Financial Literacy for Our Youth: Creating A More Powerful Generation (cont'd)
By M. Tonita Austin-Hilley

My first question was “how many of you have a savings account?” One girl raised her hand; she had a total of $5 in her savings account. The second question was “what are you doing now to help you achieve your goals of paying for your education and buying these homes and cars?” Silence. I now had a captive audience.

I stood in front of the chalkboard and spoke about setting short-term and long-term goals, and the difference between the two. We listed them all, one by one. We spoke of bank accounts, interest-bearing savings accounts and when to use cash versus credit for purchases. We talked about the importance of using coupons, performing price comparisons and avoiding get-rich-quick schemes. I described the difference between Mutual Funds, IRAs and Education Savings Accounts and spoke about the reality of Social Security. I then asked them to turn on the calculator they had in front of them and each young lady calculated the interest on their dream homes and their BMW, Lexus and Mercedes sedans and they were in shock. I will never forget when one of the attendees said “Ms. Hilley, I can’t even fit that number in my calculator!” They were shocked to know that a mortgage lasted longer than three years and that you could pay more in interest than principal.

And finally, I gave each young lady a spreadsheet and asked her to list all of her current expenses (including hair, nails, snacks, DVDs, CDs and weekend outings) as if she had to support herself. Their immediate responses were similar “oh, I don’t know, my dad/mom/grandmom/guardian pays for all of it.” I then reminded them that one day, they will be on their own, and will have to make spending choices for themselves, without the support of their parents. I also brought it to their attention that many times parents are willing to help you even more if you can show that you will take the initiative. We used prom night as an example. Parents moan at the idea of paying for the dress, the hair, the limo and the after-party. If they took it upon themselves to take on some odd jobs around the house or neighborhood and paid for their own dress, shoes and hair, they could use their parent’s contribution to pay for the limousine that they would not have otherwise been able to afford. And once again, the surprise on their faces made me laugh inside. It never crossed their minds that in helping their parents, they actually help themselves.

We proceeded to map out their individual budgets, making sure to include savings as a required budget item. For each young sister, I wrote, in white chalk on the blackboard, her total annual expenses. They would have never guessed the figures would go into the tens of thousands. Looking at those large numbers in black and white, some of them immediately decided to make better choices about their spending, and eliminating some frivolous items from their budget. Some felt more respect for their parents now that they realized how much money it took to support them alone. Some were trying to figure out how to increase their income so they would have more money to put into their savings account, and I must admit that a few were not affected at all (or at least didn’t show it that day). After the conclusion of the workshop they asked so many questions such as how to open their own checking and savings accounts, as well as retirement accounts, and the resources needed to start their own businesses. Their eyes gleamed with the power and knowledge I had just passed on to them. My job was done.

I left those young ladies proud of what I had accomplished and jealous of them because they have such knowledge at such a young age. It was at that moment that I knew how powerful knowledge is, and how desperately we need to pass that power on to our youth. I myself am committed to making it happen—one young brother or sister at a time.

The following are several great financial literacy websites to pass on to your young ones or to educate yourself:

1. www.blackenterprise.com (be sure to check out their Kidpreneur section and magazine for young entrepreneurs!)
2. www.savingforcollege.com Tool to help calculate the cost of college.
3. www.practicalmoneyskills.com Wonderful materials and quizzes for teaching financial literacy.
4. www.jumpstart.org Coalition of organizations aimed at educating students in financial matters and
5. www.independentmeans.com Offers services to women trying to gain financial independence as well as educate their children about financial matters.

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