Welcome to Teens MONEY a Talking to teens

Welcome to Teens & MONEY a Talking to teens about money © 2011 Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Talking to Teens About Money. WI$E ü A joint financial education project of Consumer Action and Capital One Services, Inc. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Seminar Duration ü There will be two sessions of two hours each. ü Each two-hour session will include a 15 -minute break. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Course Purpose: ü To give parents the tools to talk to their teens about money. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Parents’ Role in Teaching Kids About Money ü Parents play a key role in shaping kids’ values and attitudes about money management. ü Children who received information about money management at home are more financially literate than those who are only taught money skills only in school. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Teens, Money and Pressure ü Teens are under tremendous pressure to conform with their peers. ü Only a strong role model can counteract teen peer pressure. ü Kids today have considerable disposable income—and they are a target for advertisers and marketers. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Role Models ü Why do you think it is important to provide teens with a strong adult role model? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Alternatives to the Mall ü Shopping has become a recreational pastime for many families. ü What are some family activities that you don’t have to spend much money on? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Needs and Wants ü Do you think teenagers know the difference between needs and wants? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Setting Priorities ü Everyone has to set priorities on what they want. ü Basic needs (food, clothing, shelter, education and transportation) take priority. ü Overspending is an addiction that can lead to debt and even bankruptcy. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Needs and Wants Exercise ü Write your opinion whether the items listed are needs or wants. ü Give a short reason why you feel that way. ü Assign a price to the item. ü Suggest an alternative to the item listed. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Working ü Having a job helps kids prepare for adult life. ü Work habits formed as a teenager follow you for the rest of your life. ü Teaching financial responsibility can be difficult if kids don’t know what it’s like to earn their own money. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Teen Employment ü Teens 16 and older generally can work full time, although some states may limit the times of day they can work. ü Teens aged 14 and 15 can work 18 hours a week but no more than three hours on school days. In the summer, they can work 40 hours a week, eight hours a day. ü Younger teens can do odd jobs such as running errands, babysitting, dog walking or lawn mowing. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Employment Skills ü What skills did you gain from your first job? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Looking For a Job ü What are some ways you can help teens begin a job search? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Getting the Job ü What are some things to tell teens about getting and holding onto a job? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Shrinking Paycheck ü Young people who receive their first paycheck are often surprised that their take -home pay is less than they expected. ü Make sure your kids understand that they can avoid withholding too much by claiming additional allowances on the W-4 form they get from their employer. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Jamal’s First Paycheck ü Classroom Activity ü Take 5 minutes to answer the questions. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Questions (Jamal’s Paycheck) ü What is the pay period at Dynamite Data Computer Superstore? ü Why are Jamal’s current total deductions the same amount as his year-to-date deductions? ü What amount has been withheld from Jamal’s paycheck for his federal income tax withholding? (con’t) Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Questions (Jamal’s Paycheck) ü Does “gross” pay mean before taxes or after taxes? ü What is the total amount taken from Jamal’s paycheck for the Federal Insurance Contribution Act (FICA) which includes Social Security and Medicare deductions? ü Why do you think that no deductions are taken from Jamal’s paycheck for medical insurance and retirement? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Let’s Take a Break Please be back in 15 minutes. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Budgeting ü A budget is a spending plan to help forecast and control expenses. • Teens can be impulsive and a budget can help them step back and look at where their money goes. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Tracking What You Spend ü What are some ways to track spending? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Value of Budgeting ü What can teens gain from keeping a budget? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Resource ü The take-home worksheet in your folders can be used to track weekly expenses. ü Use the information to design a budget. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Comparison Shopping ü Comparison shopping means that you “shop around” in person, by phone or on the Internet, to compare prices in order to find the best deal, before you buy. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Consider Buying Used ü What is a good reason to consider buying second-hand or used items? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banking for Youths ü One of the most important lessons for teens is learning how to handle a bank account properly. ü As an alternative to a bank account, your children may be able to open an account at a local credit union. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

What is a Credit Union? ü A credit union is a non-profit cooperative financial institution owned and controlled by its members. • To find a credit union that you can join, call the Credit Union National Association at 800 -358 -5710, or visit its web site (www. cuna. org). Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banking Advantages ü Your money is safe from loss, theft or fire. ü Each account is insured up to $250, 000 by the FDIC (banks) or the National Credit Union Share Insurance Fund (credit unions). ü Canceled checks are proof that you paid a bill. ü Using check-cashing stores and money orders is more expensive than paying bank fees. ü A bank account can help you keep track of how you spend your money. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Youth Banking ü Checking and savings accounts are great ways to help young people learn to manage money. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Youth Banking ü What should you look for when comparing accounts? ü What are some ways to help your teen find a bank account? • TIP: Bankrate. com (www. bankrate. com) allows you to find and compare checking and savings accounts by ZIP code or city. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Youth Banking ü What are some things to avoid when looking for a checking account for your teen? ü What should you bring with you when you go with your teen to open a bank account? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Writing Checks ü Make sure you have enough money in the bank to cover the check. ü Review your bank statement promptly. ü Record all the checks you write in your checkbook register or use duplicate checks that create a carbon copy of each check. ü Deposit paychecks and other checks in a timely manner—most checks cannot be cashed after three months. ü Use a pen (never a pencil) to write checks. ü Write your checks legibly. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP (con’t)

Writing Checks (con’t) ü Fill in the check amount and payee well to the left to prevent someone from adding numbers to make the check larger or altering the payee’s name. ü If you need to correct a mistake on a check, tear up the check, enter it as “void” in your checkbook register and write a new check. ü Don’t sign blank checks—they can be stolen or used by someone else. ü Know where your checkbook is at all times and report a missing checkbook to your bank immediately. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Check Writing Activity ü This simple activity reinforces good habits when writing a check. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

First Session Wrap-Up ü Next time we will cover: • Balancing a checkbook • Saving • Credit reports • Credit cards • Teen drivers • Cell phones Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

See You Next Time ü Thank you for your attention and participation. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Talking to Teens About Money Session Two Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Last Session’s Topics ü During the first session we covered teen attitudes, outside pressures, needs versus wants, working, paychecks, budgeting, comparison shopping, banking for youths and writing checks. • Do you have any questions about the topics we covered in last week’s session? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Balancing A Checkbook ü One of the most important financial lessons is how to balance a checkbook. ü If you fail to keep an accurate record, you could bounce a check. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Register Exercise ü Take 5 minutes to work on the exercise. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Saving ü Today’s savings interest rates are so low, it’s tough to get kids interested in the power of savings. • Do you have any suggestions on how to get kids to save money? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Saving ü Why is it important to make frequent, regular deposits to a savings account? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Monica and Sarah Classroom Exercise Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Monica and Sarah ü What are some differences between the young women’s spending habits? ü Does anything either of the girls bought seem like an extravagance? ü Can you think of some ways that Monica could start saving more of her earnings? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

The Value of Good Credit ü It is very important in today’s society to have a good credit history. ü Bad credit shows up on your “credit report”—information about your past use of credit compiled by companies called credit reporting bureaus. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Credit and Careers ü Credit reports are increasingly used by employers to screen applicants. ü In certain fields—like financial services, technology and law enforcement—credit checks for job applicants are required. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Young People and Credit ü Everyone who has had a credit card or a loan will have a credit report. ü Since most young people do not acquire their first credit card until they are 18, only a small number of younger teens have credit reports. ü If you allow your teen to be an “authorized user” of your credit card, he or she will have a credit report. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Let’s take a break Please be back in 15 minutes. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Credit Cards ü Many parents allow their children to get a credit card so that they will have access to emergency funds. • If monitored carefully, credit cards can be helpful in teaching your children how to manage money. • Close to two-thirds of college students have at least one credit card. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Credit Cards ü Is it a good idea for college-age children to have a credit card? ü Can you think of any ways to control a student’s use of credit cards? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Credit Cards ü Why do you think credit card companies are so willing to give credit cards to four-year college students? ü What makes a good credit card deal? ü What happens when you make a late payment on your credit card? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Teens Behind the Wheel ü The cost of auto insurance for young drivers—especially boys— can be shockingly high. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Teen Drivers ü Teen driver statistics give insurance underwriters a reason to charge the highest premiums for young drivers. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Saving on Insurance for Teens ü Can you think of things that would help cut down on the cost of auto insurance for teenaged drivers? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Monthly Cost of Car Ownership ü Many teens don’t understand that there are significant costs involved with owning, maintaining and operating a car. • Turn to page 19 in the “Talking to Teens About Money” booklet • Review the chart titled “Monthly Cost of Owning a Car. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Cell Phones ü We all know how much teenagers love the phone! ü What Teens make up an important segment of the cell phone market. ü Many parents pay for cell phone service to keep track of their children and to make sure they can get help in an emergency. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Cell Phones ü How many of your kids have their own cell phones? • What have you found are good ways to limit the cost of cell phone service? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Cell Phone Traps ü ‘Family’ wireless plans charge for minutes when you make and receive calls, which can result in double charges when you are talking to another family member ü On a cell phone, even toll-free numbers cost money ü The charges for directory assistance and connecting calls can be surprisingly high (con’t) Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Cell Phone Traps (con’t) ü Prepaid cell phone plans charge rates of up to 45¢ per minute. ü Custom ring tones, voice mail and other optional services usually result in additional charges. ü Text messaging often carries a permessage charge and some plans levy an extra per-minute charge to download email or browse the web. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Questions & Answers Do you have any questions on our presentation? Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

For More Information ü Consumer Action created the Money. WI$E trainings. • www. consumer-action. org • 415 -777 -9635 • info@consumer-action. org Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Congratulations! ü You’ve completed the Money. WI$E training on Talking to Teens About Money. ü Please fill out the Money. WI$E evaluation form and leave it on your way out. Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Visit money-wise. org for additional information and to access free financial education materials Money. WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP