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Teaching Teenagers about Financial Literacy
Transcript of Teaching Teenagers about Financial Literacy
We spend big, but do we spend smart?
NEEDS VS WANTS.
Teenagers of our generation enjoy the term "fast money", meaning that they just want a job that pays a lot, with little work required, even though they do not necessarily enjoy what they do. Unfortunately not many of those jobs exist
Financial literacy is not taught in the education system, forcing teenagers to be ill prepared for their financial life.
We, the teenagers, are the future. I don't think any of us want financially illiterate people running our society.
My goal is to provide tips and basic financial information that will open your eyes to the truth of the financial world, and inspire you to get more informed on the subject.
Believe it or not, your iPhone is in fact a want, rather than a need.
Clothes and Shoes
Again, a need! - but to a certain extent. Of course, clothes and shoes are a necessity; but your Ugg boots and designer clothes can be replaced for no name brands.
FAST FOOD (or fat food )
Three in five teens eat fast food every week.
On average, a teenager spends up to 50$ a week on fast food. While most teenagers only have a part time job, that brings in at most 200$/week, spending that much on food is
a good financial decision(not to mention how unhealthy it is for you).
The best way to save your money is to store it in a bank account.
When you open a bank account, there are two possible places to store money: in a
How to not be smart with your savings....
- From 18 years of age to the end of his fighting career, Mike Tyson made somewhere between $300- $400 million.
-With so much money to spend, Tyson bought mansions, cars and owned tigers.
-He bought a $174,000 gold chain. The good life stopped there.
- Eight months later, he filed for bankruptcy.
-He was $23 million in debt, owing the U.S. and British governments $17 million in taxes and three-quarters of a million dollars to seven law firms
Tricks Our Minds Play With Money
Money DOESN'T grow on trees!
What is financial literacy?
Financial literacy is the ability to understand how money works/how someone manages to earn or make it. It is the ability to make informed money management decisions.
Price of a brand new iPhone:
With 50% of the teenage population owning an iPhone, i can bet that less than 5% are actually paying for it's monthly cost without help from parents.
Ugg's: Just under 300$.
Savings accounts allow you to keep your money in a safe place while it earns a small amount of interest each month. (
Interest is what the bank pays YOU for keeping your money in an account
). But why would they pay you for your
money? Because they will use your money to make loans to other people.
Putting your money in a savings account is better because your money is insured, and you will be less likely to spend this money.
A credit card is different from a checkings or savings account. A credit card is a piece of plastic that contains more money than you actually have, and allows you to charge anything you want on it, but whatever you spend comes with a price. If you do not pay off your credit card bills every month, you will be added interest which will force you to pay more than what you owed in the first place(that is the cost of borrowing money- which you are doing by using a credit card) You must be 18 years of age to own a credit card.
A checking account is the most common type of account opened, that you will most likely be using on an everyday basis. A checking account doesn't receive interest. When you spend money from your checking account, the balance is deducted immediately from the amount you had.
Failure to pay off your credit card bills, can lead to many debts, which can eventually cause bankruptcies or jeopardize your name because one day if you need a loan, you will not be approved because they will not trust your ability to pay back.
If Mike Tyson can go bankrupt, so can you.
If you are still interested on this topic and would like more information, you may consult some of my favorite sources which have helped me with my project.
2. (Book) Easy money by Gale Vaz Oxalade
Or, visit your local bank and speak to a financial planner! You're never too young to worry about your financial future :)
AVOID credit cards. Buy things that you can actually afford with cash or debit cards.
CUT YOUR EXPENSES.
Packing a lunch for school might seem like work, but think about how much of your expenses your cutting.
2$ every morning at Tim Hortons' for a coffee adds up. Wake up a little earlier to brew some coffee at home and put it in a reusable coffee mug.
Every Saturday morning during the school year, you spend three hours helping out with swim lessons at the community pool. You get $8.50 an hour. You have not been able to sleep in on Saturday. You work hard for your money.
You need a new lamp for your bedroom. You are all set to buy one in a nearby store for $19.95, but you notice an ad in the paper for exactly the same brand and model across town for $9.95. You travel across town to make your purchase. You can save $10. That's more than an hour's work.
You also need a new computer. You've been reading the newspapers, and the one you want goes on sale. A nearby store advertises the computer for $1,099. A competitor store located 15 minutes away, is selling the computer for $1,089. Where will you shop?
Interesting isn't it? In the second example, the $10 doesn't seem so important. Well, as a percentage of the purchase price, it's not as big a number. True, but was that $10 any easier to earn than the $10 you saved when you bought the alarm clock? Did you get to sleep in any later to earn it? No. Yet if you were like most people, you were ready to spend it rather than save it and travel 15 extra minutes.
*Example of a real life situation taken from TheMint.org
IN MEMORY OF
MR. FRANK EVANGELISTA
Quilty, David. "6 Bankrupt Celebrities Who Went From Rich to Broke." Money Crashers. N.p., n.d. Web. 5 Dec. 2013
Folger, Jean. "6 Bankrupt Celebrities Who Went From Rich to Broke." Money Crashers. N.p., n.d. Web. 5 Dec. 2013.
"Tips For Teens." TheMint.org -. NorthWestern Mutual, n.d. Web. 30 Nov. 2013.
Barron, Christina. "Money Matters: Kids Learn about Finance in School." Washington Post. The Washington Post, 25 Jan. 2013. Web. 30 Nov. 2013.