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Paul Golden with tips on how to achieve financial responsibility before going off to college
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Paul -- you're the director of the national endowment of financial education private nonprofit in existence for 35 years and -- saying that it's really interesting.
The high school class that entered high school in 2008.
Financial crisis is now the graduating class of 2000 and -- and they lived in the learned through the recession.
And how to go for them.
Yeah that's the silver lining of the recession if there is one is that there's little bit more focus on educating -- -- on how to manage their money effectively right there's some inroads as being done in schools there's more states that are mandating that personal finance education be -- be delivered -- students we really talking about that earlier again this state really Mandy -- art teacher -- -- to teach -- -- -- there's a lot I don't it's kind of loosely defined so there -- standards to implement financial education.
And then there's testing requirements and course opera requirements right now there's fourteen states nationally -- actually have a mandate in place.
But it still isn't necessarily defined just where it's going to be delivered it can still be a social studies teacher math teacher my.
It is obvious kids need to learn how to.
Manage finances and they need to start young and perhaps the best place and why -- school but.
It's a combination I mean what we're talking about is -- life -- here this is something that kids would use every day once they leave the -- and so there needs to be a combination of what they get in school and then also what they learn from the parents and actually parents want the most influence over how kids.
Adapt behaviors and have their own money personalities when they grow up so what should parents do house if you start talking and talk often you know one of the things certainly from my you know from experience is that parents don't wanna talk about finances with their kids -- sometimes just not an open discussion -- because there.
And it's that are not in good shape or maybe they want their kids to worry yeah maybe not worry maybe if you don't feel like you're in a stable financial situation yourself you might.
You my question if you can impart wisdom right that's effective enough but you certainly can't because your kids are.
Watching and and they have a less tangible concept of money I mean everything is tax your card that he ATM -- -- money and there's.
You have to have the discussion how many comes in and -- he's -- go out why you have a budget why you have an emergency savings.
So parents -- need to have the discussion they need to do it often.
And -- discussing ago.
Should it go like -- junior I wanna teach you AB and C about making your bank account bigger and you know paying off your credit cards and order or is it something where you know we're making purchases together you say.
Okay we're gonna buy this because we're gonna use it and it we got it on sale and we found this coupon is it more overall discussion -- Let me show you.
Should ever be a lecture.
Because kids get enough of that.
At and it should be teachable moments it's exactly like what you're talking about so when you have to adjust your budget a little bit leaner and a month because something happened things got a little bit tighter that's -- you should have the discussion.
When you're at the mall and the kids asking to get something say we don't report this right now.
And set an example and don't buy something that you want -- -- have credit cards.
Credit cards to be very effective tools -- managing their money depends on the age depends on how much they've learned upfront probably should start with the traditional bank account checking savings first.
Parents should definitely be there.
-- guiding them through the transactions.
Media makes a little bit more sense to start with -- prepaid card.
-- he has something that secured free money -- credit card to so many young people.
Do it's an important tool to learn how to managing money you will establish your credit as you get older but I think it's important to understand that there are caps in you know you wanna use a credit responsibly so maybe something like every day -- secure card is going to be -- little bit better.
And I know they're not always allowed on campus analyst credit card companies that come on campus my brother signed up for every single credit card and totally ruined credit you know idea the credit -- legislation that actually hope we'll get a lot of that's exactly.
And you know there's age restrictions now -- be 21 years of age not a white you have to have a co signer or demonstrated incoming order to get the credit card.
That's positive stuff that that needed to happen and the kids can still get access to so that's why it's important to understand how to use credit responsibly when we talk about fundamentals of personal finance that's right.
Another hot topic would be.
Loans for college -- graduating with boatloads of debt right now this is that the big issue in Washington.
Are you seeing that high school kids are planning their college educations differently based on their finances you -- You can see some kids are doing gap here now maybe -- -- graduating high school not going into college right away really.
You know what we've seen in the research we do our organization does a lot of -- what is really work.
You know they might be doing -- part time income saving up money to go to school.
What we are seeing is that 59% of parents right now -- that they are financially supporting their adult children.
Who were not -- -- It seems low they can be in a variety of ways I mean you can be you know certainly -- your place to live helping with insurance -- -- and other costs and everything like that.
But some so they may be taken -- -- here they may be working to save up a little bit more money I think another train -- kids to think about in order to cut down.
Overall loan costs by the time he graduated -- about where you start your education right.
You know certainly -- at a two year college and yeah.
Yeah I mean state institution -- you're not paying something that's out of state in the first year certainly if your education your gonna be doing core classes so why pay a premium for those.
