Financial Literacy is needed in our community now more than ever. We have been presented with an opportunity to plan for our financial futures instead of letting them “just happen to us.”
Fnancial Literacy is becoming part of our Families Fighting Foreclosure workshops. We will focus on main areas which are in dire need right now:
- Money Management
- Identity Theft
We teach budgeting, credit basics, bank fees, online banking and protection from Identity Theft. During our 3-1/2 hour classses, which include slide presentations, workbooks and worksheets are distributed to help ensure the concepts are understood. Workshops are local, well established and in high demand in our County.
- 36/40 Workshops/year = 15-35 particpants/workshop
- Creating a budget and spending plan
- Credit Report: Obtain at least once anually and review accuracy. (This is key for everyone: more than 80% of Americans have errors on their credit score — those errors drive up your interest rates!)
- Compare banks and learn which are fees associated with mortgages, lines of credit, credit cards, etc.
More About Marin Family Action’s Financial Literacy Programs:
Three Money Lessons From Teenagers
Laura F. Dogu, September 24, 2010 and from Forbe’s interview with Warren Buffett and Jay-Z.
In reponse to an article written by Laura Dogu, her children pointed out money ideas she missed:
Stuff happens–get an emergency fund.
The author’s youngest son stressed that having an emergency fund is one of the most important savings buckets for anyone. As he says, stuff just happens, and he even provided an example. After he accidentally broke his aunt’s MP3 player when he secretly took it to school to show his friends, he felt much better when he apologized because he had the ability to present a solution to the problem. He could afford to purchase a replacement.
Everyone needs an emergency fund to weather unexpected storms. HSBC’s “Managing Your Money” lessons recommend 3-6 months savings. Given our uncertain economy and significant unemployment rates, I recommend 12-24 months as it can take that long to get your income back up to a level that will cover expenses.
Don’t stash cash in your mattress or desk drawer.
Her other son felt it was important for children to understand that it is better to save money in a bank or to invest it rather than keeping it in the house. Money in a savings account or an investment account generates income while money at home doesn’t, and it can easily be lost or stolen. With interest rates as low as they are today, earnings are extremely minimal, but the concept will serve them well in the future.
The lesson–let your money work for you. High-yield savings accounts, U.S. savings bonds, or investments in the market are all viable options but money needed for emergencies or other short-term goals should be kept in safe investments so the value does not fluctuate. Money that won’t be needed for many years can be invested for the long term in riskier equity funds. Currently online is an excellent interview with Warren Buffett and Jay-Z. They have very different methods of making money, but both consider themselves lucky and neither are quitters; they plan and choose their own courses.
Excerpted from Forbe’s interview with Warren Buffett:
“Well, I was lucky that I got started early. My dad happened to be in the investment business, so I would go down to his office on Saturdays. At age 7 or so I started reading these books that were around the place. I knew what I wanted to do early. That’s a huge advantage.
“You don’t need a lot of brains in this business. I’ve always said if you’ve got an IQ of 160, give away 30 points to somebody else, because you don’t need it in investments. What you need is emotional stability. You have to be able to think independently, and when you come to a conclusion you have to really not care what other people say. Just follow the facts and your reasoning. That’s tough for a lot of people. But that part, I was just lucky with. I was born that way.”
and from Jay-Z:
“As I was listening to Warren, I could just hear all the similarities and all the things in what he’s saying, right? Because if you don’t look at the tickers, you’re really just searching for the truth within all the numbers and all the chaos. And that’s the key to being a recording artist. You’re telling your story or finding your truth at the moment.
“My story’s a little opposite from Warren because I started a little later. My first album didn’t come out until I was 26, so I had a bit more maturity. The album had all these emotions and complexities and layers that a typical hip-hop album didn’t have if you were making it at 16, 17 years old. That isn’t enough wealth of experience to share with the world. I had so much wealth to share with the world at that time, and I’ve never forgotten those things, like you say. You never forget those true things that you stick to, your basic things that make you successful.
“And for me, it’s that truth, finding the truth of the moment, of where I am at the time, not trying to cater to a certain demographic or being something I’m not, not driving the truck over a 10,000-pound bridge. There are so many similarities in what he was just saying. So for me, it’s just having the discipline, and the confidence in who I am. If I go into a studio and find my truth of the moment, there are a number of people in the world who can relate to what I’m saying, and are going to buy into what I’m doing. Not because it’s the new thing of the moment, but because it’s genuine emotion. It’s how I feel. This is how I articulate the world.”
Start saving for retirement early.
Set-up allowance, special projects, pay out days and teach philanthropy at an early age. The aforementioned Warren Buffet, a millionaire several times over, only recently began donating. Rather than establish is own foundation, he is working with already-established foundations such as the Bill Gates Foundation.
Interestingly the recent global financial turmoil made an impression on the author’s children. She wrote that although their family hasn’t suffered the same way many others have in the last few years, her children feel it is important to start thinking about and planning for retirement quite early because of the uncertainty surrounding pensions and Social Security.
That Laura Dogu’s children would be thinking about social security at such an early age is quite interesting; my own daughter has brought this up because her generation is not sure what will be left for them when they reach retirement age. She is already talking about second passports and international banking. While it may be too bad she has to consider such things, she is smart to be thinking long-term in her 20s instead of waiting until she’s 60-something and it’s too late (like so many of my generation).
Depending on income levels, marital status, age and retirement account type investors can set aside between $5,000 and $22,000 per year.
Unfortunately many people develop an interest in financial planning on their own timeline, which often comes only when they face large debts, looming college expenses, imminent retirement or a crisis like the loss of a spouse.
Financial discussions and life lessons beginning when children are young is one of the best ways to help prepare them to avoid a financial crisis of their own in the future.
We hope you can join us at one of Marin Family Action’s Financial Literacy Workshops for high school students or Adults; however, if you are unable to do so, perhaps an online course will help answer Where Does All My Money Go?