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Teaching children and teens how to manage their money

Teaching children and teens how to manage their money

Published: Saturday, Aug. 1 2015 8:44 p.m. MDT

Maddy Condie takes Jerry Christensen's financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012.  (Kristin Murphy, Kristin Murphy, Deseret News) Maddy Condie takes Jerry Christensen's financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012. (Kristin Murphy, Kristin Murphy, Deseret News)

SALT LAKE CITY —

Learning how to manage money is an acquired skill that many adults have a difficult time achieving. That makes it even more difficult for the children who follow to grasp money lessons they'll need to succeed.

But savvy young people, with the help of school programs and parents willing to make a sacrifice, are learning how to avoid letting money manage them.

"My parents taught me from a young age that you only buy what you need," said Brighton High School junior Hayley Hadfield. She has had a checking account for two years and it has allowed her to learn valuable lessons about how to manage her personal finances.

Junior Maddy Condie said the lesson her parents have tried to impress upon her is to buy just what you can afford.

Maddy Condie, center, and Hayley Hadfield, left, listen to a financial lecture. Condie, a junior, said the lesson her parents have tried to impress upon her is to buy just what you can afford. (Kristin Murphy, Kristin Murphy, Deseret News) Maddy Condie, center, and Hayley Hadfield, left, listen to a financial lecture. Condie, a junior, said the lesson her parents have tried to impress upon her is to buy just what you can afford. (Kristin Murphy, Kristin Murphy, Deseret News)

"When I get money I buy things, but I buy with cash, not credit cards," she said.

Junior Zane Godbe said he puts aside most of what he makes at his after-school job except for the bare minimum he can make it on between paydays — a lesson he learned from his father.

"He said take out just what you need to survive for two weeks, then put the rest in the bank unless you really need it," he said. "Fifty dollars or less is more than perfect for me."

The money he saves is used to make car repairs or other necessities that come up.

"It's teaching me that if I spend all my money, that I'll be flat broke and won't have any cash," he said. Without that disciplined approach, he would not have had the money to address needs that unexpectedly came up, he said.

Brett Walker takes Jerry Christensen's financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012.  (Kristin Murphy, Kristin Murphy, Deseret News) Brett Walker takes Jerry Christensen's financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012. (Kristin Murphy, Kristin Murphy, Deseret News)

Senior Zoe Freebairn was a lifeguard during the summer and found out just how quickly cash can disappear if you don't budget wisely.

"I made a thousand dollars and it was gone in a month," she said. "I just spent money every day. If you don't pay attention, it can go really fast."

Monitoring your account balance is very important, she acknowledged.

"I did overdraw … spent more than I had," Freebairn said. "I had to pay all these overdraft fees. It was amazing!"

Managing money

All four teens are students in the first period financial literacy class taught by Jerry Christensen at Brighton High School.

Jerry Christensen's mantra to his students is: Jerry Christensen's mantra to his students is: "Manage your money so that your money won't manage you." Jerry Christensen's mantra to his students is: "Manage your money so that your money won't manage you." (Kristin Murphy, Kristin Murphy, Deseret News)

Since the 2008 school year, all Utah high school students are required to take financial literacy courses to graduate. The curriculum includes information on money management, investing, interest rates and consumer debt, Christensen said.

"We teach how to make proper decisions using all available information, not based on emotion or peer pressure, advertising or marketing," he said.

His goal is to help the students avoid making mistakes that can be costly for years to come.

"If I can save them 10 years of pain through their 20s because they made bad decisions when they were 19 or 20 … by getting into too many loans, then I've probably done my job," he said.

The class also covers information on identifying scams, which are becoming more prevalent in the easy information access age of iPhones, Facebook and online shopping.

Warren Cook answers a question during Jerry Christensen's financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012.  (Kristin Murphy, Kristin Murphy, Deseret News) Warren Cook answers a question during Jerry Christensen's financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012. (Kristin Murphy, Kristin Murphy, Deseret News)

The students are taught how to avoid fraud and how to deal with it if you fall prey to a scam, "whether it's investment scams, paying too much for car repairs or any other kind of service work," he said.

"We have a saying: 'Manage your money so that your money won't manage you,' " Christensen said.

Among the tips he gives students is to have your accounts set up so that you receive a text message anytime there is deposit or withdrawal activity.

"It helps to prevent fraud … and makes individuals more aware of their account balances," he said. "You know in real time where (your) balances are."

In speaking of the ever-increasing use of credit by consumers, Christensen said credit used properly can be a useful tool, but used incorrectly can be very dangerous.

Jerry Christensen teaches a financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012.  (Kristin Murphy, Kristin Murphy, Deseret News) Jerry Christensen teaches a financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012. (Kristin Murphy, Kristin Murphy, Deseret News)

"It's like a chain saw," he said. "If you can't handle a chain saw, you better not be messing with one because it's going to be ugly. … Similarly with credit."

Getting financial advice

Ann House, coordinator of the personal money management center at the University of Utah, said young adult students come to her office regularly with financial issues.

The center, which opened in 2011, provides education, guidance and counseling in matters of personal finance primarily for students. However, workshops on various topics are also offered for students and the community at large.

In addition to leading the center, House is also a financial counselor and instructor in the university's department of family and consumer studies, which offers an emphasis in financial planning.

Warren Cook, right, answers a question during a financial literacy class. Teacher Jerry Christensen  says his goal is to help students avoid making mistakes that can be costly for years to come.   (Kristin Murphy, Kristin Murphy, Deseret News) Warren Cook, right, answers a question during a financial literacy class. Teacher Jerry Christensen  says his goal is to help students avoid making mistakes that can be costly for years to come. (Kristin Murphy, Kristin Murphy, Deseret News)

"We've seen a lot of traffic come through here in the last year," she said. "Students are not getting enough good information (about personal finance)."

She said her office is working to help young adults understand the best way to manage money and credit, as well as expose them to all the options available to them for better money management.

While there are numerous resources available to teenagers and young adults, few exist for younger children. That leaves education of young kids to parents who are willing and knowledgeable enough to teach kids the value of money and the best way to manage finances.

Teaching young children

Melissa Cundiff, a Sandy mother of three, said she and her husband have developed a plan to teach their kids the value of earning money and how to manage it. They modified a plan they read in a book about teaching children personal finance.

Jerry Christensen teaches a financial literacy class at Brighton High School. All Utah high school students are required to take such a course to graduate. (Kristin Murphy, Kristin Murphy, Deseret News) Jerry Christensen teaches a financial literacy class at Brighton High School. All Utah high school students are required to take such a course to graduate. (Kristin Murphy, Kristin Murphy, Deseret News)

Rather than giving her kids an allowance, they earn money by doing household chores. With that money, they are responsible for buying all of their own clothes, school supplies, gifts for birthdays or anything else, she said.

"The way we budgeted their ('wages') was based on how much we would be paying for all of those things," she said. "So instead, we make them responsible for it. If they don't meet their responsibility, then they don't get the money.

"So they are motivated," she said with a laugh.

Her kids are 6, 10 and 13 years old. She said the "work for pay" plan has been mostly successful in the year-and-a-half since it was implemented.

She said there are times when the kids earn very little money and have to adjust their spending habits accordingly.

Jerry Christensen teaches a financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012.  (Kristin Murphy, Kristin Murphy, Deseret News) Jerry Christensen teaches a financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012. (Kristin Murphy, Kristin Murphy, Deseret News)

"There are 'pouty' times when they want $100 pair of shoes," she said. "They are upset they don't have the money for them."

But she said they now have begun asking for coupons to help save money and increase their purchasing power, a sure sign that they are learning the lessons they are trying to instill.

"It definitely involves work and discipline on our part as parents because it's a lot easier for me to just go out and buy them clothes rather than having to take them and their money and have them figure it out," she said. "But we feel like it is time well spent to teach them how to do it."

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Financial planning

Jerry Christensen teaches a financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012.  (Kristin Murphy, Kristin Murphy, Deseret News) Jerry Christensen teaches a financial literacy class at Brighton High School in Cottonwood Heights on Thursday, Dec. 6, 2012. (Kristin Murphy, Kristin Murphy, Deseret News)

1. Set a financial plan: Set goals. Develop a spending plan (budget) based on these goals. Save automatically with direct deposit. For children and teens this may mean only $5 a month, but it gets them in the habit of saving.

2. Become a savvy consumer: Separate your needs from your wants. Don't fall prey to peer pressure. Take advantage of free resources that schools have to offer, such as career counseling services and workshops. Seek out student discounts. Don't become dependent on a vehicle. AAA estimates car ownership in 2012 is $8,946 per year.

3. Understand financial aid packages and loans: Is it a loan you need to repay with or without interest while you are in school? Is it a federal loan or a private loan? Are scholarships or grants available?

4. Make school your first job. Many students work full or part time while in school. Work doesn't have to interfere with getting good grades, but you do need to manage your time carefully. For college students, taking longer to graduate because you are not doing well will cost more money in the long run.

5. Build good credit. Approximately, 50 percent of prospective employers will want to check your credit report and may or may not hire you based on what they see. In a competitive job market, you will need to present your best, and good credit allows you to take out a loan for big purchases like a car or a house at a low interest rate.

Source: Personal Money Management Center at the University of Utah

Financial planning

1. Set a financial plan: Set goals. Develop a spending plan (budget) based on these goals. Save automatically with direct deposit. For children and teens this may mean only $5 a month, but it gets them in the habit of saving.

2. Become a savvy consumer: Separate your needs from your wants. Don't fall prey to peer pressure. Take advantage of free resources that schools have to offer, such as career counseling services and workshops. Seek out student discounts. Don't become dependent on a vehicle. AAA estimates car ownership in 2012 is $8,946 per year.

3. Understand financial aid packages and loans: Is it a loan you need to repay with or without interest while you are in school? Is it a federal loan or a private loan? Are scholarships or grants available?

4. Make school your first job. Many students work full or part time while in school. Work doesn't have to interfere with getting good grades, but you do need to manage your time carefully. For college students, taking longer to graduate because you are not doing well will cost more money in the long run.

5. Build good credit. Approximately, 50 percent of prospective employers will want to check your credit report and may or may not hire you based on what they see. In a competitive job market, you will need to present your best, and good credit allows you to take out a loan for big purchases like a car or a house at a low interest rate.

Source: Personal Money Management Center at the University of Utah

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