Promoting sound financial habits for life
The Youth Money Smart College program helps youth make smart financial decisions
"You're never too young to start saving money," says Meghan Wojtowicz, age 17. Meghan is a graduate of Youth Money Smart College, a personal financial management education program for seventh to ninth graders and their parents in Washington County.
Youth and families learn
Youth Money Smart College, a collaborative project of the University of Wisconsin-Extension and University of Wisconsin-Washington County, was developed to address the need for a more comprehensive financial literacy program for families and basic financial instruction for youth.
A SOLID INVESTMENT
- In the program's first four years, 150 youth in grades seven through nine participated in Youth Money Smart College.
- For 78%, it was their first money-management workshop.
- The majority (73-100%) rated the sessions as "good" or "excellent."
- Almost all (95%) said they gained knowledge that made the experience worthwhile.
- Some youth returned for a second or third year because they "missed some of the sessions and wanted to learn more."
Financial literacy is a concern at a time when only 10% of youth are graduating from high school with any instruction in personal finance. Youth Money Smart College has a proven track record with both boys and girls, who learn with their peers and parents how to manage money and make smart financial decisions.
Youth Money Smart College steering committee member and volunteer Mary Rider (right) serves as a clerk for students as they spend part of their wages on clothing at a "reality store." Seventh to ninth graders in the personal financial management education program practice how to budget their money by putting a portion of their money into savings, donating to charity, and "spending" a portion on clothing or electronics. Photo by Marma McIntee
"Such a good learning experience"
Meghan has been involved since the first class in 2003 and participated for three years. She has also served on the steering committee for two years and is now in high school.
"I learned how money builds up, and how easily you can lose money by using credit cards," Meghan says. "I've looked at different savings accounts and compared interest rates. I've budgeted more. I know I have to watch what I'm spending."
Meghan's mother, Stephanie, says, "She's smarter about money. The classes focus on practical stuff that kids need to know. It was such a good learning experience."
Hands-on classes
Youth Money Smart College is now in its fifth year. The classes are experiential and interactive, including a panel, video and games. Each student is assigned a job and receives a paycheck and virtual cash. They learn about pay periods and taxes, and receive "fate" cards, which add (such as birthday money) or subtract (lost dental retainer) from their account. In the end, they must put a portion of their money into savings, donate to charity, and "spend" on clothing or electronics in "reality stores," with donated merchandise they can "buy."
A financial head start
The students learn about managing a checking account, finding a job, applying for a loan, living on their own, identity theft, using credit, financing a college education, and buying electronics or a car. In their own sessions, parents learn how to be financial mentors to their children. The parent sessions are a new feature this year.
Josiah Hensler, now in high school, has attended three classes and is one of four program graduates on the steering committee. The biggest impact for Josiah was learning the importance of planning.
"You can't play it by ear and see where you want to go," Josiah says. "The classes covered stuff I never really thought about before. Now that I have a job, I wish I could take a couple of the classes again. I have a dream of opening my own business, and this gave me a head start in that direction."
FINANCIAL EDUCATION DEFICIT
- In a nationwide test of financial knowledge, 12th graders, on average, could answer only 52.3% of the questions correctly.
- Nearly a quarter of all young adults aged 18-24 are anxious about having enough income and savings.
- Personal bankruptcy filings in Wisconsin have risen by more than 100% since 1990.
- The national savings rate has dropped from 1.6% of household income in 2004 to 0% in 2005.
Sister and dad learn too
Josiah's father, Joe, said that his 14-year-old daughter, Johannah, also participated in Youth Money Smart College. She has a savings account and definite financial goals after just one class.
"My son has no savings yet, but he understands what he needs to do," Joe says. "He has even more lofty goals than I do, as far as financing and owning a business someday." Josiah is taking an entrepreneurship class and wants to pursue a business degree. He has worked in sales, and Joe believes the program helped his son to handle the jobs with a little more ease.
"Overall, the kids thought it was great. They came back excited and said they had learned a lot," Joe says. "The program has heightened my awareness of the little things, like watching credit limits and the need to shop around before borrowing money."
Private- and public-sector collaborators
Marma McIntee, UW-Extension Washington County family living educator, coordinates Youth Money Smart College. Area financial institutions provide financial support as well as publicity, materials and volunteer instructors. Sponsors include local financial institutions, UW-Extension Family Living Programs and the UW-Washington County Continuing Education unit. Program partners include the AAUW (American Association of University Women) and UW-Extension Washington County 4-H and Youth Development.—Jo Futrell
For more information: Family Living Educator Marma McIntee, UW-Extension Washington County, marma.macintee@ces.uwex.edu, (262) 335-4479