Page 8
January 2006
The AC Phoenix
ItSjgiOLSi Bmm
By: Michael Shinn, CFP
Much has been written about the miscalculation of our youth
concerning money and personal finance. However, JA Worldwide
(Junior Achievement) is one group that seems to be making positive
headway in teaching teens about money. JA Worldwide is the world’s
largest organization dedicated to educating young people about
business, economics and entrepreneurship. Today, JA Worldwide
serves four million students in the U.S. and 2.6 million in 97 countries
internationally.
JA conducts an annual survey that provides some interesting
information about the financial behavior of JA Students. Three-quarters
of the teenagers have savings accounts; two-thirds feel that they have
a significant influence on household buying decisions; and about half
have a job during the school year.
JA Worldwide, through a grant from the Allstate Foundation,
conducted the survey entitled, ‘Teens and Personal Finance,” wherein
1,065 students from 80 JA locations nationwide participated. The
survey participants ranged in age from 13 and 18 years. The
ethnic/racial mix of the respondents approximated the national
distribution of the U.S. population; Hispanic, 13 percent; Black 11 per
cent; Asian, nine percent, and evenly divided between males and
females. For the survey participants:
• 74 percent have savings accounts, 31 percent checking accounts
and 16 percent own stock.
• 67 percent indicated that they influenced household buying
decisions.
• 49 percent reported having a job during the school year.
• 35 percent indicated that they received an allowance, and
• 11 percent own credit cards, with the percentage increasing with
age.
The Junior Achievement Program teaches some important lessons
about money and personal finance. I encourage you fo get your
children involved in the JA Program, if possible. Look at the website:
www.ja.org for more information. However, there are some basic things
we should be teaching our children about money.
First we have to help our children understand that money is one of
many powers. It is a power that can help them achieve their personal
and family goals. Money is green and does not have a race, religion or
sex. We have to teach them about the value of money, through an
understanding of the exchange of time for money. For example, if you
make $10 per hour and buy an Usher DVD costing $20, you’ve
exchanged two hours of your life to see and hear Usher sing. Our
children have to understand the old saying that “time is money.” Are we
teaching our children the value of both time and money, and the
necessity to use both wisely?
Our children have to understand that it is not how much money you
make, but how much you keep that’s important! They have to
understand that the secret is to pay your-self first and that their
financial future is just as important as their landlord’s, grocer’s or
clothing store owners. We have to insist that our children save a
portion of their allowance, summer job money or monetary gifts. Saving
has to become a habit. Are we teaching our children that a dollar saved
is a dollar earned?
We have to teach our children to make money work for them. They
have to learn about markets. Investing and the benefits of compound
interest. They have to understand basic accounting and the negative
impact of taxes. We have to encourage them to read books and listen
to tapes about making money, because they have to understand that
their financial education is a lifelong process.
As we wind down 2005, this a good time to reflect on what we are
teaching our children about money. Are we teaching our children to use
their time and money wisely? Are we insisting that they pay themselves
first? Do we explain the difference between working for money and
having money work for them? Are we guiding them towards financial
independence? Finally, are we practicing what we teach?
(Michael Shinn is a registered representative of the Financial
Network Investment Corporation. Visit www.shinnfinancial.com
for more information. Questions and comments may be sent
via e-mail to shinn@financialnetwork.com.)
822 CARL RUSSELL AVENUE
WINSTON-SALEM, NC
27101
(336) 722-3459
FAX (336) 631-8268
E-Mail: rusfhome@bellsouth.net
www.russellfuneralservice.com