irrelevant games (web basketball!  The boys liked that!).

The educator in me especially likes the stories, because I know those are good for learning how the information might apply to my boys' own lives.   For example, one of the first stories was from a young woman who bounced a check for take-out pizza.  She then ignored bank statements, and then ignored envelopes from some address she didn't recognize (the collection agency), and then ended up owing something like $500 because of her pizza mistake.  [Okay, plus all the other mistakes . . . but the moral was that bouncing checks is bad.]   Another story described a guy who paid off his credit cards with other credit cards . . . until he couldn't, and how years later, even when he had a really good job, he had a sucky mortgage rate because of those early mistakes.  These are good stories for my kids to hear before they have to start making their own decisions.

The first few modules were basically on "don't make stupid mistakes", with lots of explanation that your credit score matters a lot.  The third module was on what your credit report means; the fourth module -- which we've just started -- is on what a checking account is, and why you'll need one.

I mentioned that each module ends with a 20-question quiz.  I'm really proud that my boys have managed to get 100% on each quiz so far (and sometimes, there's a lot of debate about which answer is correct before they finally choose the right one, so I know they're thinking hard).   Just to give you a sense of what they're grappling with, here are two of the questions from the third module.  You can see that this is definitely more intense than a homemade MiserMom camp!

Which of the following statements about your credit report is most accurate?
A. All credit reports are the property of the U.S. Government and access is only available to the FBI and lenders.
B. You can only check your credit report if you are turned down for credit based on a credit report.
C. Your credit report can be checked once a year for free at the major credit reporting agencies.
D. You cannot see your credit record.

Your credit score rules your life - that's reality. Which of these statements is not reality?
A. The lower the credit score, the greater chance you have of being ripped off when it comes to the rate you will pay for everything.
B. If you are from a low-income family, your chances of being hurt because of risked based financing are a lot greater simply because you are from a low-income family.
C. You make payments on time but they do not help your credit score because your payments are being made to a "rent to own" company.
D. You can ignore your credit score, and won't be hurt by doing so.

Tough questions, right?  (Just FYI, the correct answer is "C" in both cases.)

If you read the questions carefully, you'll realize the authors do have a particular bent --- they're definitely consumer advocates who stress that for-profit entities (like banks) exist to make a profit, not to help the consumer.  They also clearly want to reach low-income teens, stressing over and over again that you can have good credit without being rich -- and that conversely, you can be wealthy with terrible credit. They include segues into the dangers of payday loans, and have a brief digression into "our one and only product endorsement" -- which is that they prefer credit unions to banks.  [They carefully caution viewers that credit unions and consumer unions support their website, so that viewers should know this claim might be biased.]   This is all fits very well with my own philosophy, so I'm really enjoying it, of course.

At the same time, they're obviously not into miserliness, giving lots of examples of how spending money (wisely) is fun, and how knowing how to use money correctly gives you freedom.  ("Kids don't get checking accounts; only grown-ups do.  A checking account means you're becoming an adult".)  So there's something for the boys to latch onto, as well.

I hesitated to look at this at first, because they require users to create a password and then log in, but as you can tell, by now, I'm totally hooked (and I think my boys are, too).  If you have teens or young adults who are setting out on their financial lives, I recommend this website to both you and them.

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