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					The Need for Youth
Financial Education
Think about this…
• In 1979, when the oldest
  Gen Xers were teenagers,
  the sole retirement plan
  for 62 percent of the
  workers was a traditional
  pension. What does it
  look like today?
Or this….

• In a 2008 JumpStart
  national survey 48.2% of
  high school seniors
  answered financial
  literacy questions
  correctly.
  A Sample Question
• Inflation can cause difficulty in many ways.
  Which group would have the greatest problem
  during periods of high inflation such as in the
  past few years?
– Older working couples saving
  for retirement? 8.2%
– Older people living on a fixed income? 5.7%
– Young couples with no children who
  both work? 50.1%
– Young working couples with children? 36%
In 2010…


• 76,892 U.S. high school
  students took US Treasury’s
  National Financial
  Capability Challenge in
  2010!
  North Carolina’s Results
Average score: 68.04% (70% nationally)
Students participating : 1099 (76,892)
Number of perfect scores: 2 (524)
Students in the top 20%: 190 (14,833)
Participating schools : 32 (1,535)
Other organizations participating
(after-school programs, etc.): 27 (639)
Participating educators : 65 (2,515)
So how do we stack up with
our finances?
Let’s try the “Budget Busters”

• I have written down my
  financial goals.

• I have a plan for reaching
  my goals.

• I plan how to use my
  paycheck before I say yes
  to impulse spending.
 “Budget Busters”
• I have a spending plan for my
  allowance and any earnings
  from working for others or for
  myself.

• All of my purchases are part of
  my plan for reaching my goals.

• I know the rate of interest I am
  receiving on my bank or credit
  union savings account.
 “Budget Busters”

• I plan some money for
  spending as I please, but only
  after paying myself first.

• I know the difference
  between wants and needs.

• I have determined several
  goals for my future.
 “Budget Busters”
• I know how much I can spend
  on clothing each month/year.
• If I want to make a major
  purchase ($100 or more), I do
  comparison shopping to get
  the best buy for my money.
• I limit junk food to an
  occasional treat rather than
  an everyday habit.
Results



• How did you do?
• Did you have any
  money left?
Teaching Youth about
Finances
 What is required in NC
• HB 1473 (2007) requires all 10th
  grade Civics and Economics
  teachers to include financial
  literacy in the curriculum.

• Financial literacy must be
  taught through a series of 4
  modules (checking, savings,
  investing and credit).
Just created
• SB 1019 (Session Law 265 in
  2009) established the
  creation of a NC Financial
  Literacy Council. The 18-
  member Council will be
  housed in the Department
  of Justice and
  appointments are made
  by the Governor.
  NC Financial Literacy Council
• The council shall:
   – monitor and assist the
     Department of Public
     Instruction in the
     coordination of statewide
     delivery of financial
     education within the public
     school system
NC Financial Literacy Council
– shall identify programs
  designed to increase the
  financial literacy of North
  Carolinians outside the
  public school system
– shall work to expand access
  to financial education
  resources and programs in
  communities across North
  Carolina.
Another added item

• HB 1474 (2009) Each student
  shall receive personal
  financial literacy instruction
  that includes lessons on
  credit, managing a credit
  card, borrowing money for
  large purchases, and credit
  scores and reports.
 Who is assisting?

• DPI / NC School Systems
• SECU and many other financial
  institutions
• NC JumpStart Coalition
• NC Council on Economic
  Education
• CFNC
• NC Cooperative Extension
Who is assisting?

•   Junior Achievement
•   Other State agencies
•   NCACPA
•   Many other non-profits
    such as
    NC Institute of Minority
    Economic Development
SECU’s Youth Programs
     What works…
• Payday Lender
   – Charges $15 per hundred dollars borrowed
      or a $75 fee on a $500 loan for 1 month.
• SECU
   – Charges 1% of amount borrowed or $5 in
      interest on a $500 loan for 1 month (no
      other fees, no other charges).
• 75,000 SECU members use the salary advance
  loan each month. Over 100,000 are enrolled!
• Each member “saves” $70 each month (the
  difference between their fee ($75) and our
  interest cost ($5!)).
• Monthly savings: $70 x 75,000 people = $5.25
  million.
• Yearly savings: $5.25 million x 12 months = $63
  million!!!
What works…
• Savings component
  added to the SALO
  program --- trying to break
  the payday lending cycle.
• Today, more than $18
  million has been saved by
  members in SALO Savings.
What can you do?
• Volunteer
• Contact one of DPI’s
  collaborative partners to
  deliver instruction on
  financial education to
  youth in various settings
• Help teach your children
  or family members
Points to remember when it
comes to youth financial
education
A financial future for youth….

• Involves goals

• Requires choices

• Requires self-discipline

• Begins now
Types of goals for teens
• Go to college

• Live independently

• Save for retirement

• Purchase a vehicle

• Buy a first home
Choices, Choices ….
• Need a car?
• Need a place to live?
• Need emergency funds?
• Need to make loan
 payments?
• What is “other”?
Other ….
Other ….
Requires Self-Discipline


• Just say, “NO!” ---not every
  “good deal” is a good
  deal
• Needs vs. Wants

• Now vs. Later
Needs vs. Wants


• Needs – clothing, food,
  shelter
• Wants – cell phones, iPods,
  iPads, “brand names”, and
  the list goes on…..
Now vs. Later

• $200 a month in a
  tax-deferred retirement plan
  can build a solid nest egg by
  age 65. (assume 8% return)
• Start at age 25 = >$698,000

• Start at age 45 = $118,000
Let’s get to work!
Questions?
Contact information:
Leigh Brady
State Employees’ Credit Union
919-807-8347
leigh.brady@ncsecu.org

				
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