Chance to Make a Difference............:)

[FinanceDude]

I have been approached by some community education folks to teach a course on basic finacial concepts everyone can use. It would be available to ages 11 and up.

It seems like an exciting proposition. They would like an answer within a couple weeks. Some topics I would cover:

Budgeting
Wise use of credit cards and credit
Balancing checkbook
Shopping for good finance rates for major purchases
Basic Investing concepts
Basic money concepts


Other ideas?

Sounds like it could be fun...........

[runchman]

My only thought would be to figure out how to hammer home one principle -

spend less than you make.

All the rest hinges on this one thing, in my mind.

I'd start off with some projections of how small savings can make someone a millionaire over time - thereby whetting their appetite to learn more and pay attention to what else you have to say.

- John

[genghis]

Sounds like a 2 minute presentation - just show them this:

http://www.dailymotion.com/video/xt0c6_snldontbuystuff

[runchman]

I've seen that before, that's hilarious.

[justin]

Quote:

Originally Posted by genghis Sounds like a 2 minute presentation - just show them this: http://www.dailymotion.com/video/xt0c6_snldontbuystuff

Good idea seriously. If you have the A/V equipment to show the video, do it. Maybe even open with it. Humor and entertainment are key to engaging an audience!

[bssc]

How to cut prices down by using coupons and the like. Encourage them to provide ideas. Talk about how delaying gratification (like waiting for the XBOX prices to come down (you could even talk about how you don't need an XBOX and how the library lends books and DVDs for Free)).

[FinanceDude]

Quote:

Originally Posted by bssc How to cut prices down by using coupons and the like. Encourage them to provide ideas. Talk about how delaying gratification (like waiting for the XBOX prices to come down (you could even talk about how you don't need an XBOX and how the library lends books and DVDs for Free)).

That will be easy, since my home contains NONE of the following:

Satellite TV
Cable
Gameboy
Xbox
Nintendo
PSP2
Unused library cards

[Sandy]

I always thought that taking a $1 bill and burning it to demonstrate what interest charges do to your money might make an impression.

Seriously, sounds like a good solid list and I concur - send the message LBYM, save early and save often.

[FinanceDude]

Quote:

Originally Posted by Sandy I always thought that taking a $1 bill and burning it to demonstrate what interest charges do to your money might make an impression. Seriously, sounds like a good solid list and I concur - send the message LBYM, save early and save often.

Rule of 72, anyone??

[REWahoo]

Two suggestions for exercises you can do with the “wise use of credit cards and credit” section. I used these two examples with a Jr. Achievement class I taught to ages 13-14. They seemed to make a big impression.

1. Using a newspaper, find a sale ad for product such as an iPod or other rapidly changing consumer electronic technology. It should be a product advertised for something like “$299.00, buy it for only $10 per month!”…you know the type. Take the class through the fine print and the nasty interest rate, then work out the math with them to show 1) how long it will take them to pay off the item and 2) the total amount they will end up paying for that $299 item. Finally, assuming the time to pay off the item is 3-4 years, ask them how many “toys” they bought 3 years ago they would feel good about still making payments on today? Do they still have that toy, or is it outdated or broken?

2. Let the group buy themselves a new car. Using the auto ads out of the paper, ask them to pick a no-money-down offer for a car they would love to own and select one person’s choice to use as an example. Then take them through the math and show them a real world example:

You buy a new Zipmobile at a price of $24,500 (Note: all numbers are for illustration only. You would need to do the actual math once you selected an example.) Adding credit life insurance, undercoating, magic paint sealant, plus tax, title and license, it totals up to $27,000. You sign the papers and drive your new car off the lot, knowing you don’t have to make your first car payment to ZMAC finance for 30 days. Yeah, they are a little steep at $525 a month, but you’ll figure something out.

You drive your new ride for three months and one night you come out of the movie theater and can’t find it. You report your vehicle to the police as stolen and are very thankful to know your car is insured against theft. After a few days, the insurance company sends a check made out to you and ZMAC finance for $19,500. You say, “But it was a brand new car and I still owe $26,500 on it!” The insurance company pays for the depreciated value of the now used car, which they calculate to be $20,000, less your $500 deductible. Your new $24,500 car was actually a three month old used car when it was stolen. And the $2,500 you paid for credit life insurance, undercoating, magic paint sealant, plus tax, title and license…fugheddaboudit!

End results, after you sign over the $19,500 check to ZMAC, you still owe ZMAC $7,000! You will have to continue making those $525 per month payments for more than a year, until you’ve paid off the remaining $7,000 on a car you no longer have. :P

And by the way, you no longer have a car, so how are you going to get to work?

[Zoocat]

Young people might be interested in "creative" ways to enjoy stuff without paying for it, like the old fashioned technique of trading with their friends. I saw a news story about some female college grads who were paying down their college debt and decided to not buy clothes anymore. They were all about the same size and could borrow outfits from each other, purses and shoes too.. CDs, DVDs. Why buy new ones when friends could trade and borrow?

Also, the idea of "freecycle" is I think a natural one for adolescents. Give away stuff you don't want, get new stuff free.

[shiny]

This sounds like an awesome opportunity to shape some young minds - good for you!

[SteveR]

Now that is a great idea!

Most people can't balance a check book so they don't. The result is they "think" they have enough to cover the bills but frequently go in the hole and get hit with late fees, bounced check charges and ill will. It also makes them feel stupid.

Many people can't read IRS instructions and complete their own taxes. The lack of ability to do so makes them feel powerless and they pay someone else to do it.

Some people don't understand the concept of credit cards. Plastic money is not free. You have to pay a huge premium to use it. Debit and CCs are too easy to use and I have even had cash declined as payment. This creates the concept of I can spend forever because nothing goes away as would cash from your wallet.

People don't save because they are driven to spend and get themselves deep in dept with no way out. I know several couples that have declared bankruptcy...some more than once yet are still up to their eyeballs in debt and continue to spend on toys...IPODs, digital cameras, new cell phones every year, new cars every two years (still upsidedown from 3 cars ago) and many other things. The say they know they should stop but they are addicted to consumerism. Education and the desire to change are required to stop the downward spiral.

I would love to do this myself someday. Having lived on the dark side of debt I have some personal insights.

[lazygood4nothinbum]

not sure if i would have listened as a kid. though a few weeks back at lunch my 10 year old nephew was so happy to tell me about all the money he had in his wallet (which he keeps as a bank at home). so i explained a little about compounding interest and inflation. the entire time he's playing with his gameboy or whatever that toy is that i bought him. so i asked him what's happening to the money that's sitting in his wallet and the little multi-tasker says "it's losing value." cool kid.

[SteveR]

Quote:

Originally Posted by lazygood4nothinbum not sure if i would have listened as a kid. though a few weeks back at lunch my 10 year old nephew was so happy to tell me about all the money he had in his wallet (which he keeps as a bank at home). so i explained a little about compounding interest and inflation. the entire time he's playing with his gameboy or whatever that toy is that i bought him. so i asked him what's happening to the money that's sitting in his wallet and the little multi-tasker says "it's losing value." cool kid.

At that age having it near you is more important than putting it in some cold vault. The value is that it is within arms reach. Compound interest is just not not important; besides it is too hard to go to a bank on your bike when you mom won't let you leave the area because some nutcase might abduct you.

[dex]

Wasn't there a post recently with a similar question?

Or have I been on this board too long?

[REWahoo]

Quote:

Originally Posted by dex Wasn't there a post recently with a similar question? Or have I been on this board too long?

Yes,

and yes.