Teens learn financial literacy
This is exactly who Alexis Anderson was looking for at her financial literacy for teens class. Anderson, through her faith-based organization PREACH, Providing Resources, Effectively Applying Christ-like Humbleness, offered the class at the Livingston branch of the Livingston Parish Library for Financial Literacy Month.
The two don’t have credit cards, but Anderson said it is not unusual for teens their age to have more than one card, in their own names, by the time they are seniors in high school.
“In one of these classes I taught, one girl had seven credit cards,” Anderson said. “And she didn’t know the interest rate she was being charged on a single one of them.”
Financial literacy, she said, is not much different than conventional literacy. You have to learn to read your money.
“If you know how the system works, then you can figure it out, and make the best decision possible about your money,” she said. And how you pay for things does matter.”
Anderson started by asking the teens to write down their goals in life.
Dedon wants a good job, a house, a car, a family and maybe a dog.
Stovall dreams of having a restored vintage Mustang.
Anderson took the students through a checklist that covered how much each of their goals would set them back, and how much they could expect to earn from their chosen career paths. Both plan to attend college, Dedon to be an X-ray technician, and Stovall a teacher.
Before getting to how much the gas and insurance for the Mustang will cost, Anderson asked Stovall how she will pay for college.
Students don’t have to rely on the old standby of scholarships and student loans, Anderson said. Some possibilities she suggested are jobs that provide tuition reimbursement, working for an educational institute for a discounted tuition rate, using options like community college, night-school classes or Internet classes, or contributing to a 529 savings account.
The 529 account, Anderson said, is a state-sponsored investment program to help families and students save for college costs.
The plan is named after the section of the Internal Revenue Code that created it.
Anderson had some more tips for the teens: plan a budget, track your spending, and live within your means.
They should learn how to read the fine print, she said, and know exactly what they are signing on for when they fill out that credit card application in exchange for a free T-shirt.
“When you consider interest rates, fees and other charges,” she said, “that free T-shirt could end up costing you a lot of money.”
What Anderson wants the teens to be aware of is the value of their money, she said, adding that they will be less likely to buy on impulse, and therefore more likely to make it out of college without the responsibility and headache of ballooning credit card and student loan debt.
On the Internet: For more information on Louisiana’s 529 savings plan: http://www.treasury.state.la.us/start/start_index.htm
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