Here’s Part 2 of my interview with Steve Rosen, columnist with the Kansas City Star. Part 1 can be found here.
JLP: What particular money skills do you see older kids (teenagers) lacking these days?
SR: Credit cards and the inability to even balance the check book. Credit is pretty easy to come by for 18 year olds, especially when banks are hawking t-shirts and Frisbees on campuses in exchange for filling out an application. It’s a slippery slope. Credit cards are a great, convenient way to buy stuff, but young adults often don’t have the money to repay the bill. That’s why we’re seeing a big spike in the number of young adults filing for bankruptcy.
I don’t think kids should have plastic until they can manage cold hard cash – balancing their check books, salting money away, keeping track of debit card expenditures.
JLP: Recently you wrote about a 12-year old entrepreneur. What other cool business ideas are kids coming up with? What about summer jobs for kids?
SR: Many kids are multi-talented and have entrepreneurial streaks. I’ve interviewed kids who run dee-jay businesses for teen dances, bar and bat mitzvahs and the like. Some kids love sports and become soccer referees or baseball umpires making $20 a game. A high school neighbor runs a basketball camp for a handful of kids every summer on his drive-way court. And there’s good money to be made babysitting and lawn mowing, if you are organized and punctual and responsible. A high schooler I met last year actually has his own recording studio and wants to parlay that into a career after college.
If kids want to earn money, summer is the time to do it. There’s no interference with school. The key is to find a job that they’re really interested in, so the goal isn’t just to make money. It can be a long summer for mom and dad if their son or daughter drags their feet every day about going to work. Summer work is tough, especially with the competition for jobs.
JLP: There’s been talk about the lack of personal finance skills in high school and college kids. Are any schools instituting educational programs to help address this issue or is it mostly up to parents to do the educating?
SR: Fortunately, many teachers are finding ways to teach personal finance. Whether it’s incorporating money management or economics into a math or history lesson, or playing the stock market game or bringing in a Junior Achievement volunteer to teach business, more kids are getting exposure to these life skills. Parents should not assume that their kids are getting all they need from the schools. It still starts at the front door of your house. Be a good role model with money, find everyday moments to teach your kids about dollars and cents and encourage them to make their own decisions – including letting them make mistakes.
JLP: Do you have any personal finance advice for young couples planning to get married? Should they seek financial counseling before they get married?
SR: Don’t forget to talk about money – your goals, expectations, values, career options. Also discuss the nuts and bolts, such as who will pay the bills, what will be shared responsibilities, how many checkbooks you’ll have etc. I would also urge couples to seek financial counseling or meet with a planner before marriage. Money problems right off the bat can doom the marriage. Just check the numbers.
JLP: Finally, are there any good books that teach kids personal finance basics that kids might actually want to read? How about books for parents?
SR: For young kids, start with some of the Berenstain Bears books. For high school and college age kids, I recommend Financial Literacy for Teens by Chad Foster. For young adults, Please Send Money by Dara Duguay offers many lessons in money management.
Remember to catch Steve’s Sunday column in the Kansas City Star.