Moderated by Rick Badie
No doubt, many adults would benefit from a brush-up on finances — bank accounts, credit cards, savings, expenditures and such. It’s no different for teens, many of whom already handle money. For today’s topic on financial literacy, we highlight an initiative by Junior Achievement of Georgia and some area public schools designed to educate middle schoolers on dollars and sense. The companion piece continues the theme with ways parents can help their children grasp finance.
Teaching teens comprehensively about money
By Jack Harris
Are we doing everything we can as a community to ensure today’s students are prepared for the demands of tomorrow’s economy?
This question is frequently deliberated by parents, educators, business leaders and community activists.
With the rapid shifts in technology and connectivity, many of our children will be applying for jobs that do not exist today. Beyond this, only 11 percent of business leaders strongly believe recent graduates have the skills to meet their current needs.
These intensified demands of tomorrow’s economy are not solely linked to the workplace. Shifts will continue to heighten the complexity of the economic environment and require greater understanding to successfully navigate financial intricacies.
Atlanta currently ranks highest in the nation for income inequality. Even more astounding is that a person born into poverty in Atlanta has less than a 5 percent chance of upward mobility to achieve “wealth.” Clearly, we cannot continue on this trajectory. Our children deserve more than a 5 percent chance to achieve the American Dream.
If a child never has the opportunity to experience a prosperous future, how do we expect them to deem it a possibility? If a student does not understand the relevance of standard curriculum, how do we expect them to stay engaged?
We have to provide meaningful opportunities that engage students in education and equip them to become financially independent, building a better future for themselves and the community.
Across various sectors, groups have taken steps to address these issues and progress has been made. Yet overall awareness among the public continues to lack. Envision the possibilities if everybody leaned in.
Imagine a generation where young people, no matter their background, know how to budget, save and invest; a generation of tenacious individuals armed with the confidence, knowledge and capabilities to take control of their financial futures, careers and achieve dreams.
To achieve this, there is no single bullet. Transformational shifts cannot rest solely on the efforts of a school, school district, business or industry. To provide sustainable solutions that reverberate throughout metro Atlanta, this must be a collaborative effort among the entire community.
Late August, the second Junior Achievement Discovery Center was launched in metro Atlanta. These centers are collective efforts from five school districts, including Atlanta, DeKalb, Fulton, Gwinnett and Marietta City Schools, more than 70 partners, such as Assurant, AT&T, Chick-fil-A, Cisco, Delta Air Lines, The Home Depot, SunTrust and 11,000 volunteers. Through these efforts, more than 60 percent of metro Atlanta middle school students are provided opportunities to develop skills for financial and professional success in an unmatched learning environment that’s highly relevant, experiential and authentic.
When students understand how academic lessons apply to the real world, they are more motivated in the classroom and ultimately achieve higher academic success. Since 2013, 65,000 students have experienced the JA Discovery Center and the results show these programs produce mindful shifts. Ninety percent of students state they now connect the relevance of education to future opportunities. Months after the simulations, nine out of 10 teachers observe a sustained higher level of engagement and effort by students.
The JA Discovery Centers have become a platform to reimagine the high school experience. JA and Fulton County schools recently launched the Junior Achievement Magnet Business Academy at Banneker High. This program takes key aspects from the centers and applies them to the daily learning experience. The first class of students have accepted the challenge and are already excelling in their interdisciplinary studies.
True learning comes from doing. When given the right tools, there are no bounds to the potential of our youth. There is no greater cause for our community than the future of our children. I invite you to join JA, school systems and our partners and become part of the movement to redefine a generation and place all students on a path to success.
Jack Harris is president and CEO of Junior Achievement of Georgia.
Teach money management early at home
By Casey Smith
Parents should never assume high schools and colleges are teaching their kids about money. Money education has to start at home, preferably at a young age. Ultimately, you want children to understand that success and the things they desire come from hard work, not handouts.
Based on feedback from our clients and my experience as a parent of three, there appears to be two common strategies parents deploy. I label them the Enterprise and Entrepreneurship strategies.
- Enterprise strategy: For many Americans, we go to school, graduate and get a job. We may move from one job to another but other than bonuses and pay raises, our income is fairly fixed. In this situation, we have to learn to live within our paychecks. Parents that live in this model will naturally gravitate to teaching their children in the same manner. The child will get a weekly allowance and these funds are typically spent at the child’s discretion. Chores like taking out the trash, making the bed, vacuuming or yard work are a part of being a member of the household and are not compensated directly. The enterprise model is fairly common and can be used to teach children how to manage their weekly allowance.
- Entrepreneurship strategy: In the entrepreneurship strategy, money is earned based on the amount of work performed. The more chores or tasks that you complete, the greater your payday. The concept here is that you want to tie work to income. While there is certainly work related to the previous enterprise model, it is tied to being a good citizen. Here, the kids are responsible for turning in their chore sheet each Friday for a paycheck. There are some daily tasks that you do not get paid for, like making your bed and personal care. When opportunities arise, you try to teach them how business works.
In both scenarios, children receive money, usually weekly. For budgeting, one option is Dave Ramsey’s envelope philosophy. Here, you would have three envelopes marked with save, give and spend. Ten percent is put in the give folder. This is to be given to church or an organization that helps others. Twenty percent is saved. When they get older, have them set a goal of something for which they want to save. This is to help teach delayed gratification. There are no interest-free loans from Mom and Dad or five easy payments of $19.99! Hopefully, delayed gratification will help keep their revolving credit card debt down or eliminated. For now, savings goes into their bank account. The spending folder is for just that, spending on candy at the Home Depot checkout, toys at Target and anything else that might catch their eye. If they do not have enough money, or they left it at home, then they can’t purchase it.
There is a trend that I call advanced budgeting for teens. Once a month mom, dad and child sit down and work out a monthly household budget. The teen-ager sees the incoming funds and expected expenses and then helps manage the implementation of the budget for the month. This will repeat each month, maybe for a few years. For affluent families where the child will be inheriting a trust fund, maybe as soon as graduation, this is a great idea. For families that want their child to do as I say and not what I do, this could be more challenging.
Since most schools and colleges don’t offer classes in fiscal responsibility with resulting grades, we must help start our children out on the right path, even if we did not take the right path ourselves. Financial stress can cause health issues, relationship strains and overall stress. Helping your child understand wise money management will lead to a better life for them.
Casey Smith is owner and president of Marietta-based Wiser® Wealth Management.